House lawmakers plan to alter budget, reduce record deficit

WASHINGTON – The U.S. Senate has passed a version of President Bush’s budget that scales back a record deficit and alters his ambitious tax-cut plan, but Maine’s members of the House of Representatives say they are warming up to further change the $2.4 trillion proposal.

The House could consider the budget as early as this week, after the Senate on Thursday passed its version with a 51-45 vote. Maine Republican Sens. Olympia Snowe and Susan Collins both voted for the budget, albeit after attaching their own amendments or voting for others.

The Senate’s bill, passed mostly along party lines, sees a slower growth in spending and projects a deficit that would be $56 billion less over five years than the Bush proposal.

House Republicans have said that, unlike the Senate, they intend to stick with Bush’s tax package. But fiscally moderate and conservative Democrats say they will push for major changes to reduce the record $521 billion deficit the budget creates.

A spokesman for Democratic 1st District Rep. Tom Allen said he would focus on opposing tax cuts and reductions in services to veterans, Medicaid and education, among others, which he said were damaging to the nation.

“The tax cuts are irresponsible and just not what we should be doing. They make it difficult for businesses to expand,” said Mark Sullivan, Allen’s spokesman.

An analysis from Allen’s office points out that tax initiatives in the Bush budget could mean cuts of as much as $5 billion to all states over the next five years.

Further, the analysis finds, states could be forced to make deeper budget cuts or implement tax increases to make up for cuts in local grant programs. Maine, Allen said, already has cut state spending by 2.9 percent in the last year.

Sullivan said that although the Senate should be commended for taking the first step toward fiscal responsibility through changes to the tax package, “we have seen such moves in the past and they end up not being very effective.”

Under Bush’s budget proposals, public schools in Maine would gain even as literacy programs would be cut, veterans would pay more for health care, and small, rural businesses would lose loan programs.

The budget, which also cuts back on programs in health, housing and local law enforcement, however, increased homeland security and defense spending. And it introduced a tax-cut package that analysts warned could cost the nation $2 trillion over the next decade.

Rep. Michael Michaud is working with his Blue Dog Coalition, comprising 38 fellow moderate to conservative Democrats in the House, on an alternative budget proposal, a spokeswoman said.

The coalition opposed Bush’s proposal, saying it vastly increases the budget deficit.

When the budget proposal initially was released, Michaud expressed concern that it would threaten the solvency of the Social Security system.

“The congressman believes the president’s budget is irresponsible, and the Blue Dog alternative would give more funds for health care” among other things, said spokeswoman Monica Castellanos.

Once the House passes its version, that and the Senate version of the budget will be hammered by a conference committee into a package likely more acceptable to both chambers.

Although both House Republicans and Democrats have expressed dissatisfaction with the Senate version, senators say they have done a good job of alleviating cuts in programs and reducing the deficit. The changes, they say, will benefit both the nation and Maine.

Snowe voted for the amendment of Sen. Russell Feingold, D-Wis., which would put back in place “pay-as-you-go” rules for spending that expired in 2002. The rules require that if direct spending or revenue legislation causes an increase in the deficit, it must be offset by an equivalent amount of direct spending reductions, revenue increases, or a combination of both.

Snowe said the deficit was a “burden and a drain on our economy.”

“I believe it is imperative that Congress exert fiscal discipline to rein in our skyrocketing deficits. With ‘pay-as-you-go’ rules reinstated, we have brought needed restraint back to the budget-making process,” she said in a statement.

Snowe, however, sponsored an amendment that would make it easier to extend the child tax credit and relief for lower-income families. Spokeswoman Antonia Ferrier said the senator also had supported amendments to protect Medicaid and small businesses. Collins, a member of the Senate Armed Forces Committee, restored $7 billion in funds for defense, spokeswoman Jen Burita said.

“The U.S. is at war. … It is vital that we continue to provide adequate support to our national security interests and adequate resources for our soldiers to do their jobs as safely and effectively as possible,” Collins said in a statement.

Collins, who also chairs the Governmental Affairs Committee, authored an amendment that will reduce the cost of petroleum and increase funding for homeland security. The funds would go toward increasing port security, homeland security grant programs, and a grant to benefit first responders whose funding was cut in the Bush plan.

A major victory for Collins, Burita said, was an increase in Pell Grant funds from $4,025, proposed in the president’s budget, to $4,500 for each grant. Collins’ amendment added $1.7 billion to the Bush plan for the grants that are awarded to low-income students for postsecondary education.