Congress reaches budget deal; House vote set for Wednesday

From Capitol Hill producers Dana Bash and Ted Barrett

WASHINGTON (CNN) -- Congressional Republicans approved a $1.97 trillion budget compromise they say they will pass despite objections from moderate Democrats who want more education spending.

The deal was hammered out in days of closed-door meetings, including spirited talks off the Senate floor Tuesday. Republicans say they have the votes to get the budget outline through the evenly divided Senate. White House and GOP Senate leaders cleared a major hurdle by reaching an agreement with moderate Democrats on an 11-year, $1.35 trillion tax cut that explicitly calls for $100 billion to be used for a stimulus in the next two years.

Some of those centrist Democrats said education spending that was in the budget resolution the first time it passed the Senate had been stripped out and they were demanding a $6 billion increase in exchange for their votes. But senior GOP and White House aides said they decided to "hold the line on spending," banking on getting enough votes from moderate Democrats who wanted to support tax cuts.

RESOURCES Whitehouse.gov: President Bush's budget blueprint CNNACCESS: Sen. Tom Daschle explains why some on Capitol Hill aren't satisfied with budget deal     MESSAGE BOARD Taxing and spending: Bush budget

Fifteen moderate Senate Democrats, led by Sen. John Breaux, D-Louisiana, held the key to passing an earlier version of Bush's budget. That version included a smaller tax cut and higher spending.

Breaux admitted that coalition was now fractured, but he said he never thought all of the centrist Democrats would vote for the final budget resolution after it came out of the House-Senate conference.

Breaux said he still hoped it would gain enough support to send a strong bipartisan message about the new tone in Washington.

"I was hoping this could get 60 votes to send a good signal to the American public," said Breaux, who was unclear exactly how many Democrats would stay on board.

The break in the Democrats' centrist coalition came out during a meeting Tuesday morning that two aides described as "confrontational." The session centered on whether to give in on education funding because increasing spending would jeopardize passage in the House, or to use their clout as a group to force Republicans to push for more money for schools.

Privately, GOP aides were ecstatic because, they said, they have effectively diminished the power the centrists' coalition used to force Bush to scale back his tax cut in the first place.

Republicans hoped that political pressure to vote for a tax cut would lure votes from some of the moderate Democrats concerned about education spending, like Sen. Mary Landrieu of Louisiana and Sen. Evan Bayh of Indiana.

White House aides said they may include non-binding "Sense of the Senate" language in the budget to appease some Democrats, which would signal intent to use any further spending for education.

The House is scheduled to take up the measure Wednesday afternoon. A GOP leadership aide told CNN that Republicans expect to pass the bill with nearly unanimous GOP support and several votes from conservative Democrats.

The Senate is expected to vote on the measure Wednesday or Thursday.

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The White House
 • U.S. President George W. Bush
U.S. Office of Management and Budget
U.S. Congressional Budget Office

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