The 216-210 vote Thursday sets up negotiations with the Senate, which last week passed a budget blueprint with similarly large spending increases for education, defense, homeland security and veterans programs.

The measure comes in response to Democratic complaints that President George W. Bush has shortchanged domestic programs funded each year by appropriations bills — including education, health research and grants to local governments — while awarding deficit-boosting tax cuts tilted toward the affluent.

Democrats said the US$2.9 trillion (euro2.1 trillion) plan for next year would point the way to a surplus after years of red ink under Bush and a Republican-controlled Congress. Republicans said that US$153 billion (euro114.5 billion) surplus in 2012 would appear only if tax cuts passed in 2001 and 2003 expire in four years — amounting to the “largest tax increase in American history.”

The future of the Bush tax cuts will likely be decided after the 2008 presidential election. While in the majority, congressional Republicans never held votes to make all of them permanent, despite Bush’s annual calls to do so.

Bush huddled with House Republicans at the White House, saying afterward: “We spent time talking today about our strong belief that we’ve got to keep taxes low. “

The Democratic budget received brickbats from Republicans because it would produce a US$153 billion (euro114.5 billion) surplus in 2012 only by assuming tax cuts enacted during Bush’s first term expire. Those tax cuts include lowered rates on income, investments and large estates, as well as breaks for married couples and people with children.

The House plan would award domestic agencies, on average, budget increases of 6 percent over current levels, far more than the roughly 1 percent increases Bush recommended. Increases under the companion Senate measure are about 4 percent.

Congress’ annual debate on the budget 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 health care for the elderly, as well as the annual appropriations bills.

In most years, Congress leaves alone difficult budget issues such as the unsustainable growth in benefit programs such as health care for the elderly and simply focuses on the 12 annual bills funding the budgets of Cabinet agencies such as Defense, Education and Agriculture.

This year is likely to be such a stand-pat year. Decisions on the fate of the Bush tax cuts are expected to wait until after next year’s presidential election.

Extending the 2001 and 2003 tax cuts would cost about US$250 billion (euro187.2 billion) in 2012 alone, which would balloon to US$389 billion (euro291.3 billion) after accounting for extending other tax cuts and adjusting the alternative minimum tax so that it does not ensnare more than 20 million additional middle class taxpayers.

Democratic leaders view passing a congressional budget plan as a key test of their ability to govern. The Republican-controlled Congress failed to pass a budget last year, which fouled up passage of the annual spending bills lawmakers pass each year.

The Democratic budget blueprint calls for a nearly US$25 billion (euro18.7 billion) increase next year for domestic programs popular with lawmakers in both parties, approving Bush’s record US$50 billion (euro37.4 billion) budget increase for the Pentagon’s non-war budget and US$145 billion (euro108.6 billion) for operations in Iraq and Afghanistan next year.

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