By Carl Hulse and David M. Herszenhorn
WASHINGTON, February 27, 2009 — For years, congressional Democrats tried to avoid anything that would let Republicans slap the tax-and-spend label on them. But on Friday, they cautiously embraced President Barack Obama's budget, with its ambitious blend of new spending and tax increases, calculating that they can turn the old attack line to their benefit.
As they began to digest the administration's fiscal blueprint, even Democrats with reservations hailed it as a long-overdue example of honesty in federal budgeting after years of what one lawmaker called "fudgeting."
Several said they saw the tax increases as reasonable ones that could be sold to the public in difficult economic times, especially because middle-class taxes would be cut under the president's plan.
"The American people have been denied the truth for many years," said Rep. Jim Cooper, a Tennessee Democrat who has long warned of the dangers of rising deficits. "They are willing to take their medicine if it leads to a strong country."
Yet even as Democrats praised what they described as the bold, broad strokes of the spending plan, fault lines began to show on important provisions regarding taxes, agriculture, energy and education, making it clear some elements would be revised or jettisoned as the proposal makes its way through Congress over the next two months.
Sen. Kent Conrad, D-N.D., chairman of the Budget Committee, said Obama's call to raise federal dollars by limiting income tax deductions for families earning above $250,000 might have to be rethought. "That may be a bridge too far," Conrad said.
Other lawmakers and some advocacy groups warned that the limits could cut donations to already struggling charities by reducing the value of deductions for contributions from donors in the upper tax brackets.
While most Americans would get a slight tax cut under Obama's plan, the budget would also allow Bush-era tax breaks for the wealthy to expire. Some Democrats said they were uneasy about that as the country struggled to end a recession.
"I am certain that it is going to be very difficult and doesn't work to be raising taxes in a time when we are experiencing major adjustments in our economy," said Sen. Ben Nelson, D-Neb.
Administration officials emphasized their push to halve the deficit in Obama's first term and noted that the central tax increases would not take effect for two years, when a rebound of the economy is expected to be under way. Some Democrats said that seemed acceptable when balanced against the tax cuts for the middle class.
"The increases in most cases, as I see it, restore the tax burden that existed in 2000," said Sen. Byron L. Dorgan, D-N.D. "And it seems a perfectly reasonable thing to do."
Sen. Tom Harkin, Democrat of Iowa and chairman of the Agriculture Committee, said he was pleased that Obama was moving to curtail a subsidy program Harkin had long opposed. "I have never been a fan of direct payments," the senator said. "I always thought that they were illogical and counterproductive."
To some, the debate was reminiscent of 1993, when President Bill Clinton narrowly forced through a five-year economic plan that raised taxes, limited military spending and funneled money to favored Democratic initiatives.
Republicans stood united in their opposition and ended up wresting control of Congress from the Democrats in 1994.
But Democrats and others say the comparison is flawed because there was no economic crisis when Clinton increased gas taxes and raised income tax rates on affluent Americans. In addition, congressional Democrats were unraveling in 1993, while in the November election, the party increased its majority in both chambers.
Source: The New York Times
 

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