Rival budget plans pose tough trade-offs

WASHINGTON — Democrats in the House and Senate trumpeted surplus-producing fiscal plans Wednesday as their GOP rivals seized on looming tax increases in the Democratic budget outlines as a potent issue for the presidential campaign.

Democrats are backing twin $3 trillion budgets for 2009 that would produce sizable surpluses in a few years and provide generous increases for many domestic programs, but only by assuming major tax increases when President Bush's tax cuts expire in about three years.

All three major presidential candidates planned to be on hand today in the Senate for votes on taxes, a one-year ban on lawmakers' pet projects and a vote to pass the measure late in the day. The House also votes today.

House debate began Wednesday, as Republicans pressed an alternative plan to preserve Bush's income tax rate cuts and tax breaks for married couples, people with children, on investments and for those inheriting multimillion-dollar estates.

But the price for such generosity is harsh: unrealistic cuts in Medicare, housing, community development, and the Medicaid health-care program for the poor and disabled.

The rival budget plans display the difficult trade-offs facing the next president, who must weigh tax cuts that expire at the end of 2010 against popular spending programs like education, highway construction and Medicare.

Simply put, it's impossible, under current estimates, to have it all and still being able to produce a balanced budget in a few years. The White House forecasts the deficit for the current year at $410 billion, a near-record.

Republicans blasted the measures for assuming the 2001 and 2003 cuts in taxes on income, investments, parents with children and married couples will expire at the end of 2010.

"The child tax credit gets cut in half," said Rep. Paul Ryan of Wisconsin, the top Republican on the House Budget Committee. "The marriage penalty comes back. ... It requires that income tax rates are raised across the board."

Democrats countered that their nonbinding plan puts the budget back in surplus while also making investments in infrastructure, education, community development, clean energy and other programs. They say it also avoids $196 billion worth of Bush-proposed cuts to Medicare and the Medicaid health-care program for the poor and disabled.