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Senate OKs budget plan, setting stage for tax cut

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WASHINGTON (CNN) -- The Senate voted at midday Thursday to approve a compromise budget resolution that calls for $1.35 trillion in tax cuts over the next 11 years.

The vote was 53-47 in the evenly divided chamber, ending just as the clock struck noon. Five Democrats joined 48 Republicans to vote "yea." The Senate's two maverick moderate Republicans, Lincoln Chafee of Rhode Island and James Jeffords of Vermont, voted "no."

Senate Majority Leader Trent Lott, R-Mississippi, said President Bush had phoned the Senate to offer his congratulations and thanks.

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The measure, which sets spending parameters for the congressional appropriations process for the fiscal 2002 budget, squeaked through the House on Wednesday, 221-207. The compromise between House and Senate versions was worked out by congressional and White House negotiators last week.

Democrats monopolized the Senate floor Thursday morning, getting their last licks in on the non-binding resolution with just minutes to spare before the vote was called.

Sen. Robert Byrd, D-West Virginia, took to the floor as soon as Thursday's business was gaveled to order and blasted the conference report, saying prescribed allocations for fiscal 2002 did nothing to rectify a growing number of national infrastructure problems.

"This budget is a bad deal for America. It fails to address critical deficiencies in our nation's schools, highways, drinking water and sewage systems, law enforcement and energy independence," Byrd said. "The list goes on and on."

"This budget places short-term, political partisan gratification ahead of the nation's needs," Byrd said.

Other Democrats quickly followed, with Senate Budget Committee ranking Democrat Kent Conrad of North Dakota reading a virtual grocery list of perceived flaws to the budget.

Budget outlays and the Republican tax cut, Conrad argued, are based on assumptions of a roughly $4.6 trillion budget surplus by 2010, but those projections will crumble, he argued, when the first of the so-called Baby Boomers begin to retire in 2008.

The long-feared retirement of the Baby Boom generation, Conrad argued, will place significant strains on the Medicare and Social Security trust funds, trust funds that may be raided, he predicted, later in the year when the Republicans present an expanded defense budget.

"We know when the Baby Boomers start to retire that these surpluses turn to massive debts," he said.

Budget Chairman Pete Domemici, R-New Mexico, said he would not dare mislead his Senate colleagues into voting for a resolution that threatened the government's two largest entitlement programs.

"We have done everything in this budget that you could do in a rational way to ensure the surplus is handled properly," he said. "I would not be asking for people to vote for a budget resolution that touches the Social Security trust fund, or touches Medicare."

Passage was all but assured about an hour before the vote when influential centrist Democrat John Breaux of Louisiana said he would vote in favor.

Breaux described the budget as imperfect, but said it was sufficient enough to "advance the cause of government in a democracy that is almost evenly divided between the two parties."

New budgeting phase begins

resident Bush thanked the House late Wednesday afternoon for passing the resolution, which succeeded despite fierce Democratic criticism that the majority GOP was poised to stage raids on Medicare and Social Security to finance the party's priorities.

In a written statement Bush called the vote a triumph of bipartisanship, despite the fact that only six Democrats broke ranks to support the resolution. Three Republicans chose not to support it.

"[The] bipartisan budget vote in the House is a victory for fairness and the American people," Bush said. "I commend Republicans and Democrats for joining together to pass a budget framework that will return money to the taxpayers and provide reasonable spending increases."

The next phase of the budget process will begin with congressional appropriations subcommittees setting annual allocations for the federal government's departments and agencies, and the Senate Finance and House Ways and Means committees drafting tax relief bills that conform to the budget resolution.

The 2002 fiscal year begins on October 1 of this year. Republicans hope to have a tax-relief bill signed into law by Memorial Day, just three weeks away.

House passage of the conference report came one day after House and Senate Republicans agreed on the $1.97 trillion compromise. The full amount of federal spending mirrors the budget blueprint sent to the Congress by Bush in February, with some spending priorities shifted.

The resolution calls for $1.35 billion in tax relief over the next 11 years, somewhat less than Bush's proposed $1.6 trillion cut over 10 years. Bush's plan was sidetracked in April when the Senate shaved billions off the tax cut in favor of increased education spending.

"This conference report illustrates how working together can benefit all Americans, both taxpayers and those who depend on federal programs," said Rep. Porter Goss, R-Florida, as Wednesday's House debate opened. "This debate is not about winning or losing. It is about treating American taxpayers fairly."

Republicans praised the day's developments, saying House approval of the resolution represented the first time in more than two decades that an administration-drafted federal budget was passed in its near-entirety.

"Presidential budgets have always been declared 'dead on arrival,' as long as I have been here," said Rep. David Drier, R-California.

Democrats were livid, saying the conference report shaved $21 billion from Bush's original calls for education allocations, and even more than what the Senate had called for in April.

"Each day that this debate goes on, education is losing ground," said Rep. Rush Holt, D-New Jersey.

"We can see the dollar figure cut out of the education budget that was put in by the Senate," said Rep. Jay Inslee, D-Washington. "That number is minus $294 billion.

Inslee took a poke at the president's occasional verbal miscues as he continued. "The president recently asked, 'Is our children learning?' Well in this budget, they is not."

Rep. Jim Nussle, R-Iowa, chairman of the Budget Committee, said Democrats were making the wrong argument.

"This isn't a county sale barn where we're bidding on a prize heifer. There is more we need to do. We need reform," Nussle said.



RELATED STORIES:
Bush praises House passage of budget resolution
Bush budget boots defense, education

RELATED SITES:
The White House
U.S. Office of Management and Budget
U.S. Congressional Budget Office

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