The US Congress late Thursday approved a $2.6 trillion budget plan for next year that calls for new tax cuts and spending reductions over the next five years. Republicans in the House of Representatives and Senate pushed through the budget blueprint without the support of a single Democrat. Before final votes, Republicans and Democrats squabbled over whether this budget outline for the fiscal year beginning on October 1 would set America on a path toward cutting US budget deficits in half, as President George W. Bush has promised, or whether it would add billions of dollars to already record budget deficits.
Bush praised Congress' work, calling the product "a responsible budget that reins in spending to limits not seen in years."
Among the key components are proposals for up to $106 billion in additional tax cuts over five years coupled with $35 billion in spending cuts over the same period.
Tax cuts could include the extension of lower capital gains and dividend tax rates. Details would be worked out later.
Included in the spending savings is a controversial plan to reduce the growth in funding for Medicaid, the health care program for the poor. The budget proposes $10 billion in savings over four years to the program that is run jointly by states and the US government.
But some senators speculated that Congress might find a way to dock programs other than Medicaid, such as Medicare, a federal health care program for Americans over 65.
Senate Budget Committee Chairman Judd Gregg, a New Hampshire Republican, said the budget embraced by Republicans "essentially freezes discretionary non-defence spending over the next three years and does it with enforcement mechanisms which are pretty effective."
Democrats countered that the plan would add $167.5 billion to US budget deficits over five years.
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