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Congress nods to tax hikes in shaping post-Bush budget

WASHINGTON — The Senate on Thursday rejected the idea of renewing many of President Bush's tax cuts as all three major presidential candidates interrupted their campaigns to vote. The House approved a budget blueprint that would raise taxes by $683 billion over the next five years.

The Senate did embrace Bush reductions aimed at low-income workers, married couples and people with children.

The House budget plan would provide generous increases to domestic federal programs, but it still is designed to bring the government's budget back into the black by letting all of Bush's tax cuts expire at the end of 2010. That plan passed the House on a 212-207 vote with Republicans unanimously opposing it.

The Senate voted 99-1 to extend the cuts for some workers as well as couples and parents. Senators voted 52-47 to reject a move to extend tax cuts for middle- and higher-income taxpayers, investors and people inheriting businesses and big estates.

The votes were mostly symbolic, but they put senators in both parties on the record for when the tax cuts actually expire in three years.

Arizona Sen. John McCain, the presumptive Republican presidential nominee, voted for the full roster of Bush tax cuts. Democratic presidential rival candidates Hillary Rodham Clinton, D-N.Y., and Barack Obama, D-Ill., voted against them.

The Senate was debating and voting into the night on a $3 trillion Democratic budget blueprint for 2009. The non-binding plan envisions a balanced budget in four years and promises generous increases for domestic programs, but achieves those goals only by assuming major tax increases when Bush's tax cuts expire.

Obama and Clinton both promise to reverse Bush's tax cuts for wealthier taxpayers, but the Democratic budget they'll be voting for would allow income tax rates to go up on individuals making as little as $31,850 and couples earning $63,700 or more.

The House measure anticipates larger surpluses while allowing $683 billion worth of tax increases over five years with the expiration of Bush's tax cuts.

Congress' annual budget debate involves a non-binding budget resolution that sets the stage for subsequent bills affecting the annual appropriations bills. Unless such follow-up legislation is passed, though, the budget debate has little real effect.

Congress rarely tackles difficult budget issues as elections loom, however, and a standoff with Bush means that Democrats might even take a pass on advancing the 12 appropriations bills.