So much for you $400 tax cut.

[greenego]

Senate Democrats to scrap Obama’s $400 tax credit

NorthJersey.com: Senate Democrats to scrap Obama?s $400 tax credit

WASHINGTON — A top Democrat in the Senate announced a budget blueprint Tuesday that would scrap Barack Obama’s signature tax cut after 2010 and blends sleight of hand with modest cuts to domestic programs to cut the deficit to sustainable levels.

Senate Budget Committee Chairman Kent Conrad, D-N.D., promises to reduce the deficit from a projected $1.7 trillion this year to a still-high $508 billion in 2014. But to do so, he assumes Congress will let Obama’s "Making Work Pay" tax credit delivering $400 tax cuts to most workers and $800 to couples will expire at the end of next year. Those tax cuts were included in Obama’s stimulus package.

Conrad, D-N.D., who has for decades sought to highlight the dangers of permanent deficits and rising government debt, produced a budget plan bristling with both — even after proposing to bring tax rates on income and capital gains to largely rebound to pre-Bush administration levels.

At the same time, Obama’s controversial global warming initiative experienced a setback as House Democrats are declining to advance them under fast-track rules that could have effectively cut Senate Republicans out of the debate, Rep. John Spratt Jr., D-S.C., said Tuesday.

The developments come on the eve of debate in the House and Senate budget committees as they take the first steps to pass Obama’s $3.6 trillion budget plan for the fiscal year starting in October.

Obama’s budget has ignited a firestorm on Capitol Hill, with Republicans assaulting it over record spending and budget deficits, while many Democrats remain wary of his plans to combat global warming.

"It puts us on the path over 10 years for a very different kind of country, one with less freedom, one with more government, one with this extraordinary debt and one which our children will have a very difficult time affording," said Sen. Lamar Alexander, R-Tenn.

Conrad’s plan was released in the wake of new budget estimates that predicted Obama’s plan would produce alarming estimates of red ink — $9.3 trillion over 10 years and $2.3 trillion more than estimated by the White House just last month.

In grappling with the deficit, Conrad would cut Obama’s proposed increases for domestic agencies funded by lawmakers each year to growth of about $27 billion, or 6 percent for next year.

But Conrad also makes several shaky assumptions, especially that Congress will raise taxes by more than $114 billion over 2013-14 to make sure middle-class taxpayers won’t get hit by the alternative minimum tax. He also saves $87 billion by promising Congress will come up with spending cuts or new revenues to avoid cuts in Medicare payments to doctors.

Under Congress’s arcane procedures, the annual congressional budget resolution is a non-binding measure that sets the terms for follow-up legislation.

The congressional budget plan also determines how much money to use for defense programs and domestic programs whose budgets are set each year by Congress, and it sets out the fiscal priorities of the governing party in Congress.

The House wants to use the filibuster-proof measure to advance Obama’s health reform initiative, but is opting against giving his global warming initiative fast-track consideration.

Neither budget includes Obama’s $250 billion set-aside for more bailouts of banks and other firms.

Edited April 27, 2009 by greenego