Dems turn to Bush-style budget tricks

[Ron Burgundy]

AP - Democrats are using the same tricks as President Bush in their rival plan to balance the federal budget by 2012: ignoring long-term costs of the war in Iraq and the need to fix a tax law that threatens unsuspecting middle-class families.

Bush used phantom savings to claim he can balance the budget while extending his tax cuts into the future. Democrats would use that money to increase spending on education, health research and other domestic programs while claiming to be budget balancers.

"They say they balance, but they do it by leaving out things," Senate Budget Committee Chairman Kent Conrad (news, bio, voting record) said on PBS' "The NewsHour with Jim Lehrer" when Bush's budget came out Feb. 5. "They leave out fixing the alternative minimum tax. They leave out realistic war cost."

Bush's one-year stopgap fix to the alternative minimum tax, or AMT, "will be felt by people as a huge tax increase" later on, Conrad, D-N.D., said later.

The same could be said of his own plan that arrived Tuesday on the Senate floor. It has only a two-year fix to the AMT.

Then there's the war in Iraq. After proposing $145 billion for Iraq and Afghanistan for next year, Bush's budget proposes just $50 billion for 2009 and none at all after that.

Conrad's budget mirrors Bush's war request. The same flaws that Democrats derided in Bush's plan also exist in House Democrats' budget plan. Both Democratic plans also don't deal with scheduled cuts in the Medicare program.

"I concede your point," House Budget Committee Chairman John Spratt (news, bio, voting record), D-S.C., said of similar omissions in his and Bush's proposals.

With Democrats controlling the Senate by a single vote, Conrad adopted a lowest common denominator approach aimed at preventing Democratic defections.

"Ideally the budget resolution should contain more realistic assumptions. But if he starts making those assumptions he starts losing people," said Robert Bixby, executive director of the Concorn Coalition. "And then it would be questionable whether he can pass a budget resolution. So I think this is more about political choices than actual budgeting."

As an example, Republicans on Conrad's committee forced a vote last week to make higher-income Medicare beneficiaries pay more for prescription drugs. Conrad supports the idea but voted against it, fearing some in his own party would turn against the bill.

At the same time, Conrad and Democratic leaders are scrambling to hold onto the handful of Democrats who voted for Bush's tax cuts in 2001 and 2003.

It's commonly assumed that much of that tax relief — cuts in taxes on income, married couples, people with children, investments and inheritances — will be extended in 2010.

But Conrad's budget assumes they expire, creating heartburn for Democrats such as Max Baucus (news, bio, voting record) of Montana and Mary Landrieu (news, bio, voting record) of Louisiana, both up for re-election next year. Together with Sen. Ben Nelson (news, bio, voting record), D-Neb., they're having Conrad's bill rewritten to extend the $1,000 per child tax credit and other middle-class tax breaks.

Conrad says that while his budget mirrors Bush's budget for the war, it's actually in line with the predominance of sentiment in the Democratic caucus because it assumes troops will be withdrawing from Iraq in the fall of 2008.

"The war cost with our policies is far more realistic than the president's war cost numbers and his policies," Conrad said.

As for the AMT, Conrad defends his budget for only assuming taxpayers get relief for two years. That at least punts the issue of a long-term AMT fix — financed by politically wrenching tax increases elsewhere in the IRS code — beyond next year's election.

"It's not going to happen in a presidential year," Conrad said.

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The bill is S.Con.Res. 21.

source: http://news.yahoo.com/s/ap/20070321/ap_on_go_co/democrats_budget [link]