Wed, Apr 29, 2009 - Page 7 News List

Democrats announce agreement on health budget pact

AP , WASHINGTON

Congressional Democrats sealed an agreement on Monday night on a budget plan that would help US President Barack Obama overhaul the healthcare system, but allows his signature tax cut for most workers to expire after next year.

Senate Budget Committee Chairman Kent Conrad announced the agreement and key details in a statement.

Most importantly, the congressional budget plan would prevent Senate Republicans from delaying or blocking Obama’s plan to vastly expand government-subsidized health care when it advances this fall.

The US$3.5 trillion plan for the budget year starting Oct. 1 embraces several of Obama’s key goals besides health care reform, including funds for domestic programs and clean energy, and a tax increase for individuals making more than US$200,000 a year or couples making more than US$250,000.

But the plan would allow Obama’s signature US$400 tax cut for most workers and US$800 for couples to expire at the end of next year. Even after squeezing the defense and war budgets to levels that are probably unrealistic, the plan would cause a deficit of US$523 billion in five years.

“I think this is a good budget,” Conrad said. But “much more will have to be done to get us on a more sustainable course,” including slowing the growth of benefit programs like Medicare and overhauling the tax code, he said.

Conrad forced cuts of US$10 billion from Obama’s US$50 billion boost for non-defense programs funded by Congress each year — not much in the grand scheme but strongly resisted by House Appropriations Committee Chairman David Obey. Future increases for non-defense operating budgets would be far less generous than Obama’s budget, averaging 2.9 percent, though history would suggest that Congress won’t follow through on the long-term promises.

Democrats also focused a lot of attention on preserving former US president George W. Bush’s tax cuts for middle-class workers, investors and families with children.

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