House kicks off budget debate

By Andrew Taylor

Associated Press

Published: Wednesday, March 28 2012 12:00 a.m. MDT

WASHINGTON — The House took up a stringent GOP budget plan Wednesday that blends big cuts to safety-net programs for the poor with a plan to dramatically overhaul Medicare, kicking off a politically-charged, election-year debate over trillion-dollar deficits and what to do about them.

The debate quickly split along partisan lines, with Republicans shunning tax increases on the wealthy called for by President Barack Obama, while Democrats resisted curbs on federal health care spending and further cuts to domestic programs. An alternative based on Obama's 2010 deficit commission promised to bring at least a glimmer of bipartisanship to the floor but was expected to fall victim Wednesday night to GOP opposition to tax hikes and Democratic resistance to further cuts to domestic programs.

The main focus, though, is on the budget-slashing GOP plan by Budget Committee Chairman Paul Ryan, R-Wis., which would quickly bring the deficit to heel but only through unprecedented cuts to programs for the poor like food stamps, Medicaid, college aid and housing subsidies. The Republican budget also reprises a controversial Medicare plan that would switch the program — for those under 55 today — from the traditional framework in which the government pays doctor and hospital bills to a voucher-like approach in which the government subsidizes purchases of health insurance.

The GOP plan is set to pass on Thursday, but swiftly die in the Democratic Senate. Under the arcane budget rules of Congress, the annual budget resolution is a sweeping but nonbinding measure that sets the parameters for follow-up legislation.

The measure reopens last summer's hard-fought budget and debt deal with Obama, imposing new cuts on domestic agencies while easing cost curbs on the Pentagon that won bipartisan support just months ago. It would set in motion follow-up legislation that would substitute $261 billion in spending cuts spaced over a decade for $78 billion in automatic spending cuts that would cut the Pentagon budget by about 10 percent next year and cut numerous domestic programs as well.

The election-year GOP manifesto paints clear campaign differences with Obama, whose February budget submission offered tax increases on the wealthy but mostly left alone key benefit programs like Medicare, Medicaid and food stamps. Obama and his Democratic allies instead promise to protect programs aimed at the elderly and the poor.

Ryan said the GOP plan steps in aggressively to prevent a European-style debt crisis that would swamp the economy and force draconian spending cuts and tax increases.

"Let's not wait until we have a crisis. Let's not wait until interest rates go up and we're in sort of a European meltdown mode," Ryan said. "Let's do it right and do it now, because then we can keep the promises that government has made to people who need it the most."

But Democrats said the Ryan plan makes spending cuts that are simply too draconian, knocking millions of people off of food stamps and forcing states to drop Medicaid nursing home coverage for many elderly people. At the same time, Democrats said the GOP budget promises a radical overhaul of the tax code that would deliver big tax cuts to upper-income people while taking away tax deductions and credits important to the middle class and the poor, like the child tax credit, and deductions of health insurance, mortgage interest and contributions to charity.

Democrats say the GOP Medicare proposal, similar to a plan that started a political firestorm last year, would cut costs steeply and provide the elderly with a steadily shrinking menu of options and higher out-of-pocket costs.

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