House passes FY09 budget plan White House opposes

By Richard Cowan and Donna Smith

WASHINGTON (Reuters) - The House of Representatives on Thursday approved a fiscal 2009 budget plan that attempts to produce a surplus by 2012 while rejecting many of President George W. Bush's domestic spending cuts.

On a partisan vote of 212-207, the House approved the non-binding $3 trillion budget blueprint, which will help guide congressional committees that write spending and tax bills. Fiscal 2009 begins on October 1.

The Democratic plan would spend $22.4 billion more than Bush requested for next year for domestic programs and would let some of Bush's tax cuts expire after 2010. The White House warned Bush would veto bills that spend more than he requested in February for domestic programs and the president wants permanent extension of his tax cuts

"The last thing our economy needs is a massive tax increase. I think these guys may have been reading their economics book upside down," White House spokesman Tony Fratto said after the House bill passed.

House Budget Committee Chairman John Spratt, the South Carolina Democrat who crafted the measure, accused Republicans of offering an alternative budget that he said would pay for continuing the Bush tax reductions with "emasculating cuts to (domestic) programs that are critically important."

The House defeated the Republican version before approving the Democratic majority's budget.

Rep. Paul Ryan of Wisconsin, the senior Republican on the House Budget Committee, said the Democratic budget that passed "raises taxes; $683 billion on everybody, not just rich people."

The election-year budget plan projects a $340 billion deficit in fiscal 2009, which would transform into a $178 billion surplus in 2012.