Democrats lose key test on spending

The Senate on Wednesday rejected a $140 billion tax cuts and spending package in a resounding defeat for President Obama and Democratic leaders, sending a signal deficits are starting to take priority over new stimulus spending on Capitol Hill.

Democrats marshaled just 45 votes to waive budget rules and push the package through — falling 15 votes short of the 60 they needed. They will now have to regroup after 12 members of their caucus defected and joined with Republicans.

“We’re trying to get some fiscal discipline around here,” said Sen. Judd Gregg, New Hampshire Republican, who forced the showdown vote.

Democrats had pleaded to let the spending go forward, and Senate Finance Committee Chairman Max Baucus, Montana Democrat, ticked off a list of programs that would benefit from the spending: summer jobs, small businesses and aid for companies struggling to meet pension fund obligations.

“This vote is about jobs, plainly, simply,” Mr. Baucus said.

This past weekend Mr. Obama sent a letter to Congress calling for passage of many of the elements in the bill, saying it is essential to an economic recovery.

But the price tag was too high for a majority of the Senate, which just a few months ago passed a smaller version of the bill.

Even before the vote was finished, Democratic leaders huddled on the floor to try to plot their strategy forward. They’ll have to jettison some of the planned spending and hope a more modest bill attracts enough support to survive another budget challenge. But the drubbing on Wednesday’s vote shows the gap they’ll have to close.

Among the options are paring down funding for doctors who take Medicare patients and cutting funds to state Medicaid programs.

Still to come is another vote, likely Thursday, on an amendment to freeze federal employees’ salaries and cut 5 percent of all discretionary spending, save for the Defense and Veterans Affairs departments. That amendment will also need 60 votes to succeed.