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Congress negotiates budget outline

©Associated Press
April 12, 2003

WASHINGTON -- Congress approved a record $2.27-trillion federal budget Friday, winning a razor-thin Senate victory after Republican leaders promised to limit new tax cuts to half the amount President Bush has proposed.

The deal that won just enough votes to approve the overall budget restricted new tax cuts over the next decade to $350-billion. It was negotiated by Sen. Charles Grassley, R-Iowa, chairman of the tax-writing Senate Finance Committee, and required the vote of Vice President Dick Cheney to break a 50-50 tie.

Having initially sought $726-billion in tax cuts, the White House and House Republicans had reluctantly acceded earlier to tax cuts of $550-billion and were caught off guard by the lower final figure.

Bush issued a statement after the Senate vote reaffirming his commitment to getting the biggest tax cut he can.

"The budget resolution provides for a jobs and growth package of up to $550-billion, and we will work with the Congress to provide the greatest amount of tax relief to stimulate the economy," he said.

House Speaker Dennis Hastert called Grassley "irrelevant," saying he has an agreement with Senate Majority Leader Bill Frist of Tennessee that the tax cuts could reach the larger figure when Congress begins working on them in May.

"Our agreement was made with the Senate leadership, and they have the power to keep it," Hastert said.

Frist released a written statement saying he would work with the White House and House Republicans "to enact the biggest growth package in line with the president's request, period."

Grassley, however, also claimed commitments from Frist and Senate Budget Committee Chairman Don Nickles, R-Okla., in promising moderate Sen. Olympia Snowe, R-Maine, the cuts won't exceed $350-billion.

House Budget Committee Chairman Jim Nussle, R-Iowa, said he was offended that he wasn't told about Grassley's promise to Snowe, whose vote became pivotal in winning Senate approval of the budget. The House passed it a few hours before dawn Friday.

Meanwhile, House and Senate negotiators were still working to break a stalemate over millions of dollars in projects attached to separate legislation to spend $80-billion for war and domestic security. That bill would put $2.5-billion toward reconstruction in Iraq and give $3.1-billion in aid to the airline industry and its laid-off workers.

Lawmakers want to complete both measures before a two-week spring recess and were aiming to conclude their efforts this weekend. The House and Senate will return from the break to settle deep differences between the chambers over key pieces of the president's domestic policy.

Also on Friday, the House passed a comprehensive energy package that would allow oil exploration in an Alaska wildlife refuge, one of Cheney's top priorities. The Senate rejected the Alaska drilling policy last month.

The Senate has shown little appetite for passing a large tax cut this year and voted earlier to slash the president's original plan to $350-billion. Moderate Republican Snowe of Maine and George Voinovich of Ohio refused to accept anything more.

Acknowledging the impasse between the House and the Senate, Grassley persuaded Senate Republican leaders to back the smaller cut.

"As much as I wish it weren't so, that is the political reality," Grassley said while announcing the budget deal. "The reality is that the Republican caucus is split."

"Logic prevailed," Voinovich said.

The House voted narrowly, 216-211, to pass the budget early Friday morning.

The budget is a nonbinding resolution used by Congress to outline tax and spending policy. It projects deficits will peak next year at $385-billion, then decrease gradually until a $10-billion surplus is reached in 2012.

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