Congressional Democrats moved on Wednesday to slim down President Barack Obama's 2010 budget request amid bipartisan worries that the his plan could make the U.S. deficit balloon with new federal spending.
Launching a battle in which Obama has already said he will not get all he wants, House of Representatives Budget Committee Democrats outlined a $3.45 trillion budget for fiscal 2010 that begins on October 1 -- slightly below Obama's proposed $3.55 trillion plan.
I'm confident that with the leadership of the speaker and (Senate Majority Leader) Harry Reid we are going to get our budget with all the major elements intact, Vice President Joe Biden, flanked by House Speaker Nancy Pelosi, told reporters.
Obama will personally lobby Senate Democrats on Wednesday for his budget, which he said on Tuesday was inseparable from his broader effort to pull the U.S. economy out of recession.
Obama must walk a fine line promoting his priorities while not upsetting fellow Democrats who could scuttle them.
The House plan does not extend his signature middle-class tax cut of $800 for couples and $400 for individuals beyond 2010. The House plan also does not include the $125 billion marker Obama requested for financial bailouts in 2010, amid outrage about big bonuses firms have paid out.
But House Democrats did include broad instructions backing Obama's bid to reform the $2.5 trillion healthcare system to cover some 46 million uninsured Americans.
Including it in the budget would give it privileged status, making it easier to become law. It also creates several reserve funds, including those for healthcare and moving toward greater energy independence, but requires that they do not increase the deficit.
The Senate Budget Committee was also to start discussing its version of the budget on Wednesday. The plan also does not extend the middle class tax cut from the stimulus package approved last month, according to the committee's summary.
Republicans have criticized Obama's budget for too much spending and large tax increases on the wealthy. They pointed to the Congressional Budget Office's analysis that showed the president's budget would balloon the deficit by $9.3 trillion over the next decade.
America is at a critical juncture in our history -- brought about by a financial crisis and a deep recession that are hurting the American people, said Representative Paul Ryan, the House Budget Committee's top Republican.
Instead of simply righting the ship, this budget steers it in a radically different direction -- straight into the tidal wave of spending and debt that is already building, he said.
Republicans were expected to offer numerous amendments to change the plan, but as they are outnumbered on the committee chance of passage was slim unless Democrats agree.
The White House has disputed the CBO figures, arguing that CBO used a conservative estimate for economic growth in the long term, but more optimistic growth estimates would fuel tax receipts and improve the government's balance sheet.
White House budget director Peter Orszag said the budget plans in the House and Senate were largely the same as Obama's. Yes, there are some differences, but I think the big story is how similar these two things are rather than the small adjustments that were inevitable, he said.
House Budget Committee Democrats said their proposal would cut the deficit to $586 billion in 2013, an attempt to reach Obama's pledge to cut the budget deficit in half by then. However it would grow again to almost $600 billion in 2014.
It also slims tax cut proposals from Obama's budget to about $613 billion from almost $804 billion from 2009 to 2014. The proposal also fully funds Obama's $556 billion for defense spending and adds $5 billion extra in spending for veterans.
While the budget resolution Congress considers is nonbinding and Obama does not sign it, the legislation sets spending and tax parameters for the upcoming fiscal year. The Senate will consider its own budget plan later on Wednesday and Thursday and any differences with the House must be resolved.
(Additional reporting by Jeff Mason and Thomas Ferraro; editing by Vicki Allen)