The Senate on Wednesday rejected a $140 billion taxes and spending package in a resounding defeat for President Obama and Democratic leaders that signaled the era of freewheeling stimulus spending is giving way to greater concern for deficits.
Hours later, chastened Democrats produced a pared-down version they said spent less and found offsetting tax increases to pay for most, though not all, of the new measure, which includes unemployment benefits and aid to states.
“There are fewer dollars involved here, and it is more paid-for,” said Finance Committee Chairman Max Baucus, Montana Democrat, acknowledging the 11 Democrats and one independent who sided with Republicans in blocking his first version. “We heard what those senators were saying and we have adjusted the amendment accordingly.”
Republicans said the vote – in which Democrats fell 15 votes shy of the 60 needed to allow for the overspending – marked a new attitude for lawmakers who are beginning to worry about debt and deficits as they prepare to face voters in November. It would have swelled the federal debt by $80 billion.
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