April 5, 2011

Ryan Offers GOP's Long-Term Budget Plan; Talks on Govt. Shutdown Falter

Budget would cut spending by $5.8 trillion over 10 years, as fiscal-year budget talks fall apart

As federal budget talks on Tuesday showed little sign of averting a government shutdown this weekend, the Republican chairman of the U.S. House Budget Committee presented a budget that would cut $5.8 trillion in spending over 10 years.

Democratic leaders responded negatively to the long-term budget proposal, and both sides blamed each other for a failure to negotiate on a spending budget for the fiscal year that would avoid a shutdown.

The Republican budget proposal, presented Tuesday by U.S. House Budget Committee Chairman Paul Ryan (R-Wis.), would reduce deficits by $4.4 trillion over the next decade. The plan would end the country’s “spending-driven debt crisis” by lowering tax rates to a top rate of 25% from 35% for individuals and companies, privatizing Medicare options for younger workers who haven’t yet reached eligibility and reforming Social Security by requiring a planned balancing of the program when it is no longer sustainable

“The deeper the hole we dig, the longer the delay” in saving America’s ecnomy, said Ryan during comments at a press conference held by the American Enterprise Institute for Public Policy Research. “We are on a debt-crisis path.”

In response to the Republican plan, Rep. Chris Van Hollen (D-Md.), ranking member on the House Budget Committee, accused the proposed budget of failing to address both spending and revenue.

“It is now clear that the Republican budget is not bold, but the same old ideological agenda that extends tax breaks to millionaires and big oil companies while cutting our kids’ education and health security for seniors,” Van Hollen said in a statement. “It is increasingly clear that the House Republicans are more committed to continuing tax breaks to millionaires and big corporate special interests than they are to a serious, balanced approach to reducing deficits.”

Ryan countered during the press conference that the budget proposed by President Obama and congressional Democrats does nothing more than “kick the can down the road.” The Republican plan would save social programs by engaging in budget reform now rather than later, when the crisis reaches European proportions, he said.

Responding to his opponents’ claims that his plan will result in more for the wealthy while poor seniors are reduced to clipping coupons to get healthcare, Ryan said that Democrats are using budget reform as a political weapon, resorting to “distortions and demagoguery to score political points.”

Meanwhile, congressional leaders met Tuesday morning with Obama at the White House as federal officials took steps to prepare for an orderly shutdown of many government services if the weekend shutdown comes to pass.

“The White House has increased the likelihood of a shutdown,” said House Majority Leader Eric Cantor (R-Va.) at a news conference as House Speaker John Boehner headed to the White House.

Democrats, on the other hand, accused Republicans of being at fault if the nation’s operations come to a standstill.

“A compromise on the budget is right there for the taking, assuming the Speaker still wants one,” said Sen. Charles Schumer (D-N.Y.) in a statement. “We take it for granted that because of the intense political pressure being applied by the Tea Party, the Speaker needs to play an outside game as well as an inside game.”

Since last week, Schumer charged, the two sides have made steady progress on a package of $33 billion in cuts.

“This is an historic level of spending cuts, it is the halfway mark between the two sides, and the Speaker has already agreed to this number privately,” Schumer said. “At this point, we are so far down the road towards an agreement, and so little time remains before Friday’s deadline, that it would be a dramatic about-face for the Speaker to suddenly let things devolve into a shutdown, as many in the Tea Party are urging.”

Read more about Rep. Ryan’s Republican budget proposal that cuts trillions of dollars from government spending at AdvisorOne.com.

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