Congress Approves a New $2.6 Trillion Budget for 2006

KWAME HOLMAN:

Moments after the House of Representatives approved a five-year budget plan last night, President Bush hailed its passage as one of his top domestic priorities.

PRESIDENT GEORGE W. BUSH:

There's the budget agreement, and I'm grateful for that. We are making progress.

KWAME HOLMAN:

But that progress was hard-fought. In the House, the budget plan prevailed narrowly, 214-211, after a range of disagreements over tax and spending policies. And in the Senate, the outcome was in doubt until just before midnight, when the budget measure passed 52-47, with Vice President Cheney standing by in case a tie-breaking vote was needed.

Republicans said the votes were an affirmation of their priorities, to reduce government spending and cut taxes. House Majority Leader Tom DeLay:

REP. TOM DeLAY:

This is the budget that the American people voted for when they returned a Republican House, a Republican Senate and a Republican to the White House last November.

KWAME HOLMAN:

House Democrats, who complained they had only three hours to read the Republican budget, argued the plan will increase the deficit even while hurting programs for the poor. Steny Hoyer is the Democratic whip.

REP. STENY HOYER:

Very frankly, I listened to the Republican comments about this budget, and I cannot decide whether it is George Orwell or Lewis Carroll who is writing their stuff. Up is down, down is up, black is white, huge deficits are really savings. My, my, my.

KWAME HOLMAN:

The budget resolution sets the framework for specific tax and spending bills Congress will take up later this year. There was wide agreement on its calls for increased defense and homeland security spending, but two other components were debated heavily in both chambers.

First, the growth in spending on entitlement programs would be cut for the first time since 1997, by $35 billion. Ten billion dollars would come from Medicaid, the primary health program for the poor. The budget plan also makes room for $106 billion in tax cuts over the next five years, including on capital gains and dividend income.

Democrats assailed the idea of cutting taxes paid by the wealthy while slashing benefits to the poor. Ohio's Sherrod Brown:

REP. SHERROD BROWN:

How can any member of this body go home and tell our constituents, "I took health care away from impoverished children and home care away from impoverished seniors, but don't worry, I gave Ken Lay another tax cut."

KWAME HOLMAN:

But Republicans argued that tax cuts spur growth in all economic sectors and ultimately reduce deficits. California's David Dreier:

REP. DAVID DREIER:

We know that the single most important thing we can do to deal with this deficit issue is to continue to see the economy grow, and that is exactly what the tax cuts in this measure will do, as they have done.

KWAME HOLMAN:

Nonetheless, Democrats bore in on the proposed reductions in Medicaid spending. House Democratic Leader Nancy Pelosi:

REP. NANCY PELOSI:

Republicans must explain to the American people, who oppose Medicaid cuts by four to one why they insist on slashing funds for sick children, seniors in nursing homes, and the disabled.

KWAME HOLMAN:

But Republican Joe Barton said Medicaid needs to be reformed, and that can be done without harming the poor.

REP. JOE BARTON:

We're not talking about trying to do things to kick people off the rolls. We're talking about things like letting people stay at home instead of having to go to a nursing home to get long-term care. We're talking about giving the states the flexibility perhaps to decide how to price some of their pharmaceuticals.

KWAME HOLMAN:

The proposed cuts to Medicaid originally were $6 billion larger, but were scaled back to appease Republican moderates in the Senate. Oregon's Gordon Smith had called for no cuts to Medicaid, but after weeks of negotiation, Senate leaders persuaded him to accept some cuts in exchange for a promise they'd be carefully administered by the Department of Health and Human Services.

SEN. GORDON SMITH:

While not perfect — and I've got a long list of things they rather not be there — this is a beginning and not an ending. But we don't get to the end until we finish this budget.

KWAME HOLMAN:

With the Republican budget resolution in place, Senate Democrats won't be able to use the filibuster to block certain tax cuts or the long- sought plan to allow oil exploration in Alaska's Arctic National Wildlife Refuge.