Friday, May 19, 2006

In Congress, a Budget Divide; Differences in House, Senate Versions May Make Deal Difficult
In Congress, a Budget Divide
Differences in House, Senate Versions May Make Deal Difficult
By Shailagh Murray
Washington Post Staff Writer

After two setbacks, the House finally approved a fiscal 2007 budget early yesterday morning, but differences with the Senate version may be too considerable for Congress to reach a final agreement.

The blueprint provides for $2.8 trillion in spending on entitlement programs and general operation of the government during the fiscal year that will begin Oct. 1. The House snubbed two of President Bush's top budget priorities: a major expansion of tax-free health savings accounts and curbs in the growth of Medicare spending for the elderly. But in a final-hour bid for votes, GOP leaders agreed to provide extra spending for popular health, education and other social programs to win over moderate Republicans.

The 218 to 210 vote was a victory for House Majority Leader John A. Boehner (R-Ohio), who assumed his post in February after Rep. Tom DeLay (R-Tex.) resigned from the leadership job under an ethics cloud. After two embarrassing failures, Boehner and his allies bartered and cajoled throughout Wednesday to bridge a narrow but persistent vote gap. The House has passed a budget every year since the Congressional Budget Act took effect in 1975, but the Senate and House have not always agreed on a final version.

"We successfully worked with conservatives, moderates, and appropriators alike to come together as a team and pass a responsible budget that controls spending," Boehner said in a statement after the vote.

A final agreement with the Senate appears out of reach, however, because of significant differences in funding priorities. The House budget would allow more than $7 billion in extra domestic funding, but the money would have to be shifted from other accounts, in keeping with Bush's bottom-line limits on discretionary spending on general government operations. The Senate exceeded Bush's caps by at least $16 billion.

"Clearly, at this point in the year it's going to be tough to get a conference agreement," said House Budget Committee Chairman Jim Nussle (R-Iowa). But he said that he and Senate Budget Committee Chairman Judd Gregg (R-N.H.) will begin discussions immediately.

Democrats said the House budget fails to provide adequate funding for veterans' care, education, public health and environmental protection. "This shamefully shortsighted budget resolution cuts crucial investments in our nation and our people," said Democratic Whip Steny H. Hoyer (Md.).

Democrats pounced on a late-night statement by House Speaker J. Dennis Hastert (R-Ill.), who declared: "Well, folks, if you earn $40,000 a year and have a family of two, you don't pay any taxes. So you probably, if you don't pay any taxes, you are not going to get a big tax cut."

Many such families indeed pay no federal income taxes, but Democrats said they pay plenty of Social Security and Medicare taxes.

"On the House floor early this morning, Speaker Hastert demonstrated how out of touch Republicans are with everyday Americans when he made the preposterous claim that working families pay no taxes," House Minority Leader Nancy Pelosi (D-Calif.) said.

Throughout the spring, GOP leaders had struggled to reconcile two warring factions in the House Republican Conference. Conservatives believe federal spending has spiraled out of control, and want to impose strict fiscal discipline. But moderates and other Republicans facing tough election campaigns this fall believe that too much belt-tightening could prove politically disastrous in November.

In March, 17 Republicans -- many of them viewed as top midterm targets by Democrats -- signed a letter seeking a 2 percent increase in non-security, non-emergency discretionary appropriations over fiscal 2006 levels. Several in the group offered a substitute budget that would have increased Bush's budget request for education and health accounts by $7.16 billion -- equal to the funding enacted in the fiscal 2006 appropriations bill for the Labor, Health and Human Services, and Education departments, plus a 2 percent inflationary increase.

After negotiations between Boehner and the group, led by Rep. Michael N. Castle (R-Del.), GOP leaders amended the budget rule with language that "recognizes the need" to increase funding for the appropriations bill to the level that Castle and his group had sought.

Staff writer Jonathan Weisman contributed to this report.