House GOP Unveils Budget Plan

WASHINGTON (AP) — Conservative House Republicans on Tuesday set up what appears to be a potential re-run of last year’s turbulent domestic policy fight with President Barack Obama, putting forward an election-year budget manifesto that would blend steep social program cuts with reduced tax rates.

The GOP plan released by House Budget Committee Chairman Paul Ryan would, if enacted into law, wrestle the deficit to a manageable size in short order, but only by cutting Medicaid, food stamps, Pell Grants and a host of other programs that Obama has promised to protect.

To deal with the influx of retiring Baby Boomers, the GOP budget reprises a controversial approach to overhauling Medicare that would switch the program — for those under 55 today — from a traditional “fee for service” framework in which the government pays doctor and hospital bills to a voucherlike “premium support” approach in which the government subsidizes purchases of health insurance.

Republicans say the new approach forces competition upon a wasteful health care system, lowering cost increases and giving senior more options. But Democratic opponents of the idea say the new system — designed by Ryan and liberal Sen. Ron Wyden of Oregon — cuts costs too steeply and would provide the elderly with a steadily shrinking menu of options and higher out-of-pocket costs.

“If you want to save Medicare and keep it from going bankrupt, you must reform the program, and that’s what we intend to do,” countered Ryan, R-Wis.s

Even as Ryan was describing his plan to reporters, it became election-year fodder for both parties.

“The House budget once again fails the test of balance, fairness, and shared responsibility,” White House Communications Director Dan Pfeiffer said in a written statement charging that the GOP proposal would dole out tax cuts to rich while protecting tax breaks for oil companies and hedge fund managers.

“What’s worse is that all of these tax breaks would be paid for by undermining Medicare and the very things we need to grow our economy and the middle class — things like education, basic research, and new sources of energy,” Pfeiffer said.

House Speaker John Boehner, R-Ohio, predicted strong support for Ryan’s budget. He also defended Ryan’s proposal to cut agency spending below an amount that both parties agreed to in last year’s compromise that extended the government’s authority to borrow money.

“We all know that we’ve got a real fiscal problem here in Washington, and frankly we think we can do better,” Boehner told reporters.

This year’s GOP measure would produce deficit estimates that are significantly lower than a comparable measure passed by the House a year ago, claiming deficit cuts totaling $3.3 trillion — spending cuts of $5.3 trillion tempered by $2 trillion in lower taxes — below Obama over the coming decade. The deficit in 2015, for example, would drop to about $300 billion from $1.2 trillion for the current budget year. Last year’s GOP draft called for a 2015 deficit more than $100 billion higher.

The measure would cut spending from $3.6 trillion this year to the $3.5 trillion range in 2013 and freeze it at that level for two more years.

The GOP plan doesn’t have a chance of passing into law this year but stands in sharp contrast to the budget released by Obama last month, which relied on tax increases on the wealthy but mostly left alone key benefit programs like Medicare.

The resulting political battle is sure to spill beyond the Capital Beltway into the presidential race and contests for control of the House and Senate this fall.

“The president and his party are ignoring this problem and if we have a debt crisis the people who are getting hurt first and the worst are the poor and the elderly,” Ryan said Tuesday. “We are sharpening the contrast between the path we are proposing and the path of debt and decline that the president has placed us upon.”

The Budget panel is slated to debate and vote on the measure Wednesday in hopes of a vote by the full House next week.