WASHINGTON — The Senate approved a far-reaching budget bill Thursday that would trim spending for Medicare, Medicaid and other domestic benefit programs and save $35 billion over five years.

The measure also would authorize oil and gas drilling in Alaska's Arctic National Wildlife Refuge.

The House, meanwhile, moved closer to a floor vote — probably next week — on a version of the budget bill that would cut $54 billion in federal spending over the next five years.

The differences between the two bills extend beyond dollars. The Senate's cuts would target mostly providers of federal benefits, such as pharmacies and drug companies; the House bill would trim the rolls of recipients, notably those receiving Medicaid benefits, food stamps and farm subsidies.

The vote in the Senate was 52 to 47, with all but two Democrats opposing the bill. Also, five Republicans voted against it.

The measure represents Congress' first big effort to cut spending since 1997.

"This shows we are serious about fiscal discipline," Senate Majority Leader Bill Frist (R-Tenn.) said.

The bill's passage was a victory for President Bush, whose administration has been buffeted by bad news and sagging approval ratings.

Bush has presided over an explosion of deficit spending, partly because of the Sept. 11 terrorist attacks. But recently, he has intensified efforts to clamp down on federal spending in response to conservative clamor to offset spending necessitated by Hurricane Katrina.

The Senate bill also includes Bush's favorite energy initiative — opening the Arctic refuge to energy exploration.

After the vote, Bush issued a statement praising the Senate for taking "an important step forward in cutting the deficit."

However, the White House strongly opposes a key provision of the bill that would cut funds for a program to encourage health insurers to participate in the new Medicare prescription benefit.

Administration officials want that provision deleted from the bill's final form. But whether Congress can pass a final version remains uncertain.

In the House, a number of moderate Republicans oppose some spending cuts their party leaders are pushing for, as well as the Arctic drilling provision and a measure to relax a decades-old federal ban on new offshore oil and gas drilling. California Gov. Arnold Schwarzenegger came out against the offshore drilling provision Thursday.

Adding to GOP leaders' problems, a group of conservative Democrats known as the "Blue Dogs" — to whom Republicans often turn on budget votes — called the House budget bill a "sham." They said they doubted Republicans were committed to deficit reduction considering that party leaders wanted more tax cuts.

As prepared by eight House committees and assembled Thursday by the chamber's Budget Committee, the House bill would also split the San Francisco-based U.S. 9th Circuit Court of Appeals in two, with California linked with Hawaii, Guam and the Northern Mariana Islands. The seven other states in the court would comprise a separate circuit.

The 9th Circuit has long been a target of conservatives who believe it is too liberal.

In the Senate, Democrats contended that the bill passed Thursday would actually increase the deficit in combination with $70 billion in tax cuts that Republicans hope Congress will approve.

In opposing the bill, Sen. Dianne Feinstein (D-Calif.) said the deficit reduction package was "not what it claims to be. Yes, it will cut spending by more than $30 billion, but in a few weeks these savings will be spent on tax breaks for the rich…. This fiscal strategy edges us closer to fiscal insanity and leaves our children and their children impoverished and riddled with debt."

Sen. Barbara Boxer (D-Calif.) also voted against the measure.

Robert L. Bixby, executive director of the Concord Coalition, which lobbies for balanced budgets, agreed that Thursday's victory in the Senate for deficit reduction could prove hollow.

"It makes no sense for Congress to bang heads over spending cuts and still wind up with a bigger deficit simply because they can't control their urge to cut taxes," he said. "It's like running around the block and then chowing down on a burger and fries."

Republicans defend the tax cuts as necessary to promote economic growth and create jobs. And they criticized the opposition to the Senate budget bill.

Senate Budget Committee Chairman Judd Gregg (R-N.H.) said: "We've heard a lot of moaning and groaning from the other side of the aisle about trying to reduce the deficit, and they make this misrepresentation, 'Well, when you tie it to tax relief, it isn't really deficit reduction.' This bill had no tax relief in it. This bill was a deficit reduction bill."

The two Democrats supporting the measure were Mary L. Landrieu of Louisiana and Ben Nelson of Nebraska. The five Republicans who opposed it were Lincoln Chafee of Rhode Island, Susan Collins of Maine, Olympia J. Snowe of Maine, Mike DeWine of Ohio and Norm Coleman of Minnesota.

A Democrat-led effort to strip the bill of the Arctic drilling provision was defeated 51 to 48.

Boxer and Feinstein were among those voting against the proposal.

Proponents deliberately attached the drilling measure to the budget bill because, by Senate rules, such measures cannot be filibustered. A minority has filibustered in the past to derail oil exploration in the refuge. But because the measure was in the budget bill, it simply needed a majority for approval, rather than the 60 votes needed to end a filibuster.

Drilling supporters contended that the tundra offered potentially one of the most significant petroleum fields in the nation — an estimated 10 billion barrels of oil, compared with U.S. daily consumption of 20 million barrels a day.

But one opponent, Sen. Maria Cantwell (D-Wash.), said that drilling in the refuge would "not solve our nation's energy problems and will do nothing to lower skyrocketing gas prices."

She termed the refuge, which is home to polar bears and caribou, "America's last great wild frontier."

Sen. Ted Stevens (R-Alaska) replied that the site was a "barren wasteland" in the winter, when drilling would occur — "no trees, no beauty at all."

Proponents of Arctic drilling still must overcome obstacles to see the proposal become law.

"The real battle is in the House," Sierra Club lobbyist Melinda Pierce said.

Drew McConville of the Wilderness Society added: "Arctic refuge drilling is just one of the major controversial issues that will continue to make this a very difficult, if not impossible, bill to pass through both houses."

Commentary:
I'll say it again. The democrats have to take over the government. The American people are simply not this dumb and since the GOP is abdicated power (and responsibility) the dems must take over. They should form a shadow government and run things until the next election. They should have filibustered this senate budget bill because the GOP inserted a non-budget item in the bill (arctic drilling). Since the GOP isn't following the rules, why should the democrats?