House Republicans again proposed controversial changes in Medicare and Medicaid, repeal of the new health law and a tax code overhaul in their yearly budget Tuesday. Their fiscal vision, mostly unchanged from recent years, draws a battle line for the coming debate over the federal borrowing limit.
The plan by Budget Committee chairman Paul Ryan, R-Wis., projects a surplus in 2023, in contrast with Democrats’ anticipated plans that do not propose a balanced budget in the future.
Though none of the proposed budgets is likely to become law, the contrasting plans will frame negotiations over raising the debt ceiling. Republicans have insisted in recent years that step must come with budget reforms.
Ryan proposes $4.6 trillion less in spending compared with current policy over the next decade, with no increased tax revenue.
Senate Democrats will introduce a plan this week that according to news reports is expected to include about $1 trillion in tax increases coupled with roughly $1 trillion in reduced spending, compared to current policy, in the next 10 years. They and President Barack Obama, who is set to release his overdue budget next month, say they want to stabilize deficits over the long term rather than set a date to balance the budget.
That is not good enough, said U.S. Rep. Tom Price, the Roswell Republican who is Budget Committee vice chairman. Price said major reforms are needed to the biggest drivers of the national debt.
“We’re hopeful that the president and Senate Democrats will recognize that in order to get this economy rolling again,” what are needed are “fundamental reforms in Medicare, Medicaid, Social Security and in pro-growth tax policy,” Price said. “Those are the kind of things that will be advantageous to reinvigorate our economy. Those are things that are necessary, we believe, to have any significant debt ceiling elevation.”
DeKalb County Democratic U.S. Rep. Hank Johnson said instead of balancing the budget, Congress should focus on stimulating the economy through government spending on bridges, teachers and other priorities. He called the Ryan budget “an audacious proposal that has no chance of passing” the Senate.
Budget frameworks lay out a broad vision for future tax and spending policy, while other bills fill in the details: Appropriations bills include the line-by-line program spending, while changes in the tax code will be hashed out in the Ways and Means Committee.
The GOP budget proposes major policy shifts. It includes changing Medicare, the health insurance program for seniors, to a voucher-like “premium support” system for future beneficiaries, letting them choose from a range of plans and subsidizing the cost. The budget also would grant states a set amount for Medicaid and allow states more flexibility in administering that health insurance program for the poor. It does not propose specific Social Security changes, instead asking Congress and the president for plans to stabilize the program’s trust fund.
The GOP budget aims to create just two marginal tax rate levels, 10 percent and 25 percent, while reducing the corporate tax rate to 25 percent. The tax change is meant to be “revenue-neutral,” meaning many deductions would be eliminated to bring down rates.
Republicans also propose repealing the 2010 Affordable Care Act, which in future years will provide new health insurance subsidies, though it keeps the law’s cuts to Medicare. Ryan said Tuesday those savings would be used to shore up Medicare rather than create a new program.
As Mitt Romney’s vice presidential nominee, Ryan campaigned on much of this vision but lost the race last year.
“The election didn’t go our way,” Ryan said. But “that means we surrender our principles? That means we stop believing what we believe in? We need to put up our vision. We think we owe the country a balanced budget. We think we owe the country solutions.”
Republicans have repeatedly criticized Senate Democrats for not passing a budget since 2009. In 2010 Democrats said they were awaiting the results of a bipartisan commission, then claimed that the 2011 bipartisan deal to raise the debt ceiling was effectively a budget because it imposed yearly spending caps.
This year Congress passed a bill requiring that each chamber pass a budget or members’ pay would be withheld. Senate Democrats will put out their version this week, but garnering 51 votes – budget resolutions cannot be filibustered – is not guaranteed with several of the 55 caucusing Democrats facing tough re-election fights.
“The Democratic plan will cut wasteful spending and reduce the deficit, close tax loopholes that benefit the rich and invest in what the economy needs to grow,” Senate Majority Leader Harry Reid, D-Nev., said in a floor speech Tuesday. He said the GOP budget represents “the same skewed priorities Americans rejected in November.”
Several of Georgia’s Republican members of Congress praised the budget, and near-unanimous GOP support is expected. Getting to that point took months of work behind the scenes.
Price and other influential conservatives in the caucus helped set it up in January, when in exchange for supporting a measure to push the debt limit to May they demanded a budget that balanced within 10 years. Previous Ryan budgets had not projected a surplus for decades, but the across-the-board program cuts known in Washington as sequestration combined with Jan. 1 tax increases in the “fiscal cliff” deal have made it easier: The budget deficit was $1.09 trillion last year, but the nonpartisan Congressional Budget Office expects it to be $845 billion this year.
A key change from last year’s GOP budget to make it balance sooner, Price said, was making federal employees contribute more to their pension funds, which Republicans contend brings the benefits more in line with those of private-sector workers.
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