This is an archived article that was published on sltrib.com in 2012, and information in the article may be outdated. It is provided only for personal research purposes and may not be reprinted.
Washington • A divided House approved a $3.6 trillion Republican budget on Thursday recasting Medicare and imposing sweeping cuts in domestic programs, capping a battle that gave both political parties a campaign-season stage to spotlight their warring deficit-cutting priorities.
But the partisan divisions over the measure, which is dead on arrival in the Democratic-led Senate, also underscore how tough it will be for lawmakers to achieve the cooperation needed to contend with a tsunami of tax and spending decisions that will engulf Congress right after this fall's elections.
"This is very easy," Robert Bixby, executive director of the Concord Coalition, a bipartisan group that advocates debt reduction, said of House passage of a budget that will go no further in Congress. "When you get to the budget bomb at the end of the year, it's for real. You're going to actually have to pass something."
The fiscal plan the House passed Thursday by a near party-line 228-191 vote would reshape and squeeze savings out of Medicare and Medicaid, the federal health insurance programs for the elderly and poor. It would force deep cuts in a wide range of spending, including rail projects, research and Pell Grants for low-income college students.
It would block President Barack Obama's plans to raise taxes on couples earning above $250,000 a year. Instead, it would collapse the current six income tax rates into just two, with a top rate of 25 percent — well below the current 35 percent ceiling — while erasing tax deductions and other breaks that the GOP plan failed to specify.
Overall, the GOP budget would cut spending $5.3 trillion more deeply over the next decade than Obama would — out of more than $40 trillion that would be spent. It would cut taxes by $2 trillion more than the president's plan. That leaves Republicans seeking a hefty $3.3 trillion in deeper deficit reduction than Obama.
The measure immediately became grist for the presidential campaign.
"House Republicans today banded together to shower millionaires and billionaires with a massive tax cut paid for by ending Medicare as we know it and making extremely deep cuts to critical programs needed to create jobs and strengthen the middle class," White House press secretary Jay Carney said in a written statement.
At nearly the same time, GOP presidential front-runner Mitt Romney issued a statement of his own.
"The House budget and my own plan share the same path forward: pro-growth tax cuts, getting federal spending under control and strengthening entitlement programs for future generations," Romney said.
With such stark differences over what to do about huge federal budget shortfalls, it was easy to predict that the two parties would disagree vehemently over the House plan.
It was also easy for the two sides to remain divided because there is little practical consequence if Congress' budget is ignored or, like this year, if a final version is never approved. That's because the budget is a non-binding blueprint that legislators are supposed to follow as they work on spending and revenue bills later in the year, but don't really have to.
Come January, though, a series of potentially cataclysmic fiscal events will occur almost simultaneously that lawmakers and the new president will have to confront and agree to do something about, one way or another.
Tax cuts first approved under President George W. Bush will expire, imposing tax increases on virtually every working American. Billions of dollars in spending cuts to defense and domestic programs, triggered by the failure of Congress' debt-cutting super committee, will start taking effect unless legislators block them.
Right around that time, the government should hit its debt limit and need renewed borrowing authority to avoid a federal default. A new limit will be required from lawmakers who fought right to the brink in a similar battle last summer.
Congressional gridlock on spending bills, always a likelihood, may be threatening a federal shutdown. And a payroll tax cut, extra unemployment benefits and a host of temporary tax breaks for businesses will all be about to expire.
"You've got a budget just about to blow up. There's never been anything like this," Bixby said of the intersecting decisions that will have to be made.
Work on those problems could well start in a postelection session of Congress. Whether either party has more leverage than it does in today's stalemated Washington will depend on how the congressional and presidential elections are decided.
In one indication of the pressures that will face lawmakers seeking middle ground, a coalition of both parties' moderates offered a compromise budget this week that combined tax increases with spending cuts in an attempt to curb federal deficits. It lost resoundingly on Wednesday, garnering only 38 votes.
That measure's two leading sponsors, Reps. Steve LaTourette, R-Ohio, and Jim Cooper, D-Tenn., said in separate interviews that 100 or more lawmakers had told them they would support the bipartisan proposal or were leaning toward doing so.
But then came a flood of lobbying. Conservative groups like the anti-tax Americans for Tax Reform and the Club for Growth pushed Republicans to oppose the bipartisan plan, while the AFL-CIO, the National Committee to Preserve Social Security and Medicare, and other groups brought pressure from the left.
"A vote for Cooper-LaTourette is a vote for deep cuts in Social Security benefits, cuts in Medicare benefits and Medicaid" and tax breaks for the wealthy and for U.S. firms shipping jobs abroad, said a letter the AFL-CIO sent lawmakers.
"People are afraid of campaign money drying up, they're afraid of being attacked by ads on TV, they're afraid of losing goodwill, especially if they see you're not going to win," said Cooper, explaining the clout opposition groups had with lawmakers facing re-election this fall.
LaTourette said that after the bipartisan plan failed, he telephoned Erskine Bowles to apologize "for damaging his hard work." Bowles, a former White House chief of staff to President Bill Clinton, was a leader of Obama's bipartisan deficit-reduction commission along with former Wyoming GOP Sen. Alan Simpson. LaTourette and Cooper used the commission's debt-reduction plan as a model.
"I wasn't surprised that both the right and the left came at us," LaTourette said. "I was surprised at the ferocity of the attacks." —
House OKs highway funding bill
The House passed a stopgap three-month bill Thursday to keep federal highway and transit aid flowing and avoid a widespread shutdown of construction projects.
The mostly party-line vote of 266 to 158 came as Republicans and Democrats argued over how best to prevent economic disruption.
That sent the bill to the Senate, which must pass the same measure by Saturday, when the government's authority to spend on transportation programs and levy federal fuel taxes expires. The House was to begin a two-week recess later Thursday, leaving senators with few options. —
Budget bill highlights
Highlights of the Republican budget passed by the House on Thursday:
Envisions discretionary and mandatory spending of about $40 trillion over the next decade, $7 trillion less than spending projected in President Barack Obama's budget proposal. It cuts taxes by $2 trillion from what Obama proposed over that period, and cuts spending by $5.3 trillion from what the president sought.
Would bring the annual federal deficit, now more than $1 trillion, down to about $287 billion in 2022. The president's budget sees the deficit falling to about $704 billion in 2022.
Sets the ceiling for discretionary spending next year at $1.028 trillion. That's $19 billion under the ceiling set in the budget deal Congress reached with the White House last year.
Extends the 2001 and 2003 Bush tax cuts. It repeals the alternative minimum tax and reduces tax brackets from the current six to two, at 10 percent and 25 percent. The top corporate tax rate is set at 25 percent. The measure calls for ending tax loopholes but does not specify which ones.
Eliminates an automatic $50 billion cut in Pentagon spending in 2013, and sets the defense budget for next year at $554 billion.
Repeals the 2010 health care act's planned expansion of Medicaid and converts the federal share of Medicaid spending into block grants to the states. The cumulative cost of Medicaid over the next decade would be reduced from more than $4 trillion to $3.4 trillion.
The Supplemental Nutrition Assistance Program, or food stamps, is also converted to block grants. It sets a course for deep reductions in federal spending on highway and rail projects, research and aid to college students and assistance for farmers.
Repeals the individual mandate and health insurance exchanges in the 2010 health care act.
Starting in 2023, gradually increases the eligibility age for Medicare from 65 to 67. Future seniors would be able to choose between Medicare and private health care plans offered on a new Medicare exchange.