Published April 15, 2011
WASHINGTON -- On a party-line vote, the House of Representatives passed a Republican 2012 budget proposal which aims to start the country down the path of deficit reduction, but which Democrats warn will gut a vital safety net for seniors.
The House voted 235-193 to approve the plan by Rep. Paul Ryan, R-Wis., chairman of the House Budget Committee, though its future beyond that is uncertain. Still, Republicans say the country is on the precipice and they have no other choice but to start slashing trillions in future spending.
"The greatest danger that America faces today is doing nothing," House Speaker John Boehner said Friday before a vote on the RSC plan and a Democratic alternative.
The Ryan plan "is the strongest step we could take today, and we are going to take it," Boehner said.
Ryan's budget aims to cut $6.2 trillion in spending over 10 years, and reduce the deficit by more than $4 trillion. With $14 trillion in debt already on the books, government spending on the course it stands now aims to add another $6.7 trillion in debt over 10 years.
But with a fundamental restructuring of Medicare and Medicaid, Democrats, including President Obama, blasted it as an attempt to leave seniors and poor holding the bag on health care costs.
"The president agrees with House Republicans that we must reduce our deficit and put our country on a fiscally sound path, but we disagree with their approach," Obama Press Secretary Jay Carney said after the vote." The House Republican plan places the burden of debt reduction on those who can least afford it, ends Medicare as we know it and doubles health care costs for seniors in order to pay for more than a trillion dollars in tax cuts for millionaires and billionaires."
Republicans argue that their effort is an attempt to "preempt austerity" that will come by following the current budget route.
"The changes being proposed would not affect one senior citizen in America, not one, because Paul's made it clear than anyone 55 and over would not see changes," Boehner said.
According to Ryan's plan, Medicare payments would no longer be paid by government sending out checks for medical bills, but would let people under age 55 choose among private insurance plans that the government would then supplement. People 55 and over would remain in the current system, but younger workers would receive subsidies that would steadily lose value over time. Ryan says those who can pay more will have to do so while lower income Americans will still be covered.
Democrats say the plan essentially privatizes Medicare and leaves seniors having to pay for costs that will continue to go upward.
"They end the Medicare guarantee," said top Budget Committee Democrat Chris Van Hollen of Maryland. "They force seniors to leave the Medicare program and go into the private insurance market where costs continue to rise day in and day out."
"Spin can't change the fact that (the) Republicans' plan reopens the doughnut hole, costing seniors more than $2 billion next year alone," said Jon Summers, spokesman for Senate Majority Leader Harry Reid, D-Nev. "No matter what they say, the fact is the GOP wants to finance their tax breaks for millionaires and billionaires by hiking prescription drug prices for seniors."
The House began debate on the measure Thursday with a vote on a Congressional Black Caucus alternative that failed 303-103. Other failed votes included a Congressional Progressive Caucus plan and a Democratic substitute raising taxes on households that earn more than $250,000. That was defeated 166-259.
At one point in the voting, the House barely knocked back a more conservative budget proposed by the Republican Study Committee, after Democrats tried their best to get it passed as a means of killing the Ryan plan.
The study group's 2012 budget called for freezing spending at 2008 levels and balancing the budget by 2020. It is a more stringent proposal for spending than the Ryan 2012 budget, which aims to chop more than $6.2 trillion in spending over 10 years.
Republican were divided on which plan to support, and that gave Democrats the opportunity to jump in and try to bury the Ryan plan by having 172 Democrats vote present. That left the final tally 119-136, meaning if just eight more Republicans supported the RSC plan, Ryan's proposal would have been history and the RSC plan would have been adopted.
The effort failed, and a vote was to proceed on the plan by Ryan, R-Wis., chairman of the House Budget Committee.
The GOP plan isn't actual legislation, but a resolution that meets the requirements of the Congressional Budget Act, which requires Congress to come up with a blueprint by April 15 each year to pay for government. There's no penalty on Congress for failing to act, a decision made by Democrats last year that led to Congress passing the fiscal year 2011 budget on Thursday.
Lawmakers are now looking to the next fiscal year, which begins Oct. 1.
On the Senate side, no budget blueprint has been proposed yet. Budget Committee Chairman Kent Conrad, D-N.D., and five other members of President Obama's fiscal commission who form a "Gang of Six" have been looking for a compromise to cut spending by about $4 trillion over 10 years.
"You got three senators on each side, all of them diverse, that recognize the problem," said Sen. Tom Coburn, R-Okla., a member of the Gang of Six. "And we've all been willing to take the heat that's coming with this because everybody -- you know, if we come up with a plan that everybody hates, it's going to be a great plan because that means we will have gored everybody's ox in terms of getting out of this problem."
Coburn said no deal will work, however, unless Washington is willing to touch Medicare, Medicaid and Social Security. The three entitlement programs take up more than 40 percent of the government's expenses. The federal government now is responsible for more than 20 percent of the nation's gross domestic product.
Speaking to supporters at a Democratic fundraiser in Chicago Thursday night -- a day after giving a speech that revises his budget outlook, but offers no new budget proposal -- Obama acknowledged that if the government doesn't deal with the causes of long-term debt, "all the issues we care about we're not going to be able to solve."
Carney said Friday that any effort to bring down the debt will require cooperation.
"Though our approaches differ, our goal remains the same," he said.
Ryan's 10-year plan still can't claim a balanced budget by the end of the decade, but Ryan says eventually annual deficits will fall to the $400 billion range -- from the current $1.6 trillion range reached in the past two years. That's enough to stabilize the nation's finances and prevent a European-style debt crisis that could force far harsher steps, Ryan said.
The Associated Press contributed to this report.