Deficit-slashing plan advances through House panel

AP News
Posted: Mar 16, 2016 7:58 PM
Deficit-slashing plan advances through House panel

WASHINGTON (AP) — A key House panel on Wednesday approved a GOP plan to eliminate the federal budget deficit without tax increases demanded by Democrats, relying on sharp cuts to federal health care programs, government aid to the poor, and hundreds of domestic programs supported by lawmakers in both parties.

The 20-16 Budget Committee vote could be the high point for the GOP blueprint, which is short of the majority votes needed to advance through the GOP-controlled House. Two tea party Republicans defected on the otherwise party-line vote.

Many tea party conservatives oppose it because it sticks to last year's budget and debt deal with President Barack Obama, which awarded the Pentagon and domestic programs generous spending increases.

The plan — which is an illustrative wish list rather than binding legislation — reserves its biggest cuts for health care programs, proposing to eliminate "Obamacare" coverage for millions of people, slash Medicaid, raise the eligibility age for Medicare to 67, and transform Medicare into a voucher-like system for future retirees.

It proposes significant cuts and new work requirements for food stamp benefits and would eliminate the Social Services Block Grant, which provides flexible grants to states for services to the poor. It proposes requiring federal workers to pay greater contributions into their pension plans and would scale back student loan subsidies for undergraduates.

The reward for such sacrifices would be a budget that balances in 10 years and eases the government debt burden faced by future generations. Eliminating health-care subsidies would boost labor participation, and lower deficits would boost national savings and private investment.

The plan's author, Budget Committee Chairman Tom Price, R-Ga., said it would "prioritize the responsibilities of the federal government — like national security — and save and strengthen those programs that are critical to the health, retirement and economic security of millions of Americans."

The opposition of tea party conservatives in the House, including the ultra-conservative House Freedom Caucus, is a setback for House Speaker Paul Ryan, R-Wis., who engineered passage of four separate budget plans as the committee chairman from 2011-2014 but seems stymied now by the same forces that deposed former Speaker John Boehner, R-Ohio. He's not trying to strong-arm Republicans into voting for it.

Actually implementing the cuts would require follow-up legislation, something Republicans have never attempted, in great part because it would be futile so long as President Barack Obama occupies the Oval Office — and not worth the political tumult. But it sets a template for what a GOP-controlled Congress might seek to cut if a Republican retakes the White House.

Democrats blasted the measure for finding the bulk of its $6.5 billion in 10-year savings from programs that help the poor and working class and for promising a tax overhaul that would substantially lower the top rate. The Center on Budget and Policy Priorities, a liberal research and advocacy group, calculates that programs for the poor, which make up 28 percent of domestic spending, would bear about 60 percent of the cuts in the House budget.

"It would decimate large swaths of the federal government," said Robert Greenstein, founder of the group. "It features particularly severe cuts in programs to help poor families and others of limited means."

The GOP plan would boost defense while calling for an almost 10 percent cut after next year to domestic programs such as education, health research and scientific research that are funded each year by Congress.

The annual budget debate gives lawmakers a chance to weigh in on the nation's financial picture. The government borrows about 16 cents of every dollar it spends and faces a potential debt crisis at some point if Washington's bickering factions don't address the problem.

Obama's February budget proposal contained only modest spending cuts and relied on a variety of tax increases — on the wealthy, oil production and tobacco, among others — to wrestle the deficit to economically sustainable levels, though it would never achieve a balanced federal ledger. It was dead on arrival with lawmakers, just as Wednesday's GOP measure is a non-starter with Democrats and the White House.