House passes $6 trillion spending cut plan

By Andrew Taylor

Associated Press

Published: Friday, April 15 2011 1:28 p.m. MDT

WASHINGTON — The House on Friday passed a Republican budget blueprint proposing to fundamentally overhaul Medicare and combat out-of-control budget deficits with sharp spending cuts on social safety net programs like food stamps and Medicaid.

The nonbinding plan lays out a fiscal vision cutting $6.2 trillion over the coming decade from the budget submitted by President Barack Obama. It passed 235-193 with every Democrat voting "no."

The vote sets up the Republicans' next round of confrontation with Obama and Democrats over the country's long-term deficit levels — a standoff likely to come to a head this summer and set the stage for 2012 elections. In an interview with The Associated Press earlier Friday, the president said the Republican's budget represents "a pessimistic vision."

"It's one that says that America can no longer do some of the big things that made us great, that made us the envy of the world," he said.

Acknowledging that spending cuts would have to be made, Obama said he's pushing for "a smart compromise that's serious."

Under the House Republican plan, deficits requiring the federal government to borrow more than 40 cents for every dollar it spends would be cut by the end of the decade to 8 cents of borrowing for every dollar spent.

The plan by Budget Committee Chairman Paul Ryan, R-Wis., a rising figure in the party, exposes Republicans to political risk. It proposes transforming Medicare from a program in which the government directly pays medical bills into a voucher-like system that subsidizes purchases of private insurance plans. People 55 and over would remain in the current system, but younger workers would receive subsidies that would steadily lose value over time.

The budget measure is nonbinding but lays out a vision to fundamentally reshape government benefit programs for the poor and elderly whose spiraling costs threaten to crowd out other spending and produce a crippling debt burden that could put a big drag on the economy in the future.

"Which future do you want your children to have? One, where the debt gets so large it crushes the economy and gives them a diminished future?" Ryan asked. "Or this budget ... that literally not only gets us on the way to balancing the budget but pays off our debt?"

The GOP's solution to unsustainable deficits is to relentlessly attack the spending side of the ledger while leaving Bush-era revenue levels intact. It calls for tax reform that would lower the top income tax rates for corporations and individuals by cleaning out a tax code cluttered with tax breaks and preferences, but parts company with Obama and the findings of a bipartisan deficit commission, who propose devoting about $100 billion a year in new revenues to easing the deficit.

Democrats and many budget experts say this spending-cuts-only approach is fundamentally unfair, targeting social safety net programs like Medicaid and food stamps while leaving in place a tax system they say bestows too many benefits on the wealthy.

"The Republican plan is not bold. It's just the same old tired formula we've seen before of providing big tax breaks to the very wealthy and powerful special interests at the expense of the rest of America," said top Budget panel Democrat Chris Van Hollen of Maryland. "Except this time it's dressed up with a lot of sweet-smelling talk of reform."

But Obama and Speaker John Boehner, R-Ohio, his chief GOP adversary, do agree on something: that an upcoming vote to increase the government's ability to borrow to pay its bills will have to contain spending cuts.

"Let me be clear: There will be no debt limit increase unless it is accompanied by meaningful spending cuts and budget reforms," Boehner said.

"I think (Boehner's) absolutely right that it's not going to happen without some spending cuts," Obama told the AP.

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