By Richard Cowan WASHINGTON, May 17 (Reuters) - The U.S. House of Representatives on Thursday approved a $2.9 trillion fiscal 2008 budget that funds President George W. Bush's huge defense buildup while also adding money for Democrats' domestic priorities. On a mostly partisan 214-209 vote, the House approved next year's fiscal blueprint, which claims to end chronic budget deficits and produce a $41 billion surplus in 2012. The budget provides for some of that surplus to be spent on renewing popular middle-class tax cuts. Republican opponents complained about the approximately $23 billion in added domestic funding next year, mostly for veterans, children and education, that Bush did not request. They also said the Democratic-written budget would result in large tax increases if Bush's tax cuts are allowed to expire at the end of 2010. The budget approved on Thursday was a compromise version of a resolution passed by the House in March. The Senate was expected to vote soon on an identical compromise. Included in the budget is a 10.5 percent increase in the regular Pentagon budget and full war funding that Bush requested for combat in Iraq and Afghanistan next year. "This budget moves us to balance over the next five years. Along the way it posts smaller deficits than the president's budget," said Democratic Rep. John Spratt of South Carolina, the chairman of the House Budget Committee. He added the plan "does more for veterans' health care, more for children's health care and more for education." Republicans sketched out a different picture. "What this budget says is tax more and spend more," said Rep. Paul Ryan of Wisconsin, the senior Republican on the House Budget Committee. The budget plan does not attempt to fix the spiraling costs of federal retirement and health care programs, a problem that will become particularly acute in a decade or so as more "baby boomers" reach retirement age. Democrats say separate bipartisan negotiations would have to tackle that problem. The budget plan is non-binding legislation that is not sent to the president for his signature. But it provides Congress with directions on the overall size of government programs in the fiscal year starting Oct. 1, which will be funded later in the year through a series of appropriations bills. On May 11, White House budget director Rob Portman warned Congress that he would recommend vetoes of spending bills that exceed Bush's spending request.
