March 27 (Bloomberg) -- President Barack Obama’s budget is headed for floor debate in the House and Senate next week after a pair of congressional committees wrapped up work on competing drafts of the plan.

The Senate Budget Committee voted 13 to 10 yesterday to approve a $3.53 trillion tax-and-spending package for the fiscal year beginning Oct. 1. The House Budget Committee backed a $3.55 trillion plan on March 25. The votes in both panels split along party lines, previewing what are likely to be partisan skirmishes over majority Democrats’ priorities.

Senate Majority Leader Harry Reid said he is open to financing an overhaul of the U.S. health-care system with revenue generated from efforts to rein in greenhouse gas emissions. Reid, a Nevada Democrat, told reporters yesterday Democrats are determined to finance the cost of any expansion of health care with savings found elsewhere in the government’s budget in order to avoid widening the federal deficit.

“I don’t think we should take anything off the table as to what we’re going to do with health care, what we’re going to do with this carbon that’s killing our country with global warming,” said Reid. “But the one thing that in our budget that’s very clear: We pay for everything.”

Obama’s $3.6 trillion budget request to Congress last month proposed spending $634 billion over the next 10 years to expand health care. It also projected that a proposal to cut greenhouse gases by auctioning off carbon dioxide emissions permits, a so- called cap-and-trade system, would generate $646 billion over the same period.

The budget plans approved by the House and Senate Budget Committees leave it to lawmakers to sort out later how to finance a health-care overhaul.

‘Different Claims’

Senate Finance Committee Chairman Max Baucus, a Montana Democrat, predicted “there will be lots of different claims” on revenue generated by any cap-and-trade system, and said he is focused on squeezing savings out of the health-care system. “There’s a lot of waste in our system” and “the goal is to drive down costs within the system so there is less need for revenue,” Baucus said.

Democrats in the two chambers disagree over “reconciliation” provisions included in the House budget plan that would keep Senate Republicans from blocking an overhaul of the health-care system, as well as a plan to eliminate federal subsidies for student loan providers.

The reconciliation procedure would allow Democrats, who control the Senate 58-41, to pass these measures with a simple majority instead of the 60 votes that otherwise would be needed.

‘Absolutely Essential’

House Speaker Nancy Pelosi, a California Democrat, said “it’s absolutely essential that we come out of this year with a substantial health-care reform,” and “the best prospect for that to happen is to do it under reconciliation.”

The Senate’s draft of the budget omits the reconciliation language. Senator Ben Nelson, a Nebraska Democrat, said he would vote against his party’s budget if it included the reconciliation procedure.

“That’s a deal-breaker,” Nelson said. “I don’t think it’s appropriate to determine the health-care delivery system, the changes that will be there, through the reconciliation process.”

The Senate budget plan would provide a 7 percent increase for domestic, non-defense “discretionary” programs while boosting the Pentagon’s budget by 4 percent, including funds for the wars in Iraq and Afghanistan. Senator John Cornyn, a Texas Republican, criticized the plan, saying the Defense Department increase wasn’t large enough.

“This president has made clear his commitment to pursue the conflict in Afghanistan,” Cornyn said. “Does anybody think that’s going to cost less money?”

Senate Budget Committee Chairman Kent Conrad, a North Dakota Democrat, defended the outline, saying the Pentagon received a “dramatic, huge increase over the last five years” while other domestic spending didn’t have such spending boosts.

To contact the reporters on this story: Brian Faler in Washington at bfaler@bloomberg.net

Last Updated: March 27, 2009 00:02 EDT