House Passes Ryan Plan That Will Help Guide U.S. Budget Debate

Friday, 15 April 2011 02:47 PM

April 15 (Bloomberg) -- The House passed a Republican budget that would cut U.S. spending by more than $6 trillion over a decade and privatize Medicare in a vote that will help define the fight over the deficit into next year’s elections.

Lawmakers approved House Budget Committee Chairman Paul Ryan’s proposal on a 235-193 vote, one day after wrapping up their first budget battle of the year with passage of a $38.5 billion spending cut for 2011.

“Yesterday we cut billions, today we cut trillions,” said Representative Kevin McCarthy of California, the third-ranking House Republican.

The plan by Ryan, a Wisconsin Republican, is sure to be derailed in the Democratic-controlled Senate and has been targeted for attack by President Barack Obama as he gears up his 2012 re-election bid.

Defending the plan, House Majority Leader Eric Cantor of Virginia said today, “We are finally doing what families and small businesses have done for years, tightening the belt and learning to do more with less.

Democrats, calling the plan the “Ryan-Tea Party” budget, are counting on voters to view it as going too far. Obama zeroed in on the plan’s proposal to replace the traditional Medicare health-care system for the elderly with subsidies to buy private insurance starting with people who turn 65 in 2022.

“Put simply, it ends Medicare as we know it,” Obama said in an April 13 speech on the deficit.

‘Sticking Seniors’

The measure amounts to “sticking seniors with the bill for ever-rising health care costs,” Democratic Representative Chris Van Hollen of Maryland, the ranking Democrat on the Budget Committee, said during floor debate today.

Senator Charles Schumer of New York told reporters yesterday that with the dispute over the 2011 budget settled, “the debate ahead of us is about more than spending levels. It is about the role of government itself. It will be one of the seminal debates in the first quarter of this new century, and it will determine what America is like.”

Ryan’s proposal relies exclusively on spending cuts to reduce the government’s deficit, slicing $6.2 trillion over 10 years from Medicare and scores of other programs including Medicaid, food stamps, farm subsidies and Pell college tuition grants. It calls for repealing the administration’s health-care overhaul and would cut the top corporate and individual tax rates from 35 percent to 25 percent. The plan wouldn’t balance the government’s books until 2040.

CBO Report

Most Americans would pay more for their health care under the plan, according to the Congressional Budget Office, while states may have to cut participants in Medicaid, the federal- state health-care program that serves the poor.

Representative Allen West, a freshman Republican from Florida, said he is ready to take the plan to his constituents.

“I’m not up here to worry about being re-elected,” West said. “There is a dire situation” and “we have to explain it to the people, not stand up and demagogue it and just try to scare people.”

After today’s vote, the chamber will need to produce additional legislation to make specific changes to tax and spending policies. That process could produce bills deviating from Ryan’s plan, and some Republicans said it allows them to back his budget even if they don’t support his policy prescriptions.

Not ‘Signing On’

“I don’t necessarily think that just by voting for the budget, you’re signing on” to his proposals, said Missouri Representative Jo Ann Emerson, co-chairwoman of a group of Republican moderates known as the Tuesday Group.

“He doesn’t have control over what the committees do,” she said. “You know what happens once the committee process starts. It turns out to be a lot different.”

Each side is seeking to frame the debate over Ryan’s budget around large themes.

“It’s important to define ourselves with our actions and show the country that we’re serious about getting this debt under control,” Ryan said in an interview. “To sit back and not do anything about it because of politics would be a huge moral failing.”

Representative Rosa DeLauro, a Connecticut Democrat, said the Republicans’ budget “throws seniors to the wolves.”

Discretionary Funds

Today’s vote opens another round of fighting over the so- called discretionary part of the budget -- the areas lawmakers control through annual appropriations bills. Ryan’s plan calls for $31 billion in 2012 cuts, on top of the $38.5 billion in savings approved yesterday after negotiations that almost led to a government shutdown.

“We’ll be going through this same battle all over again,” said Representative Scott Garrett, a New Jersey Republican on the Budget Committee.

Ryan said the fact that his plan is coming to a vote shows how “times have changed.” A similar budget plan by Ryan attracted just 14 co-sponsors last year when Democrats controlled the House. Ryan credited his party’s 87-member House Republican freshman class, many elected with the help of Tea Party activists, for the change.

“They brought a whole new perspective. They brought a lot of energy, a lot of gumption, a lot of backbone to Congress,” Ryan said.

--With assistance from Catherine Dodge and Laura Litvan in Washington. Editors: Laurie Asseo, Don Frederick

To contact the reporter on this story: Brian Faler in Washington at bfaler@bloomberg.net

To contact the editor responsible for this story: Mark Silva at msilva34@bloomberg.net

© Copyright 2018 Bloomberg News. All rights reserved.

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April 15 (Bloomberg) -- The House passed a Republican budget that would cut U.S. spending by more than $6 trillion over a decade and privatize Medicare in a vote that will help define the fight over the deficit into next year’s elections. Lawmakers approved House Budget...
Friday, 15 April 2011 02:47 PM
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