Senate Democrats move ahead on fiscal 2010 budget resolution

Senate Budget Committee Democrats on Thursday plowed ahead on an fiscal 2010 budget resolution, swatting down the first of a series of GOP attempts to curb spending as its markup continued.

Senate Majority Leader Harry Reid, D-Nev., said he would not rule out using the reconciliation process if Republicans threaten to block a floor vote. Reid said Senate Democrats will not use reconciliation to pass a healthcare overhaul or a cap-and-trade plan to curb greenhouse gas emissions, but he did not rule out using it in conference talks if reconciliation is allowed.

House Democrats kept that option open for health care and education when they marked up their budget resolution on Wednesday. "We're taking nothing off the table," Reid said.

Democrats defeated two Republican attempts to try to slow the growth of nondefense discretionary spending as the panel proceeded with amendments. The committee rejected, 13-10 an amendment offered by Sen. Jeff Sessions, R-Ala., that would have kept nondefense spending at fiscal 2009 levels in fiscal 2010 and fiscal 2011, while allowing a 1 percent increase in the subsequent three years. Sessions said the budget proposal unveiled by Senate Budget Chairman Kent Conrad, D-N.D., which would increase discretionary spending by 7 percent in fiscal 2010, would be unsustainable given the recent passage of the $410 billion fiscal 2009 omnibus appropriations bill and the $787 billion economic stimulus package. Conrad countered that Sessions' amendment would take funding from important programs and veterans' health care, and called it "unwise" to cut spending in a recession. The panel also defeated, 13-10, an amendment offered by Sen. John Cornyn, R-Texas, that would have limited the growth of nondefense spending to that of defense spending, which would be 3.8 percent in fiscal 2010 under Conrad's resolution.

The committee approved several amendments, including a Cornyn proposal to include a deficit-neutral reserve fund to allow Congress to create a bipartisan commission to sunset ineffective government programs and an amendment from Sen. Mike Crapo, R-Idaho, that would require the budget to clearly disclose the impact on the debt. A similar amendment was adopted to the Senate budget resolution last year but was dropped in conference.

Meanwhile, House Speaker Nancy Pelosi, D-Calif., on Thursday held the line on using budget reconciliation as an option, especially for healthcare reform. "I believe that that is best served by having reconciliation in the package," she said. Asked whether healthcare reform should be deficit neutral, she said she hopes that could be done. For their part, House Republican leaders offered up a statement of their policy principles on Thursday and promised to fill in the numbers for their alternative fiscal 2010 budget next week. House Minority Leader John Boehner, R-Ohio, and other top GOP lawmakers criticized the Democrats as "irresponsible" and insisted they would present a plan that spends less, taxes less and borrows less. The document said the GOP would provide tax incentives for millions more working families and small businesses to obtain access to private healthcare coverage. They would preserve tax breaks for domestic oil and gas producers, and open more land and offshore acreage to drilling.

They also proposed the privatizing of Fannie Mae and Freddie Mac, as well as a permanent fix for the alternative minimum tax. Also on the tax front, they would seek a simplified income tax code with a marginal tax rate for income up to $100,000 of 10 percent, and 25 percent on income in excess of that along with a lower capital gains tax rate.

Erin McPike, Dan Friedman and David Hess contributed to this report.