Budget deal sets up health care fight

WASHINGTON - Angling to award President Obama a victory by his 100th day in office, Democrats in Congress have reached tentative agreement on a budget pact that would prevent Republicans from blocking his ambitious plan to vastly expand government-subsidized health care.

But the blueprint emerging from talks on a compromise House-Senate budget plan would allow Obama's signature $400 tax cut for most workers to expire instead of renewing it, as he wants. And even after squeezing the defense and war budgets, the plan would lead to lasting deficits in the $500 billion range.

Senate Majority Leader Harry Reid (D., Nev.) said yesterday that negotiators had resolved most of their differences on the budget measure, a nonbinding outline critical to helping advance Obama's agenda through Congress. Once passed, the measure would set the rules on how Congress considers Obama's agenda for the rest of the year.

Most important, the measure would allow Obama's plan to overhaul the U.S. health-care system to pass the Senate without the threat of a Republican filibuster. That would limit the Republicans' ability to get concessions and give Democrats far more control over the specifics of the health-care legislation.

Those advantages come at a cost: fury among Republicans who protest that overhauling the U.S. health-care system is far too big and important to advance under fast-track rules that allow for only a 20-hour debate in the Senate.

"It would make it absolutely clear they intend to carry out their plans on a purely partisan basis," said Senate Minority Leader Mitch McConnell (R., Ky.).

A senior Democratic congressional aide revealed the fundamentals of the accord on condition of anonymity because the talks were private.

Congressional votes next week would provide a symbolic victory for Obama's sweeping agenda to enact a universal health-care system, increase spending on education and clean energy, and eventually cut the exploding budget deficit to manageable levels.

Reid said the Senate would approve the budget measure Wednesday, which marks Obama's 100th day in office. House leaders hope to pass the plan Tuesday.

While handing Obama a symbolic victory, lawmakers still have an extraordinary amount of heavy lifting ahead to make Obama's vision of health-care reform a reality - including raising taxes and cutting spending to generate $1 trillion or more over the next decade to fund the health-care initiative.

Under typical Senate rules, 60 votes are needed to advance a bill, but passage of the budget plan would allow for a so-called reconciliation bill that can pass the notoriously balky chamber with just a simple majority and only 20 hours of debate.

Democrats hold 56 seats in the Senate and the two independents who typically vote with them. Republicans have 41 seats, and there is one vacancy because of a contested Minnesota race in which Democrat Al Franken holds a narrow lead.

Democrats, including Obama, say that they genuinely want a bipartisan health-care bill and that the filibuster-proof process would be used only if the GOP obstructs.

Sen. Max Baucus of Montana, one of the leading Democrats trying to write a health-care bill, said yesterday that going the fast-track route would only complicate matters, because Republican support is needed to pass legislation that would be broadly accepted.

"When you jam something down somebody's throat, it's not sustainable," he told reporters. "And I want something that will last."

Meanwhile, Obama's signature "Making Work Pay" tax cut of $400 for most workers and $800 for couples would expire at the end of 2010 as currently scheduled. The temporary tax cut was part of the stimulus plan enacted in February, and Obama is proposing to make it permanent by using revenues from his global-warming initiative to defray the cost.

The budget plan also anticipates the expiration of former President George W. Bush's 2001 and 2003 tax cuts on income and investments at the end of next year. But it ignores Obama's calls for raising taxes to help pay for his health-care plan by reducing the benefits wealthier people take on itemized deductions like charitable gifts and mortgage interest.

The measure also avoids taking a stand on Obama's cap-and-trade plan, proposed by the White House to raise more than $600 billion to pay for tax cuts and clean-energy programs. Under cap-and-trade, the government would auction permits to emit heat-trapping gases, with the costs being passed on to consumers through higher gasoline and electric bills.

The Democratic plan promises to cut the deficit from levels as high as $1.8 trillion this year to about $500 billion by 2014, about 3 percent of the size of the economy. That's the level some economists say is sustainable without producing a crippling debt burden.