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Published March 29 2012

Divided House approves 2013 budget proposal

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 warring deficit-cutting priorities.

But the partisan divisions over the measure, which is dead on arrival in the Democratic-led Senate, also underscores 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.

Local members of Congress were as equally split along partisan lines.

Minnesota Democratic Rep. Collin Peterson said he opposed the budget plan for its drastic cuts to agriculture, while North Dakota Republican Rep. Rick Berg said he supported the proposal because it secured Medicare for seniors.

It would force deep cuts in a wide range of spending, including rail projects, research and Pell Grants for low-income college students.

Peterson said the plan would cut nearly $180 billion from farm programs over 10 years – including a demand that the Agriculture Committee on which he’s the ranking Democrat cut $33 billion by April 27.

He said the House vote has him concerned about the prospect of a farm bill passing later this year.

“I have a hard time seeing how the House can pass a farm bill after going through this process,” he said.

The budget would also 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 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.

It also prompted statements from Berg and Peterson.

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 legislators are supposed to follow as they work on spending and revenue bills later in the year, but they 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.

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.


Forum reporter Kristen Daum contributed to this report.