Senate and House Democrats avoided a confrontation Wednesday with the Bush Administration over a half-trillion-dollar domestic spending bill.  Dems had wanted an additional $22 billion in funding for social programs, but conceded to the President's desired spending limit with the caveat that they would reallocate funding to ensure their priorities were met. 

The Hill correctly points out: 
The Democrats’ capitulation Wednesday on the total domestic spending level is the latest instance of Bush prevailing on a major policy showdown.  Bush and his Senate Republican allies have repeatedly beat back efforts by Democrats to place restrictions on funding for the war in Iraq as well as Democratic attempts to expand funding of children’s health insurance by $35 billion. 

Democrats sit in a difficult position.  Without the numbers to override a Presidential veto in the House - a power Bush seems to have finally discovered this year - the Dems are forced to compromise their legislation or abandon it and start from scratch.  Doing either portrays them as ineffective, a depiction no party member wants heading into the 2008 Presidential Election. 

But what about their campaign promised to curb wasteful spending, balance the budget, and limit earmarks?  It seems the usual politics have prevailed: 

Democratic leaders said Wednesday that they would keep total spending at the strict $933 billion limit set by the White House. House Speaker Nancy Pelosi (D-Calif.) also abandoned a proposal she supported Tuesday to eliminate lawmakers’ earmarks from spending bills after she faced stiff opposition from powerful fellow Democrats.  

Pelosi told the Democratic chairmen of the House Appropriations subcommittees, the so-called cardinals, that earmarks would stay in the omnibus and that Democratic leaders would accede to cut spending to levels demanded by Bush to save 11 spending bills from a veto, said sources familiar with a meeting that took place in Pelosi’s office early Wednesday morning.  --The Hill