Laying down blunt budget markers for debt crisis

By Jim Kuhnhenn

Associated Press

Published: Tuesday, May 10 2011 12:00 a.m. MDT

Such cuts would require lawmakers to deal with spending in the government's biggest benefit programs, such as a Medicare and Medicaid. But Cantor and other top Republicans appeared to concede last week that overhauling those programs would be virtually impossible before the 2012 presidential and congressional elections.

A Republican budget plan passed by the House last month would change Medicare, the health care program for older adults, from direct government payments for medical bills to a voucher-like system. The change would affect future beneficiaries who are now 54 years old or younger.

Without Medicare or Medicaid on the negotiating table, the list of budget items facing trims is far more limited. The House Republican budget lists about $715 billion in non-Medicare and non-Medicaid cuts. They include spending reductions in farm subsidies, food stamps and changes in mortgage finance programs.

Democrats and the White House also want to consider increased revenues from taxes as part of the deficit reduction mix. But Boehner said that was one item that Republicans would not allow.

As the items on the negotiating table dwindled, Senate Finance Committee Chairman Max Baucus, also on the bargaining group negotiating with Biden, said Tuesday that he doesn't think Congress will address Social Security as part of an effort to reduce government borrowing.

The Montana Democrat said that Social Security has not added to the budget deficit, so it should not be included in a deficit reduction package. The massive retirement and disability program is projected to run out of money by 2037. At that point, payroll taxes would cover about 78 percent of benefits.

Associated Press writers Andrew Taylor, Jim Abrams and Stephen Ohlemacher contributed to this report.

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