A congressional panel has scrapped President Bush's proposed budget cuts for hospitals and other Medicare providers, but preserved the president's plan to slash spending levels.

By a 22-17 margin, the House Budget Committee approved a $2.8 trillion plan, eliminating cuts to such health-care programs as Medicare and Medicaid.

The measure also endorses the president's plan for a 7 percent increase in next year's core defense budget -- exclusive of the Iraq war. That boost would be subsidized in part by cuts to select domestic programs.

As predicted, the measure came under fire from Democrats who pointed out the plan would result in a deficit approaching $350 billion in 2007, a figure that would mount to $1 trillion by 2011.

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