House Gears Up For Another Budget Showdown

April 15, 2011

NPR Staff and Wires

House Republicans on Friday were expected to fire another broadside in the debate over deficits, voting on a spending blueprint that calls for dramatically revamping Medicaid and Medicare to pare trillions of dollars over the next decade.

The GOP's budget framework for the next fiscal year, beginning Oct. 1, would purportedly cut nearly $6 trillion in spending over 10 years, close tax loopholes and reduce tax rates for corporations and the wealthy.

The vote on the plan put forward by Rep. Paul Ryan, chairman of the House Budget Committee, comes a day after Congress passed legislation that funds the government through the remainder of fiscal 2011 and wrings an estimated $38.5 billion in savings from the budget.

The bitter fight over those cuts ground on until a few hours before a midnight deadline last Friday that would have triggered a partial shutdown of the government.

Ryan's plan stands little chance as written of even reaching a vote in the Senate, where Democrats still hold the majority. President Obama is widely expected to veto the measure even if it did pass.

Instead, it is likely to serve as an opening salvo in the debate over America's fiscal future and the 2012 election, with GOP lawmakers hoping to shore up support from the conservative Tea Party movement.

But the plan to fundamentally reshape the government's role in health care for the elderly and the poor is politically risky. In a Pew Research Center poll conducted last month, 65 percent of respondents said they oppose changes to Social Security and Medicare to reduce the deficit.

Medicare, Medicaid, Social Security and defense spending account for about 80 percent of the federal budget, according to The Associated Press.

Ryan's nonbinding framework for future legislation would make stiff cuts to Medicaid, the medical insurance program for the poor and disabled, and transform it into a grant program run by the states. It calls for transforming Medicare into a system under which the government provides future retirees with vouchers to buy private insurance coverage.

People now 55 and older would stay in the current system, but younger people would receive the insurance subsidies. Economists say those vouchers would lose value over time because they would not keep pace with fast-rising medical costs.

Rep. Tim Scott (R-SC) praised Ryan's proposal.

"Paul Ryan calls this plan the path to prosperity," he said. "I call it leadership. It's what our country has been thirsting for."

But President Obama said earlier this week that Ryan's proposal would slash health care coverage to 50 million Americans, including grandparents needing nursing home care, children with autism and kids "with disabilities so severe that they require 24-hour care.

"These are the Americans we'd be telling to fend for themselves," Obama said in a speech at George Washington University in which he laid out his own budget proposal. He said his plan would cut the federal deficit by $4 trillion over 12 years by eliminating health care fraud, raising taxes on the wealthy and paring defense spending.

Rep. Louise Slaughter, a New York Democrat, said the Ryan proposal "will end Medicare and cost-shift to seniors $6,000 more a year."

"Why are they doing that? Well, they get to pay for more tax breaks for big oil and millionaires who are untouched," she said.

And there's another huge spending fight looming on the horizon in May, when the U.S. Treasury is expected to hit its $14.3 trillion borrowing cap. That upper limit on borrowing has been increased with little fanfare 10 times in the past decade. But House Republicans are threatening to vote no this time unless the debt limit increase also includes more cuts to spending.

House Speaker John Boehner (R-OH) predicted another bruising fight.

Obama is "asking us to raise the debt limit without addressing the real problem with spending cuts and reforms," Boehner said. "This will not happen. And this will not pass the U.S. House."

NPR's David Welna contributed to this report, which also contains material from The Associated Press. Copyright 2011 National Public Radio. To see more, visit http://www.npr.org/.