President Bush seems to have House Speaker Nancy Pelosi and Senate Majority Leader Harry Reid in a full nelson.

Just a year after Democrats charged into power on Capitol Hill against a Republican president with bottom-scraping poll numbers and a soured war, it's the Democrats who are crying uncle in the biggest budget confrontation since the 1995 government shutdown.

Democrats do not want a repeat of that fight, which crippled the GOP revolution and revived Democrat Bill Clinton's presidency. Yet they seem astonished to find themselves on the defensive in a budget confrontation where Bush is asking for $200 billion to pay for the Iraq war, but promises to veto domestic spending bills that are $23 billion more than he wanted.

Democrats are struggling even to pass a middle-class tax cut under the banner of fiscal responsibility. A House plan to shield 21 million mainly Democratic households from the alternative minimum tax, and offset the lost revenue with higher taxes on Wall Street, appears to be unraveling. If it does, so does the vaunted "pay as you go" rule that Pelosi pledged would re-establish fiscal responsibility in Washington after years of rampant Republican borrowing. ...

Democrats are showing equal frustration on the alternative minimum tax. The alternative minimum tax was intended to ensure that the wealthiest taxpayers didn't evade all income taxes, but over time has hit more and more middle-income taxpayers in areas with high state and local taxes, such as California and New York.

Before leaving town for the holiday recess, Senate Republicans rejected a compromise Senate Democrats floated that would have made it easier to comply with the "pay-as-you-go" budget rule. The "paygo" rule is the chief claim Democrats have to restoring fiscal responsibility to government. It is vital to conservative House Democrats, many of whom captured Republican seats last fall that tagged them with the nickname "majority-makers."

"It's been a tough year on the budget, but Democrats have stuck to paygo, and there have been a lot of initiatives that were pushed back because people came to the leadership and said, 'This is what I want to do and I have no plan to pay for it,' and leadership said, 'We're not going forward with that,' " said Maya MacGuineas, director of the fiscal policy program at the moderate New America Foundation. "But it looks like it's all going to break down" on the alternative minimum tax.

"The real test is having paygo mean you have to make hard choices," MacGuineas said, "when it's a popular and expensive bill, which is exactly what the (alternative minimum tax) is. And now it looks like it won't be fully paid for." ...

For the complete article, please follow this link. Maya MacGuineas is president of the Committee for a Responsible Federal Budget.