The measure is a nonbinding spending blueprint that Obama does not need to sign. It sets the spending levels that appropriations committees must observe. Its provisions -- and omissions -- point to areas where Obama faces a tough sell.
One of the most important questions that the budget sidestepped has to do with how Congress will cover the cost of making health insurance available to more Americans and of overhauling the healthcare system.
Obama had proposed covering part of the cost by imposing a 28% cap on the value of tax deductions -- including write-offs for charitable donations and home mortgage interest -- for families earning more than $250,000 a year.
That idea has been bitterly opposed by two of the most powerful lobbies in Washington, the home-building industry and the charitable nonprofit sector. They fear that the wealthy will invest less in real estate and donate less to charities if Congress reduces the tax benefit.
Obama has defended the proposal as a matter of equity: Under current law, tax deductions are worth less to middle-class taxpayers than they are to wealthier people. For example, a middle-class bus driver gets only a 28% write-off for a $100 donation; someone in the upper income brackets gets 33% or more for the same donation.
Nonetheless, Obama's proposal is destined to fail, said Roberton Williams, a fellow at the nonpartisan Tax Policy Center. "It sets up two groups to be the fall guys, and that mobilizes two fairly strong lobbies," he said.
Meanwhile, middle-class voters face the prospect of losing Obama's "Making Work Pay" tax credit -- of as much as $400 for individuals and $800 for couples -- after 2010.
The budget resolution did not make room for a longer extension of the tax break. Democrats said they had to impose that limit, at least for now, in deference to the worsening budget outlook.
But two other powerful constituencies, agribusiness and military veterans, were not asked to make such a sacrifice.
The congressional budget did not incorporate Obama's proposal to cut off subsidies to farms with sales exceeding $500,000 a year, a move that bowed to the agriculture lobby and influential rural lawmakers, including the Senate Budget Committee's Conrad.
Veterans protested a proposal floated by the administration that would have allowed the government to bill private health insurance companies for treatment of service-related injuries. Obama retreated.
