House committee OKs $2.4 trillion budget

Also, budget panel approves imposition of limits on spending

March 18, 2004|By Mary Curtius | Mary Curtius,LOS ANGELES TIMES

WASHINGTON - The House Budget Committee approved yesterday a $2.4 trillion budget for the 2005 fiscal year and separate legislation that would impose caps on spending, in each case voting along party lines - 24 Republicans in favor and 19 Democrats opposed.

The budget bill is scheduled for consideration by the full House on Wednesday.

The panel's actions set the stage for what will probably be contentious negotiations between the House and the Senate, both controlled by Republicans, to reconcile differences in their 2005 budget bills. Some conservative and moderate Republicans in both chambers have recently expressed growing unease with record deficits, which are expected to hit an estimated $477 billion this year.

President Bush has asked Congress to make permanent the tax cuts passed in 2001 and 2003 and estimated to cost $1.3 trillion over the next decade. But both the House and the Senate want only a few of the tax cuts extended - the ones easing the so-called "marriage penalty," expanding the 10 percent income-tax bracket and raising the child tax credit to $1,000 per child.

The Democrats on the committee argued that if spending is limited, restrictions should also be placed on new tax cuts. Last week in the Senate, four Republicans crossed party lines to pass a "pay-as-you-go" amendment to the budget requiring 60 votes to enact new tax cuts. But there was no such show of bipartisanship on the House Budget Committee, which refused to follow the Senate's lead and make it tougher to enact new tax cuts.

Democratic members praised the Senate's action while denouncing Republicans for making what Rep. Ron Kind, a Wisconsin Democrat, said was "a veiled cynical attempt ... to pretend you're being fiscally responsible without making the hard choices."

GOP Rep. Jim Nussle of Iowa, the committee chairman, rejected suggestions that any new tax cuts should have corresponding spending cuts and that the earlier tax cuts - the centerpiece of Bush's domestic agenda - worsened budget deficits. "The real challenge to the deficit, long-term, is controlling spending," Nussle said. "We don't believe that you should have to `pay for' tax cuts."

Last week, Nussle agreed to introduce some sort of spending cap after a group of Republican conservatives and moderates on the committee insisted that the budget be accompanied by enforcement measures. The agreement on spending caps was reached after days of negotiations among committee members and with the House Republican leadership.

The budget approved by the House panel would hold discretionary spending to $819 billion next year. Included in that amount is $421 billion Bush sought for defense spending and $34 billion for homeland security. The budget holds other discretionary spending to 2004 levels. It also extends the 2001 and 2003 tax cuts, at a cost of $137 billion - $50 billion more than the Senate budget. And it projects that this year's expected $477 billion budget deficit will be cut in half by 2008, based largely on projected economic growth that will raise federal revenues. The other legislation voted on yesterday would impose restrictions on spending for entitlement increases through 2009 and set annual spending caps that would grow steadily through 2009 on the one-third of the budget that Congress must approve each year for spending by federal agencies.

Independent budget watchdog groups said the enforcement measures pursued in the Senate and the House were signs that Congress is beginning to change course after years of passing tax cuts without corresponding spending cuts.

"It is good that they've recognized the problem and that deficit reduction is an explicit policy goal; that's an important thing," said Robert L. Bixby, executive director of the nonpartisan Concord Coalition in Arlington, Va.

The Los Angeles Times is a Tribune Publishing newspaper.

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