Democrats put their stamp on US budget

The Senate's version of a fiscal year 2008 budget resolution passed on March 23 by a vote of 52 to 47. Two Maine Republicans, Sens. Olympia Snowe and Susan Collins, voted with Democrats to back the plan.

Once the House and Senate versions are reconciled, the budget resolution guides spending bills for fiscal year 2008. Programs included in this plan are also protected from a Senate filibuster, and therefore can pass the Congress by a simple majority, instead of the 60 votes often needed to send bills to the president's desk.

House Democrats say they have waited since the Clinton administration for "a seat at the table" in budget negotiations. "When we last, as Democrats, had a hand in really making the budget – and that was a year before President Bush came to office – we had surplus of $236 billion," said Representative Spratt.

"Our first objective was to put the budget back in balance," he said. The House Democrats' plan projects a $153 billion surplus in 2012. Senate Democrats say they will use that surplus in 2012 to help pay for extending some of the Bush tax cuts – a promise that is not binding on future Congresses.

Both Mr. Spratt and Sen. Kent Conrad (D) of North Dakota have long railed against deficit spending in the Bush years, and the failure of Congress to prepare for the retirement of the baby boomers. They say the Bush administration has dug the nation a big hole in deficit spending, and it will take five years to get the budget back into balance.

Budget watchdogs applaud Democrats

Budget watchdog groups applaud Democratic leaders for insisting on pay-as-you-go rules, but say they are putting off the tough budget decisions.

"The first tough decision they will have to make later this summer is with the AMT [Alternative Minimum Tax]," says Chris Edwards, director of tax policy for the CATO Institute.

House Democrats say they plan to find an offset for one year of AMT tax relief; Senate Democrats propose two years of relief. But neither has yet identified an offset to pay for it. "One-year relief is a $50 billion proposition, and I can't see Congress finding $50 billion in cuts," he adds.

Still, if Democrats can agree on a budget resolution this year, as expected, it will be an improvement over two of the past four years, when the GOP-controlled Congress failed to pass a budget.

"On the surface, these are very moderate budgets," says Richard Kogan, a budget analyst for the Center on Budget and Policy Priorities in Washington. In fact, if the trends in the Democratic budget plans continue, domestic discretionary spending would fall to its lowest level as a share of GDP in the past 50 years, he adds.

Since 1962, discretionary spending – all that isn't entitlement spending and interest on what is now nearly $9 trillion in national debt – has fallen from 68 percent to 38 percent of the federal budget.

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