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Democrats’ Budget Hemmed in by Bush, Elections

Tastes great, less filling. That might be the tagline for the Democrats’ budget this year.

[IMGCAP(1)]There will be talk of all the domestic programs Democrats want to spend tens of billions of dollars on — health care, education, highways — and the reality that President Bush already has issued veto threats against any bill that spends more than he has requested, and against any bill that raises taxes.

That’s a recipe for near-gridlock, as both sides are lobbing rhetorical grenades at each other with the election looming.

With narrow margins in both chambers, Democrats aren’t about to try anything particularly hard, like dealing with the long-term entitlement mess or providing universal health care.

Instead, Democrats have more modest goals. Most importantly, they want to show that they can pass a budget for the second year in a row after Republicans failed to pass one in three of the previous five years when the GOP ruled. They also want to use the budget blueprint to frame the debate before the elections and put Republicans on the defensive — and tied at the hip with an unpopular president — while the economy sputters.

“We want to talk about responsible fiscal spending that is going to provide health care, education and job training for people who have lost their jobs,” said Nadeam Elshami, spokesman for Speaker Nancy Pelosi (D-Calif.).

“Our budget is going to balance by 2012, it is going to adhere to PAYGO and restore fiscal responsibility,” he said.

But from a practical standpoint, the budget resolution will mean relatively little. Democrats are expected to add $25 billion to $35 billion to Bush’s budget requests for domestic programs, rejecting proposed cuts across a range of programs. Bush’s veto threat renders the discretionary spending cap of little value except as a political blueprint.

Democrats have warned that they will hold domestic bills until after the elections in hope that a Democrat is elected, which means that only Defense and war-related bills are likely to reach the president.

Democrats also plan to include instructions that would allow spending and tax bills to avoid a Senate filibuster, but those bills will likely face veto threats as well. Those instructions under budget rules must at least marginally cut the deficit, and they are expected to provide room for some tax-cut extensions as well as avoid a scheduled 10 percent cut in doctor’s payments under Medicare.

But Democrats believe it behooves them to bypass a filibuster and get a bill to the president to highlight the showdown over policy priorities.

Senate Democrats defended their attempt to pass a budget, which will kick off on Wednesday in both House and Senate Budget committees, even as they acknowledged the exercise will likely be more political than substantive.

“It is less worthwhile than we will make it out to be,” acknowledged a senior Senate Democratic aide.

But the aide cautioned that budget will set the stage for the Democrats’ next efforts to stimulate the economy through extended funding for unemployment benefits and additional money for low-income home heating assistance and food stamps.

“It’s critical to have a budget. It sets our priorities for the year,” echoed another Senate Democratic aide. “You’ve got to prepare the fight to have the fight.”

Still, there will be some fights that even Democrats don’t want to have, and discussion at the leadership level already has begun on whether to allow Democrats to vote for some of the anticipated tax-cut proposals that Republicans plan to offer on the Senate floor.

“We may not be holding our Members en bloc on some of these things,” the senior Senate Democratic aide said.

A little freedom to vote for feel-good tax cuts might be just the thing some fence-sitting Democrats need to persuade them to stick with the party on more difficult votes to make the entirety of the Bush tax cuts permanent and other GOP priorities.

Some rank-and-file Senate Democrats already are questioning expected votes later in the year on an expected budget reconciliation bill that would cut Medicare Advantage subsidies to ensure Medicare doctors do not see a 10 percent pay cut in the coming year.

Democrats, meanwhile, will have to tiptoe around splits in their caucus on the Iraq War and on pay-as-you-go rules. As in last year’s resolution, Democrats are expected to provide funding for the president’s requests for war funding without actually using the word “Iraq,” in a nod to Democrats who have vowed to oppose more money for the war.

Less clear is how much fidelity Democrats will show to PAYGO. They talked about fiscal restraint last year, only to toss PAYGO overboard when alternative minimum tax relief was on the floor. This year, they have exempted the massive stimulus package from PAYGO as well. Key Democrats are telegraphing another AMT patch without offsets this year, and Senate Democrats are looking to pass another stimulus package without offsets as well.

A senior House Republican aide said they will be attacking the Democratic budget as bloated while setting the stage for a massive tax increase — much as they did last year.

“Making the budget into a Christmas tree for their out-of- touch spending and policy priorities plays to our advantage,” the aide said.

“Any discussion about bloated spending paid for through increased taxes on hardworking Americans is a fight we want to have and is a fight we are going to have.”

A House Democratic leadership aide said, however, that the Democratic budget would ensure that middle-class tax cuts are provided.

“If they think that the American people would actually believe that Democrats do not support middle-class tax cuts, then I have a bridge I want to sell them in Alaska,” the aide said.

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