The House and Senate approved a $2.9 trillion budget blueprint for fiscal year 2008 that would not include harsh cuts to Medicare and Medicaid.

Republicans criticized the proposal and said it would lead to an increase in taxes. The Bush administration threatened to veto any specific spending bills that exceeded the president’s budget request. Last year, Republicans, who were torn over spending cuts, failed to agree on a budget bill.

Also late last week, Bush rejected a second Iraq spending bill from the House of Representatives. The bill included some healthcare items, including one that would place a moratorium on a Medicaid rule. The rule, which will redefine “government” healthcare providers, is expected to cut about $5 billion from Medicaid.