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Bush, Democrats spar on spending, taxes

Story Highlights

NEW: Anti-war protesters disrupt Democratic press conference
• Bush says budget can be balanced by 2012
• President requests line-item veto power
• Democrat-controlled Congress takes office on Thursday
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WASHINGTON (CNN) -- President Bush and Democratic leaders in Congress traded jabs over the budget Wednesday in what could be an indication of partisan fights to come.

In a White House statement and Wall Street Journal opinion piece Wednesday, the president asked lawmakers to give the White House line-item veto power to control spending.

As he prepares to deal with a Congress controlled by Democrats for the first time, Bush is also asking lawmakers to extend tax cuts.

"We've got to make sure we spend the people's money wisely," the president said in a Rose Garden statement. (Watch Bush declare what he sees as the 'most urgent needs of our nation' Video)

The White House and Congress need to "keep this economy growing by making tax relief permanent," Bush said.

Democrats were immediately circumspect. (Interactive: Democrats' priorities)

"I know people don't like to pay taxes, but the fact of the matter is, is that this administration has produced a record deficit that is really threatening in long measure our ability to make the kind of investments we need to keep America safe," Sen. Mary Landrieu, D-Louisiana, said in a Fox News interview.

"We hope that when the president says 'compromise,' it means more than 'do it my way,' which is what he's meant in the past," Sen. Charles Schumer, D-New York, said in a statement.

The line-item veto would allow the president to cut specific spending from legislation without vetoing the entire bill.

Previous presidents have also asked for line-item veto authority, but Congress has been unwilling to grant it, fearing that it would infringe on legislative power.

Congress granted President Clinton a form of the line-item veto, but the Supreme Court struck it down, saying it violated the Constitution's separation of powers.

In the opinion piece, Bush warned that the Democrat-controlled Congress risks stalemate if it resorts to "politics as usual" and tries to "pass bills that are simply political statements."

"It's time to set aside politics and focus on the future," he said in the statement. "I'm hopeful that Republicans and Democrats can find common ground to serve our folks, to do our jobs, to be constructive for our country."

The new Congress takes office on Thursday. The 110th Congress will be the first time Democrats have controlled the House and the Senate in 12 years. (Watch what poll finds about expectations of new Congress Video)

In February, Bush will submit a proposal to balance the federal budget by 2012, he said Wednesday.

The plan will make defense against terrorism a budget priority while preserving tax cuts that Bush said have led to an improving economy.

Lawmakers must then tackle entitlement programs, Bush said.

"We need to reform Social Security and Medicare and Medicaid so future generations of Americans can benefit from these vital programs without bankrupting our country," he said.

Line-item veto power would be a key tool in entitlement reform, Bush said, because money that could be used there is now wasted in a "secretive process" that often doesn't ever face a vote in Congress.

But incoming House Majority Leader Steny Hoyer, D-Maryland, said the line-item veto puts too much power in the hands of the president and cuts the ability of members of Congress to deliver for their constituents.

"Every president would like to say to the Congress only the president can add to the investments in communities, so that Congress would have to come hat in hand to the president to ask for investment" in their home districts, Hoyer said.

The president's remarks in the Rose Garden came after his first meeting of the year with his Cabinet, whose members flanked Bush as he spoke.

On Wednesday evening, Bush has scheduled a White House reception for leaders of both parties during which he will hold "informal discussions about the year ahead," administration officials said.

A new plan for Iraq is expected to be discussed, but Bush is not expected to tell the American people about his new war strategy until next week. (Full story)

In Wednesday's article, he reiterated his position that U.S. forces must stay in Iraq until the attacks by insurgents end.

"We now have the opportunity to build a bipartisan consensus to fight and win the war," he wrote.

A new poll conducted by Opinion Research Corp. for CNN found 77 percent of the 1,019 adults surveyed said they want to see "significant changes" in U.S. policy in Iraq.

The poll also found strong support for the Democrats' legislative priorities: 87 percent of those polled favor allowing the government to negotiate lower prescription drug prices for senior citizens, 85 percent favor raising the minimum wage, 84 percent favor cutting interest rates on student loans, and 79 percent favor creating an independent panel to oversee ethics in Congress.

The poll had a margin of error of plus or minus 3 percentage points.

Bush said that he has been encouraged by the productive meetings with the new Democratic leadership.

Protest silences Democrats

Democrats had hoped to present the Democratic takeover of Congress as a well-oiled machine. However, Rep. Rahm Emanuel of Illinois, Democratic Caucus chairman, had to abruptly end a news conference meant to showcase the Democratic ethics legislation when anti-war protesters started chants demanding that the Democrats stop funding the war in Iraq.

"We're here to let the Democrats know that the grass roots and the anti-war movement elected them to create change," said Cindy Sheehan, whose son was killed in Iraq, after Emanuel ended the news conference.

Sheehan said she and 70 other protesters intended to hold the Democrats "accountable" and wanted the Democratic leadership to stop authorizing additional funds for the Iraq war.

She said continued funding would make the Democrats "co-conspirators" with the Republicans in what she called "war crimes."

"There is already enough money in their killing budget to bring the troops home," Sheehan said.

CNN's Lisa Goddard contributed to this report.

"We've got to make sure we spend the people's money wisely," President Bush said Wednesday at the White House.



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