Brawl over Obama budget brews in U.S. Congress

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http://www.reuters.com/article/marketsNews/idUSN2437192320090324

Brawl over Obama budget brews in U.S. Congress

Tue Mar 24, 2009 5:06pm EDT

* Congress begins tough slog to write next year's budget

* Obama trying to rally Democrats

* Republicans seek to freeze non-defense spending (Adds details and quotes

throughout)

By Cowan

WASHINGTON, March 24 (Reuters) - Barack Obama is preparing for one of the

toughest fights of his young presidency as Congress begins work on a budget that

may trim his spending plans but back his healthcare, energy and education

proposals.

Obama will meet fellow Democrats in the Senate on Wednesday to try to shore up

support for a budget blueprint that likely would increase the deficit more than

initially estimated by the White House -- it's now expected to be $1.4 trillion

for next year.

The House Budget Committee will begin a marathon session on Wednesday to write

its version of the budget plan, followed a day later by the Senate Budget

Committee's crafting of its budget plan for fiscal 2010 and the four subsequent

years.

Republicans say Obama's budget plan expands government and raises taxes on the

rich and some small businesses at a time when the country is mired in a deep

recession. Obama, for his part, is trying to keep fiscally-conservative

Democrats on board.

There was some evidence he and Democratic leaders were making inroads in winning

support from that faction of the party. " I think it's going in the right

direction in terms of a smaller percentage increase in overall spending, " said

Senator Ben of Nebraska after a briefing on the Senate Democratic budget

plan.

Democrats, who control Congress, are looking for ways to shave some of the

spending requests in a bid to persuade enough fiscally-moderate members of their

party to support a $3.55 trillion budget next year.

Senate Budget Committee Chairman Kent Conrad said he would not grant Obama's

request for $250 billion that could be used, if needed, for another bailout of

the U.S. financial industry. Cutting that request was a major demand of moderate

Democrats.

" I'm hopeful we can have a majority of the House and Senate support " a budget

plan, said a cautious-sounding House Majority Leader Steny Hoyer.

Senate Minority Leader Mitch McConnell, in an interview with Reuters, said most

Republicans would not back the plan because it included tax increases and

spending hikes that would fuel the government's existing huge debt.

" There is little or no Republican support for this budget, " McConnell said.

Democrats, said Senator Patty Murray of Washington, a senior member of the

Senate Budget Committee, want to " put the middle class first and bring the

country out of the recession. "

To do that, Murray told reporters, Congress must invest more in education,

healthcare and alternative energy to create jobs, while shoring up domestic

programs that she said were largely ignored in the eight years of the Bush

administration.

" Now is not the time to sit back and criticize, " Murray said in a open warning

to Republicans.

But criticize is exactly what Republicans promise to do over the next two weeks

as the House of Representatives and Senate debate and try to pass a non-binding

budget resolution that will set national priorities for the next five years.

The Obama budget " changes the course of our nation in a fundamental way, " said

Senator Judd Gregg, the senior Republican on the Senate Budget Committee.

Gregg said he and his fellow Republicans will offer a series of amendments that,

taken together, would result in much lower annual budget deficits and a smaller

increase in a skyrocketing federal debt that is expensive to finance.

Republicans would like bigger increases in military spending, a freeze on

non-defense domestic programs and tax cuts, including on the estate tax. That is

a formula they used for budgets throughout former President W. Bush's

eight years in office.

Like some Democrats, Gregg also noted the need to control spending on the Social

Security, Medicare and Medicaid entitlement programs. But there's scant evidence

the Obama administration wants to tackle this problem immediately. (Editing by

Simao)