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Senate approves budget blueprint

The plan leaves details to future lawmakers. Its estimates on the war and taxes are questionable.

WASHINGTON - The Senate yesterday approved a $3.1 trillion election-year Democratic budget blueprint that leaves to the next president the task of sorting out a host of fiscal problems.

The House-Senate compromise, adopted by 48-45, would allow large near-term increases in defense and domestic programs funded by Congress each year, but also leaves wrenching Medicare and other federal benefit decisions to future policymakers.

It also manages to predict small budget surpluses by 2012, but only by permitting several of President Bush's tax cuts to expire, as scheduled, at the end of 2010 and by allowing more than 20 million middle-class taxpayers to be hit by the alternative minimum tax (AMT) after next year.

The immediate impact of the nonbinding measure is to provide a $24 billion increase for domestic-agency budgets for the budget year beginning Oct. 1, an almost 5 percent increase. It also endorses Bush's $36 billion increase for the Pentagon's core budget, more than 7 percent.

It relies on a host of questionable assumptions to predict a $340 billion budget deficit for next year, achieving it only by understating likely war costs - even if an antiwar Democrat takes the White House - and assumes that Congress will raise taxes to finance the $50 billion-plus cost of "patching" the AMT.

All area senators voted in favor of the resolution except Arlen Specter (R., Pa.), who voted no, and Joseph R. Biden Jr. (D., Del.), who did not vote.

Congress' annual budget debate involves the nonbinding measure, which sets the stage for later bills affecting taxes, benefit programs such as Medicare, and the annual appropriations bills.

Unless such follow-up legislation is passed, the budget debate has the effect only of stating party priorities.

Congress has a limited agenda this year on the budget: addressing the AMT, extending some expiring tax breaks for business, and saving doctors from absorbing cuts in Medicare payments.

Congress also plans a major boost in the GI Bill for veterans' college benefits at a cost of more than $50 billion over the coming decade.

Democrats are slow-walking the actual 12 annual spending bills to avoid an election-season fight with Bush; the bills are unlikely to be enacted until next year.

The measure the Senate considered yesterday paints a bleak picture for the next president, who will face tough decisions, such as on cutting benefit programs to prepare for the retirement of the baby-boom generation and on whether to extend the full menu of Bush's tax cuts.

The Democratic plan relies on an assumed surge in tax revenues - averaging $129 billion a year - after 2010, to claim the budget to be in balance in four years.

Republicans slammed the measure for proposing higher taxes.

"With rising gas prices and economic concerns, Congress needs to lower taxes on working Americans and job creators and rein in wasteful Washington spending," said Sen. Mitch McConnell (R., Ky.), the minority leader.

Democrats said the plan promised to renew tax cuts aimed at the middle class, including the $1,000-per-child credit, relief from the marriage penalty, estate-tax cuts, and the 10 percent tax rate on the first $7,825 of income for individuals.

"The record under this administration has been a record of debt and deficits as far as the eye can see," said Senate Budget Committee Chairman Kent Conrad (D., N.D.). "This budget seeks to take the country in a different direction."