The news comes a week after Spratt was named a member of the White House deficit reduction commission.

The reconciliation bill, which will be the vehicle for the health care “fixes” the Democrats will add later this week, passed through the panel on a 21-16 vote. Two Democrats, Reps. Allen Boyd (Fla.) and Chet Edwards (Tex.), joined every Republican in opposing the measure. The process is starting in the House because, by law, any legislation that raises revenues (i.e., imposes taxes) must originate in the lower chamber.

The proposal now moves to the House Rules Committee, where Democrats are expected to attach the health reform language later this week before moving the package to the chamber floor. Democratic leaders have been mostly tight-lipped about the specifics of the health reform fixes, largely because they’re still waiting for the official cost estimates to come back from the Congressional Budget Office.

At least as controversial as the Democrats’ plan to go the reconciliation route has been their strategy, announced today, to pass the reconciliation bill alone, and then use an obscure rule to “deem” the larger Senate bill to be passed as well. Still, even Rep. David Dreier (Calif.), senior Republican on the Rules panel, conceded today that, if the Democrats can rally the votes behind the reconciliation bill, there’s nothing that GOP leaders can do to block the deeming strategy.

Breaking from previous administrations, Obama’s budget acknowledged that fighting the wars in Iraq and Afghanistan will actually cost money; it conceded that big pay cuts for doctors treating Medicare patients would never be realized; it admitted that tens-of-billions of dollars in revenues generated by the alternative minimum tax would never be collected because Congress steps in each year to prevent millions of middle class families from paying the tax. (This year, the AMT patch arrived in the stimulus bill — at a cost of $70 billion. All of it borrowed.) And, rather than projecting the figures out for only five years (like President George W. Bush made a habit of doing), Obama’s budget looked 10 years ahead, to lend a better picture of the fiscal imbalances that loom further down the road.

Leave it to Congress to bring some of those gimmicks back.

Both Senate Budget Committee Chairman Kent Conrad (D-N.D.) and House Budget Committee Chairman John Spratt (D-S.C.) this week are considering spending proposals of their own, rife with some of the very tallying dishonesties that have plagued the past. An editorial in The Washington Post today has a concise rundown.

The congressional budgets, The Post points out, look ahead only five years. They eliminate $250 billion included in Obama’s budget for more Wall Street bailouts, though the lawmakers “have no reason to believe it won’t be needed.” And Spratt acknowledges only one year of funding for the AMT patch — not the required five — while Conrad includes only three years of AMT money.  The Post offers an explanation:

There’s no mystery as to the motivation for this dishonesty. Like Mr. Obama, the Democrats in Congress want to spend more on education, energy and other popular programs. Like Mr. Obama, they don’t want to level with voters about the need to pay for such programs through increased taxes. According to the CBO, Mr. Obama’s budget plan would have the government spending more than 23 percent of gross domestic product throughout the second half of this decade while collecting less than 19 percent in revenue. Rather than fix this problem, Mr. Conrad in his budget proposal closes his eyes and wishes it away.

Last month, Conrad said Obama’s plan “is a more accurate reflection” of federal spending than past budgets, and he went after GOP critics for “things that the other side is not counting at all,” pointing specifically to the AMT patch.

Conrad also gave a curious answer when asked specifically if the AMT fix should be offset:

I believe extending the alternative minimum tax past the next couple of years should be offset. And I have taken that position consistently.  I don’t think it should be offset at this time of severe economic weakness.  I think that would be counterproductive. But beyond the next couple of years, when we are now seeing forecasts from CBO and OMB of economic recovery, at that point, I think it should be offset.

Instead he did just the opposite, funding the AMT for three years before abandoning it later.

Both the House and Senate budget panels have plans to pass their proposals out of committee today, with the full chambers expected to consider them next week.

Experts have pointed out that real change in Washington comes only in times of severe crisis. At least as it pertains to budgets, it seems that the current crisis isn’t severe enough yet.

Ben Bernanke (WDCpix)

Democratic leaders, who hope to inject billions more borrowed dollars into the economy before the end of the year, got a little boost from the chairman of the Federal Reserve on Monday.

Appearing before the House Budget Committee, Fed Chairman Ben Bernanke emphasized the importance of the recently enacted $700-billion Wall Street bailout, but he endorsed additional steps to help the ailing economy.

“Given the uncertainties about the near term, and the risk that still exists,” Bernanke said, “I think that it is appropriate for Congress to be thinking about a fiscal program.”

Illustration by: Matt Mahurin

Bernanke was careful, however, not to endorse any specific plan, saying only that “the size and the composition of that are, obviously, items for the Congress to determine.” Asked to assign a dollar figure, the Fed chief declined. “It should be significant,” he said, “but I can’t give you a number.”

Last month, House Democrats passed a $58-billion proposal designed to create jobs and stimulate consumer spending, but Senate Republicans — lining up behind a White House veto threat — blocked the measure. Democratic leaders, hoping to return to the issue next month, were quick to grab Bernanke’s comments as ammunition in the partisan debate.

“I urge President Bush and congressional Republicans to work with Democrats to make a targeted, fiscally-responsible recovery a reality,” House Majority Leader Steny Hoyer (D-Md.) said in a statement.

The Democrats’ stimulus strategy would expand benefits to the unemployed, help states with health-care and other costs and pump billions into the country’s ailing infrastructure. Many economists have endorsed those steps, saying they would do for Main Street what the bailout package did for Wall Street. New funding for food stamps and low-income heating programs, for example, “gets money in the hands of the people who are most likely to spend it immediately,” said Heidi Shierholz, an economist at the Economic Policy Institute, a liberal policy group.

But the White House has opposed the House plan, maintaining it would lead to billions of dollars in “self-perpetuating entitlement spending.”

The White House spokeswoman Dana Perino told reporters, after Bernanke’s testimony Monday, that the administration still opposes the House strategy, but would consider other stimulus options. “We’re continuing to have conversations with members of Congress,” Perino said, “and we’re open to ideas that they would put forward.”

The size of the Democrats’ intervention plan seems to grow by the day. A few weeks after the House passed its $58 billion proposal, House Speaker Nancy Pelosi (D-Calif.) floated the idea that $150 billion would be needed. By last week, that figure had jumped to $300 billion.

Many economists say the larger figure is appropriate. Dean Baker, co-director of the Center for Economic and Policy Research, said that, since the start of the housing slump, the country has lost $5 trillion in housing wealth — a decline resulting in roughly $300 billion in annual consumption. “The reason that people were spending was that they had the wealth,” Baker said.

Both Baker and Shierholz support a package of at least $300 billion.

Bernanke, even in supporting a new federal intervention, was quick to warn lawmakers that they must weigh its short-term benefits versus the long-term costs. The Treasury is already $168 billion in the hole from another stimulus bill passed earlier in the year. That strategy — which gave every taxpayer a $600 cash refund — is widely credited with buoying retail sales for a few months. But it failed to prevent the larger decline in consumer spending due to the evaporation of home equity.

Much of the success of a second stimulus package, Bernanke said, would hinge on how targeted — and how immediate — the reforms are. New infrastructure projects, for example, tend to take years to develop, he warned, meaning the stimulating effects might arrive too late to do the economy much short-term good.

“If it’s well invested, that’s a very good thing for the economy,” he said. “The question really turns on how much extra spending and employment will you get from infrastructure projects that you would not otherwise have had.”

Targeting states, Bernanke added, is a safer short-term bet — particularly if the new spending prevents cuts in state services or restores programs already slashed. He cautioned, though, against “compensating [states] for past spending or putting money in the rainy-day fund, because that doesn’t help the current situation.”

Not everyone has jumped on the stimulus bandwagon. House Republicans continue to blast the Democrats’ stimulus plan as an expansion of government at the expense of taxpayers. “We should not be under any illusion that this stimulus package will address the core problems of our current financial crisis and economic weakness,” Rep. Paul Ryan (R-Wis.), ranking member of the House Budget Committee, said during Monday’s hearing.

Jagadeesh Gokhale, an economist at the libertarian Cato Institute, warned of a broader trend, arguing that the uncertainty created by sporadic government interventions does more economic harm than good. “Policy stability,” Gokhale said, “is much better than short-term shots in the arm.”

Meanwhile, Bernanke declined to say whether the country is in a recession, arguing that it’s merely a technical term tossed around by academics.

“We are in a serious slowdown in the economy, which has very significant consequences for the public,” he said. “Whether it’s called a recession or not is of no consequence.”