Democrats Pass A New Spending Plan
Thursday, March 29, 2007PAUL KANGAS: House Democrats passed a budget today that reaches balance, but only if President Bush's tax cuts are allowed to expire in 2011. The $2.9 trillion spending blueprint would eventually yield a surplus. But as Darren Gersh reports, the question of exactly how Democrats would put the budget into the black remains to be answered.
DARREN GERSH, NIGHTLY BUSINESS REPORT CORRESPONDENT: House Democrats promise to spend more money on education, veterans care and national security. But House Speaker Nancy Pelosi says her party's budget still stems the flow of Federal red ink.
REP. NANCY PELOSI, HOUSE SPEAKER: It does it all in a fiscally sound way, no new deficit spending, pay as you go.
GERSH: Under the spending plan, the first since Democrats took back the House, the deficit will rise from $209 billion this year to $241 billion in fiscal year 2009, then reaching a $153 billion surplus in 2012. Top priorities include adding $50 billion to expand health insurance for children and setting aside another $50 billion to keep the alternative minimum tax from catching more middle class taxpayers next year. Budget analysts give Democrats some credit for sticking with tighter budget rules that require new spending be offset with other cuts or tax increases. But at the Committee for a Responsible Federal Budget, Maya Macguineas says the key details are still to come.
MAYA MACGUINEAS, DIRECTOR, COMMITTEE FOR A RESPONSIBLE FEDERAL BUDGET: These budgets have been pretty forward on saying what kind of things they do want to do, where they want to spend more money, that they want to extend middle class tax cuts. They've been willing to get specific on the good stuff, but stayed pretty vague on the hard stuff.
GERSH: Hard stuff like taxes. Under current law, the president's tax cuts expire in 2011. Extending all of them would cost $250 billion a year. Democrats say they'll extend the middle class cuts, but they haven't spelled out how. And that's what worries Wisconsin Republican Paul Ryan.
REP. PAUL RYAN (R) WISCONSIN: No matter how they spin it, no matter how they duck it, no matter how they hide, they are raising taxes.
GERSH: Meanwhile, Senate Democrats are raising the budgetary stakes. On a mostly party-line vote, they attached a timetable for withdrawal from Iraq to a war-funding bill. The president has vowed to veto that bill. Darren Gersh, NIGHTLY BUSINESS REPORT, Washington.
