Congress Approves $3.5 Trillion Dollar Budget Plan

Passage of the budget blueprint marks a key step toward advancing health care reform legislation, a cornerstone of the Obama administration's agenda.

At a press conference marking his 100th day in office President Barack Obama praised Congress for adopting the plan, which he called a blueprint for the nation's future.

"This budget builds on the steps we've taken over the last 100 days to move this economy from recession to recovery and ultimately to prosperity," the president said.

The measure passed the House with a 233-193 vote, with no Republican votes and it passed the Senate 53-43, also without any votes from the GOP. Pennsylvania Sen. Arlen Specter, who announced this week he was switching from the Republican Party to the Democratic Party, voted against the bill.

Three other Democrats also voted no: Ben Nelson of Nebraska, Robert Byrd of West Virginia and Evan Bayh of Indiana.

"It's a budget that reduces taxes, lowers the deficit and creates jobs," House Speaker Nancy Pelosi, D-Calif., said. "It honors the three pillars of the Obama initiatives: energy, health care and education."

The $3.5 trillion plan is a nonbinding guideline for how to spend federal money and where that money will come from. One of the key aspects of the budget is that it permits the Democrats to use a parliamentary rule called "reconciliation" on the issue of health care reform.

Reconciliation is a rule first used by Congress in 1980 to allow for decisions on revenue and spending to move quickly thorough the Congress and was designed to make it easier to reduce deficits. It would make it possible to pass health care reform legislation with 50 votes in the Senate.

Because this rule is included in the budget, the Senate will be positioned to pass health care reform legislation, with a simple majority and avoid filibusters from Republicans.

Isabel Sawhill, director of the Center for Budget and National Priorities at the Brookings Institution said the reconciliation rule is crucial to the Democrats goal of reforming U.S. health care coverage.

"Even though it's rather arcane, the reason (reconciliation) is so important is that it may determine whether we have health care reform this year or we don't have health care reform this year," Sawhill said. "I don't think it's going to be possible to get meaningful health care reform if you have to have a bipartisan vote."

The budget includes money for energy, education and includes money for the wars in Iraq and Afghanistan. The plan also raises the tax rate on Americans making more than $200,000 a year, after 2010. It maintains tax cuts for middle class taxpayers put in place by President George W. Bush, according to the Associated Press.

The plan largely skirts tough decisions on how to pay for Mr. Obama's health care plan, which is expected to cost more than $1 trillion over the next decade

It also leaves a $1.2 trillion deficit next year, a figure that outraged Republicans. House Minority Leader John Boehner called the budget "nothing short of the most audacious move to a big socialist government in Washington D.C. than anything I could have ever dreamed about."

Although Mr. Obama got most of what he wanted, Congress trimmed some of his tax cut proposals and money set aside for more emergency bank loans should the financial crisis worsen.

Brian Riedl, a fellow in federal budgetary affairs at the Heritage Foundation said Congress effectively rubber-stamped what the president wanted.

The president's influence on the budget process reflects his high standing among fellow Democrats and the country, according to Riedl.

"If the president is of the same party, his budget is often used as a starting point. If the president and Congress are of different parties the president's budget becomes an expensive doorstop: it's not read it's not taken seriously at all," Riedl said.

Riedl said it was particularly interesting that Mr. Obama received so much support considering his budget was so bold, and said that could be a result of the president's high popularity ratings.

And while lawmakers left the White House spending priorities largely in place, it doesn't guarantee easy passage for future initiatives.

"It doesn't make it easy for him to achieve these goals of expanding health coverage and reforming energy policy and adding more money to education, but it does allow them to happen, and that's significant," Washington Post reporter Shailagh Murray told the NewsHour on March 25, as President Obama lobbied Congress for support of his budget plan.

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