US PRESIDENT Barack Obama’s administration yesterday voiced satisfaction that most of its $3,600 billion (€2,674 billion) budget remained intact as the plan moved a step closer to final legislation on Capitol Hill.
Democrats in the Senate and House of Representatives passed budget blueprints on Thursday night that included investments in education and “green energy” and opened a pathway to healthcare reform.
The plans also fulfilled Mr Obama’s promise to eliminate tax cuts for the wealthy introduced by George W Bush while offering relief to lower earners.
There were some significant setbacks for the White House, including the loss of measures to tackle climate change and, in the Senate version, a one-year limit on Mr Obama’s signature “Make Work Pay” tax cuts.
Congress also removed a $250 billion provision proposed by the White House for possible future bank bailouts and avoided a permanent fix to the alternative minimum tax – a tax originally intended for the wealthy that is increasingly threatening middle-class families.
While most of Mr Obama’s discretionary spending plans were preserved in the House budget, the Senate shaved $15 billion off the White House request – with international aid among the biggest victims.
But a senior administration official said the White House was “very pleased with the contours” of the congressional plans and felt its main objectives had survived.
Both the House and Senate embraced Mr Obama’s call for increased deficit spending in the near-term, while aiming to halve the deficit by 2013 through efficiency measures and revived economic growth.
The House and Senate must reconcile their rival budgets over the next few weeks before passing final tax and appropriations legislation for the 2010 fiscal year starting on October 1st.
In a sign of the tough battles ahead, not a single Republican supported either the House or Senate budget.
The biggest flashpoint is likely to involve healthcare, with Democrats keeping open the option of pushing reforms through the fast-track budget “reconciliation” process, which allows for speedier legislation and requires fewer votes to pass. – (Copyright The Financial Times Limited 2009)