Senate approves stand-pat Democratic budget plan

WASHINGTON — The Senate Wednesday 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 a narrow 48-45 margin, would allow large near-term increases in defense and domestic programs funded by Congress each year, but also stacks wrenching Medicare and other federal benefit decisions upon the shoulders of 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, or 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.

But 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 anti-war Democrat takes back the White House — and assumes that Congress will raise taxes to finance the $50 billion-plus cost of "patching" the AMT.

The same assumptions call into question Democrats' promises to produce small surpluses by 2012.

Congress' annual budget debate involves a nonbinding resolution that 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, however, the budget debate has little real effect and is mostly about making statements about party priorities.

In fact, Congress has a limited agenda this year on the budget: addressing the AMT, extending some expiring tax breaks for business, and preventing doctors from absorbing cuts in their Medicare payments. They also plan a major boost in the GI Bill for veterans college benefits at a cost of more than $50 billion over the upcoming decade.

Meanwhile, Democrats are slow-walking the 12 annual spending bills to avoid an election-season fight with Bush; they are unlikely to get passed into law until next year.