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Congress Adopts Fiscal 2010 Budget Resolution

By David Clarke, CQ Staff

April 29, 2009 -- As President Obama marked his first 100 days in office, Congress adopted a fiscal 2010 budget resolution Wednesday that sets the stage for action on his top legislative priorities.

The House adopted the conference report on the resolution by 233–193. No Republican voted for the budget; 17 Democrats — nearly all of them conservative — voted against it.

The Senate vote about six hours later was 53–43. Again, no Republicans voted for the budget, while Democrats Evan Bayh of Indiana, Ben Nelson of Nebraska, and Robert C. Byrd of West Virginia voted against it, as did Arlen Specter of Pennsylvania, who switched his party allegiance Tuesday from Republican to Democratic.

The budget resolution is non-binding, but it sets the framework for Congress to make legislative decisions on taxes, appropriations, and entitlement programs later in the year.

The $3.56 trillion budget resolution includes reconciliation instructions that would allow Obama's proposed health care overhaul to move through Congress immune from a Senate filibuster.

Similar protection is included for legislation sought by the president that would sharply curtail the role of private lenders in the federal student aid program.

Republicans object to using the fast-track reconciliation process on a policy as sweeping as health care. Democrats say they will only use it if bipartisan negotiations break down.

The committees with jurisdiction over health care policy have until Oct. 15 to produce their reconciliation bills if they choose to use the process. But the Senate committees are aiming to produce a stand-alone health care overall in June, and leaders in both chambers hope to complete floor action by the start of the August recess.

Senate Budget Chairman Kent Conrad, D-N.D., said he had opposed inclusion of the reconciliation instructions "at every step of the way, publicly and privately," only to be overruled by top party leaders. He said he still believes it will not be used for a health care overhaul.

Sharp Partisan Divisions

Democrats heralded their budget as making key investments in health care, education, and renewable energy programs while also putting the soaring deficit on a downward trajectory.

"Today for the first time in many, many years we have a president's budget on the floor that is reflective of our national values," declared House Speaker Nancy Pelosi, D-Calif. "It is a foundation for how we go forward into the future."

She said the budget's proposals on "the three pillars of the Obama agenda"—education, health care, and energy—"are what the business community and others tell us are investments we must make in order to turn our economy around," she said.

Conrad praised Obama's performance as president after 100 days, saying he was working to "lead the country in a new, better direction."

He said budget negotiators "were able to preserve his key priorities, and I'm proud of that."

But Republicans denounced the Democrats fiscal framework as a blueprint for a huge expansion of the role of government that pushes the nation's debt to dangerous levels.

The budget resolution is "nothing short of an audacious move to a big socialist government in Washington, D.C.," said House Minority Leader John A. Boehner, R-Ohio.

Under the Democrats' budget plan, the debt held by the public would rise from $7.7 trillion in fiscal 2009 to $11.5 trillion in fiscal 2014. When measured as a percentage of the economy, the method preferred by economists, the debt would rise from 55 percent of gross domestic product to 66.7 percent of GDP.

Republicans pointed to this rise as evidence the budget was not imposing fiscal discipline.

"If this budget passes, you're going to have a hard time looking the next generation of Americans in the eye and say you're going to have a chance to do better than people who are alive here today, because what it does is it doubles the national debt," said Sen. Lindsey Graham, R-S.C.

Sen. John McCain, R-Ariz., whom Obama defeated last November, denounced the budget, warning it was "laying a path to a crisis in America that could be as severe as this one." The soaring deficits, McCain said, would lead to "hyper-inflation."

Democrats scoffed at this type of criticism, noting the debt grew sharply under the Republicans' watch during the Bush administration. Neither party has made a major effort at debt and deficit reduction in recent years.

The debt and deficit have been climbing steeply over the past year due to the economic downturn and the government's attempt to deal with its impact.

The budget assumes the deficit will drop to $523 billion in fiscal 2014 from $1.2 trillion in fiscal 2010, but deficit projections often prove to be more optimistic than reality.

The resolution gives the Appropriations committees a cap of $1.086 trillion in discretionary spending for the 12 annual appropriations bills, which is $10 billion less than the administration requested when cap adjustments are included. The budget assumes appropriators will match the president's request of $556.1 billion for defense programs while spending $10 billion less than requested on domestic programs.

Blue Dogs on Board

Although the 51 conservative House Democrats in the Blue Dog Coalition were concerned about the huge deficits envisioned in the budget, they were largely won over by a pledge by House leaders to support stricter deficit control measures going forward.

In a letter to Blue Dogs on Tuesday, Pelosi and House Majority Leader Steny H. Hoyer, D-Md., promised strict pay-as-you-go treatment for four bills expected to come up later this year. PAYGO, as it is sometimes called, requires all new tax cuts or new entitlement program spending to be offset by equivalent tax increases or spending cuts elsewhere.

The four bills would prevent the alternative minimum tax from hitting more households, increase Medicare payments to doctors, adjust the estate tax, and extend expiring middle-class tax cuts.

"The House will attach statutory PAYGO to each of the four bills mentioned above or follow the House PAYGO rule," the letter said. "The House will not consider any conference reports on these four bills or any of them directly from the Senate unless these conference reports or bills include statutory PAYGO, the bills are fully offset under traditional scorekeeping, or statutory PAYGO has already been enacted into law."

The Blue Dogs have often lost battles with the Senate over PAYGO issues. But they are betting that Obama's support for putting pay-as-you-go into law will be enough to overcome Senate opposition.

"This is something he believes in," said Hoyer, an ally of the Blue Dogs. "It is not a political stratagem for the president." 

— Drew Armstrong contributed to this story.

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