Congress passes Obama’s budget blueprint

WASHINGTON -- The House and Senate last week passed far-reaching budget bills, the first step toward tackling President Barack Obama's policy goals on energy, taxes, health care and education.

The bills were drafts of a fiscal 2010 budget resolution that negotiators from both sides of Congress will shape into a final budget later this spring.

Besides setting overall spending levels for government, the document signals the general outlines of what policies lawmakers may find acceptable as they craft follow-up legislation in response to Obama's call for major changes in the economy.

Both the House and Senate bills envision spending in the vicinity of $3.5 trillion in the upcoming year. The process of finalizing the budget is expected to be driven by Democrats, as no Republicans voted for the measures that were approved late Thursday.

The House voted 233-196 for the budget. Reps. Shelley Berkley and Dina Titus, both D-Nev., voted for it. Rep. Dean Heller, R-Nev., voted against it.

The Senate vote was 55-43. Sen. Harry Reid, D-Nev., voted for it. Sen. John Ensign, R-Nev., voted against it.

During debate, Republicans repeated a mantra that the budget "spends too much, taxes too much and borrows too much." They argued it would generate a deficit of more than $1.2 trillion next year, and double the national debt within five years, hurting the economy in the long run.

Democrats argued the spending was necessary to dig the economy from the hole they say was created by the Bush administration.

In the House, an alternative backed by Republican leaders was defeated, 293-137. It would have cut deeply into Obama's proposed spending for domestic programs, and called for more tax cuts.

It also contained a controversial change to Medicare requiring people under 55 to buy government-subsidized health insurance from private health plans when they retired. Supporters said the change was necessary to prevent Medicare from going insolvent.

Berkley, Heller and Titus voted against the Republican alternative.

In the Senate, dozens of amendments were considered. Most that would veer sharply from Obama's priorities were defeated.

• Sen. Jeff Sessions, R-Ala., proposed an amendment that would have frozen non- defense spending for two years, and allowed only 1 percent growth for the subsequent three years.

Sen. Kent Conrad, D-N.D., called for it to be defeated, saying "freezing domestic spending is a mistake at a time of sharp economic downturn."

The Sessions amendment was killed, 40-58. Ensign voted for it while Reid voted against it.

• Sen. John Ensign, R-Nev., proposed that wealthier senior citizens pay more for prescription drugs obtained through Medicare, and that the resulting taxpayer savings be applied to reduce the deficit.

The means-testing amendment would have increased premiums for seniors with modified adjusted income of more than $85,000, and for couples with such income of about $170,000.

Democrats noted that Obama also has proposed means-testing for Medicare prescription drugs, but he wants the savings to be reinvested in health care reform.

The Ensign amendment was killed, 58-39. While Ensign voted for his amendment, Reid voted against it.

• An amendment by Sens. Blanche Lincoln, D-Ark., and Jon Kyl, R-Ariz., that was at odds with Obama on estate taxes was approved, 51-48.

The amendment called for higher exemptions and lower rates on the so-called "death tax" than Obama has proposed.

Lincoln said her proposal would help family-owned businesses and farms that are hit the hardest by the estate tax. Because of tax bills Congress passed earlier in the decade, the estate tax will be temporarily phased out next year but will return with higher rates in 2011.

Obama is counting on hundreds of billions of dollars in revenue from higher estate taxes to fund other priorities.

Ensign voted for the Lincoln amendment. Reid voted against it.

TOBACCO REGULATIONS PASSED

The House voted 298-112 to give the Food and Drug Administration new powers to regulate the manufacture and sale of tobacco products. Among its sweeping provisions, the bill would require more prominent health warnings on cigarette packs, and forbid billboard ads for tobacco.

Supporters, including the Obama White House said the bill would be a big benefit to public health. Critics, mostly from tobacco-producing states, argued the new powers would divert FDA attention away from ensuring the safety of food supplies.

Berkley and Titus voted for the bill. Heller voted against it.

COMPENSATION LIMIT BILL PASSES

The House took another stab at the bonuses that were collected by executives at AIG and other companies that have received federal bailout funds.

The bill would bar companies getting money from the Troubled Assets Relief Program from paying "unreasonable or excessive" compensation, and directs federal bank regulators to define that term. Bonuses could be paid only after the companies had paid back the federal funding.

The measure was seen as a fallback. Both President Obama and the Senate had indicated little appetite for a stronger bill the House passed last month would have imposed a 90 percent tax on executives at the troubled AIG insurance firm that were given a collective $165 million in bonuses earlier this year.

Critics said the bill gave the Treasury Department new powers with little oversight, including allowing it to alter retirement and health care benefits for employees of as well as executives of companies receiving relief funds.

The bill passed, 247-171. Berkley and Titus voted for the bill. Heller voted against it.

Contact Stephens Media Bureau Chief Steve Tetreault at stetreault@stephens media.com or 202-783-1760.