Democrats' budget plans see surpluses, tax hikes

WASHINGTON - Democrats in the House and Senate trumpeted surplus-producing budget plans yesterday as their GOP rivals seized on looming tax increases in the Democratic spending outlines as a potent issue for the presidential campaign.

Democrats are backing twin $3 trillion budgets for 2009 that would produce sizable surpluses in a few years and provide generous increases for many domestic programs, but only by assuming major tax increases when President Bush's tax cuts expire in about three years.

All three major presidential candidates planned to be on hand today in the Senate for votes on taxes, a one-year ban on lawmakers' pet projects, and a vote to pass the measure. The timing of a final vote was not set. The House does vote today.

House debate began yesterday, as Republicans pressed an alternative plan that preserves Bush's income tax rate cuts and tax breaks for married couples, people with children, on investments, and for those inheriting multimillion-dollar estates. But the price for such generosity is harsh: cuts in Medicare, housing, community development, and the Medicaid health-care program for the poor and disabled.

The rival budget plans display the difficult trade-offs facing the next president, who must weigh tax cuts that expire at the end of 2010 against popular spending programs such as education, highway construction and Medicare. Simply put, it's impossible, under current estimates, to have it all and still be able to produce a balanced budget in a few years. The White House forecasts the deficit for the current year at $410 billion, nearly a record.

Republicans blasted the measures for assuming that the 2001 and 2003 cuts in taxes on income, investments, parents with children, and married couples would expire at the end of 2010.

Democrats countered that their nonbinding plan put the budget back in surplus while also making investments in infrastructure, education, community development, clean energy and other programs. They say it also avoids $196 billion worth of Bush-proposed cuts to Medicare and the Medicaid health-care program for the poor and disabled.

Congress' annual budget debate is guided by an arcane process in which a nonbinding budget resolution sets the stage for subsequent bills affecting taxes and benefit programs such as Medicare, as well as the annual appropriations bills. Unless such follow-up legislation is passed, the budget debate has little real effect and is mostly about making statements about party priorities. This is such a year.

In election years, Congress invariably leaves alone difficult budget issues such as the unsustainable growth in benefit programs such as Medicare, and focuses on the 12 annual bills funding the budgets of cabinet agencies such as Defense, Education and Agriculture.

More investment

in math and science education

and a more liberal policy toward skilled foreign workers are crucial if America is to avoid losing its competitive edge in

the world, Microsoft cofounder Bill Gates told Congress yesterday.

The shortage

of scientists and engineers is so acute that "we must do both: Reform our education system and our immigration policies. If we don't, American companies simply will not have the talent to innovate and compete," Gates said.

Gates said

the country

must improve educational opportunities in science and technology, revamp the visa system for highly skilled workers, increase federal funding for basic scientific research, and provide incentives for private-sector research

and development.

- Associated Press