Congress passes Obama budget with party-line vote
Carolyn Lochhead, Chronicle Washington Bureau

Thursday, April 2, 2009

(04-02) 20:53 PDT Washington -- The broad outlines of President Obama's budget moved through Congress on Thursday, even as Republicans warned that Democrats are "leading the country off a leftward cliff" and Bay Area liberals insisted that Obama is not going far enough.

But for House Speaker Nancy Pelosi, the $3.5 trillion budget is the beginning of a new Democratic era.

"Decisions are liberating," the San Francisco Democrat said. "By deciding to support this budget, members are freeing themselves from past mistakes and stale assumptions. They're unleashing the possibilities of the future."

The budget marks a decisive shift from the Bush era, dramatically raising social spending and federal investments in green energy and education. It lays the groundwork for a major overhaul of the U.S. health-care system and for climate-change legislation.

The budget passed the House on a party-line vote of 223-196. The Senate vote was 55-43. Although Democrats trimmed Obama's initial plans and ignored his ideas for offsetting the costs of new programs, the thrust remained largely intact. The Obama budget would borrow an estimated $9.3 trillion over the next decade, according to the Congressional Budget Office, doubling the public debt as a share of the nation's output from 41 percent to 82 percent. The budget calls for nearly $4 trillion in deficits over the next five years.

The House Progressive Caucus, led by Marin Democrat Lynn Woolsey, put forward a failed alternative that would have slashed spending on weapons systems and speeded troop withdrawals from Iraq.

That, with a cancellation of Bush-era tax cuts for high-income earners, would have allowed $991 billion more for social programs, including a new $300 billion stimulus, Woolsey said.

The Woolsey budget did not include military funding for Afghanistan, over which a showdown is brewing between liberals and the White House. Obama has ordered a 21,000-troop increase there, bringing the total to nearly 60,000, and is considering sending another 10,000 this fall.

Afghanistan debate
Woolsey said there is resistance in Congress to Obama's strategy in Afghanistan that could come to a head when the administration asks Congress for more money to prosecute the war soon after the April recess.

"That's when there will be the first major stand" against the war, Woolsey said. "You have to understand, it's very difficult. We have an entirely different president in the White House, a guy with a brain and a heart, and he's a lot easier to want to support." However, she said she cannot support a military solution in Afghanistan, calling for humanitarian aid instead.

Debt levels upset GOP
Republicans, for their part, were almost apoplectic over the debt levels that Obama envisions, accusing Democrats of spending so reckless as to invite lectures from Europeans on fiscal responsibility and from the Chinese on borrowing.

The GOP alternative, however, rested largely on continuing Bush administration policies that still would have left deficits in the $500 billion range each year. Republicans called for making the Bush tax cuts permanent, slashing corporate and capital gains taxes and hacking two-thirds of the spending from the stimulus measure approved earlier this year. The GOP budget still would have raised borrowing sharply, to 62 percent of the national output over 10 years.

Republicans believe they are gaining traction against Democrats by highlighting the enormous borrowing that the Obama budget would entail.

'Unwelcome inheritance'
But House Budget Committee chair John Spratt, a conservative South Carolina Democrat, said his party started with a breathtaking $1.8 trillion deficit inherited from the Bush administration.

"We haven't seen anything like this in American history," Spratt said. "It is our unwelcome inheritance."

Spratt said the budget will take the deficit down to 3.5 percent of gross domestic product by in four years and, despite what Republicans said, raises non-defense spending just 4 percent.

He vowed that big projects such as health care will remain "deficit neutral" through a mechanism that will require that any new initiatives be offset by spending cuts or tax increases.

"That's extremely important," Spratt said.

Rep. Paul Ryan, the ranking Republican on the House Budget Committee, warned conservative Democrats that they would be held responsible for going along. "I know you're thinking about this vote," Ryan said. "Do you want your fingerprints on this mountain of borrowing? Do you want to go home to your constituents whom you told you were going to be conservatives and say you signed up for this stuff?"

Pelosi expressed little interest in finding compromises with Republicans.

"The American people want us to find our common ground where we can, but they did not send us here to split the difference," she said. "They want real change, and we have come here to make a difference."

The two versions will be reconciled and passed again in both chambers when Congress returns from its April recess.

Tough fights to come
In a sign of tough fights to come for Democrats, the Senate dealt a setback to a signature effort shared by Obama and California Democratic Sen. Barbara Boxer to reduce greenhouse-gas emissions. On Wednesday, the Senate essentially removed filibuster protection from Boxer's plan to enact a "cap-and-trade" mechanism to auction permits to pollute. That means the highly controversial plan would need 60 votes to pass, a tall order given opposition from Midwestern and Southern Democrats whose states rely on coal-fired power plants.

E-mail Carolyn Lochhead at clochhead@sfchronicle.com



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