House GOP OKs deficit plan that spares future tax cuts

Republicans tackle two goals: reduce the deficit but save tax breaks.
WASHINGTON (AP) -- House Republicans are standing by President Bush with a plan for containing deficits that would curb expanded benefits for Medicare and other programs, but leave future tax cuts unfettered.
By voice vote, Republicans pushed an election-year bill through the House Budget Committee on Wednesday requiring lawmakers to find spending cuts to pay for any enlargements in benefits. Such savings would not be required for tax reductions -- an exemption favored by Bush and congressional GOP leaders.
The panel also used a party-line, 24-19 roll call to approve a $2.41 trillion budget for 2005. The fiscal outline, which sets guidelines for future tax and spending bills, mostly follows Bush's priorities but maps faster deficit reduction, smaller tax cuts and tighter spending than he has proposed.
Contradictory goals
Both measures underlined a GOP effort to tackle two goals that Democrats and many deficit hawks see as contradictory: cutting taxes and attacking federal red ink expected to blossom to a record half trillion dollars this year.
"They're trying to convince the public they're concerned and serious about addressing growing deficits, while at the same time not sacrificing their sacred cow of tax cuts," said Robert Reischauer, head of the liberal-leaning Urban Institute and former director of the nonpartisan Congressional Budget Office.
Republicans say tax cuts stimulate economic growth and should not be capped.
"The real challenge to the deficit long-term is controlling the spending side," said Budget Chairman Jim Nussle, R-Iowa.
The conflicting themes -- erasing red ink yet reducing federal revenues, endorsing Bush priorities while recasting them -- illustrate a balancing act that Republicans face this political year.
They want to pursue their long-held doctrine of cutting taxes, particularly valued by their conservative and business supporters.
Soaring deficits
But soaring deficits are attracting voters' attention. That means they must address that problem even as the loss of 2.2 million jobs under Bush has fueled Democratic accusations of economic mismanagement.
"They've created a mess, and now they're trying to cover their flanks," said Rep. Rahm Emanuel, D-Ill.
The House budget claims to trim this year's projected $477 billion shortfall in half in four years -- a year ahead of Bush's five-year plan. The budget approved by the GOP-dominated Senate takes three years for that task.
The bill requiring savings to offset spending increases is aimed at addressing that same problem.
But the sheer size of deficits -- and the urgency to deal with them -- is causing fissures within the GOP. Many moderate Republicans are uneasy with a deficit-control mechanism that applies only to spending.
"I'm not sure reducing taxes and cutting deficits are necessarily corollaries of each other," said moderate Rep. Michael Castle, R-Del.
In a defeat for Republican leaders and Bush, four moderate GOP senators joined Democrats last week in winning Senate passage of a mechanism requiring savings for spending boosts and tax cuts.
Even as the House budget panel approved its version of the plan, top Republicans acknowledged that its fate in the full House was uncertain.
"We need to work to make sure we have the votes" to pass it, Nussle acknowledged.
Dem effort rejected
The House budget panel rejected a Democratic effort to require savings for tax cuts by a party-line 24-18 vote.
The House committee's budget would increase defense and anti-terrorism spending like Bush requested, while holding most domestic programs to the same levels as last year.
The budget would allow $138 billion in five-year tax cuts -- including renewals of expiring breaks for married couples and families with children and the expanded 10 percent tax bracket. But it would ignore Bush's effort to make permanent other tax cuts expiring later this decade, the bulk of the $1.3 trillion in 10-year tax reductions he has proposed.

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