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Ryan Budget Plan Aims to Roll Back Obama Agenda Ryan Budget Plan Aims to Roll Back Obama Agenda
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WASHINGTON – Senate Democrats and House Republicans on Tuesday outlined vastly different approaches to shoring up the government’s finances, illustrating their divergent fiscal strategies even as both sides insisted publicly that a bipartisan fiscal compromise was possible. WASHINGTON — Senate Democrats and House Republicans on Tuesday outlined vastly divergent approaches to shoring up the government’s finances, a reminder of how far apart they remain on fiscal policy even as both sides insist publicly that a bipartisan compromise is possible.
As part of that compromise effort, President Obama made a rare lunchtime appearance at a weekly gathering of Democratic senators – his first of four meetings with lawmakers on Capitol Hill this week – to explore ways that the two parties could at last overcome some of their differences over the budget and fiscal matters, which have left them bitterly divided for much of the last five years. As part of the effort to find common ground, President Obama made a rare appearance at a gathering of Democratic senators — his first of four meetings with lawmakers on Capitol Hill this week — to explore ways that the two parties could overcome differences that have deadlocked the budget process for much of the last five years.
But in reality, the two parties could not be taking more different paths. But in many ways, the two parties seemed to be working in parallel universes.
House Republicans, led by Representative Paul D. Ryan of Wisconsin, laid out a tax and spending plan that would cut spending by $4.6 trillion through 2023, in large part by rolling back many of the president’s signature legislative accomplishments. It would repeal the health care overhaul of 2009, eliminate the subsidized insurance exchanges and Medicaid expansion that make up the core of the law, and turn Medicare into a system of private insurance plans financed by federal vouchers. House Republicans, led by Representative Paul D. Ryan of Wisconsin, presented a tax and spending plan that relies on many of the same policies that became lightning rods for critics during the 2012 presidential campaign when Mr. Ryan was the party’s vice-presidential nominee. At the White House, a senior administration official said the plan demonstrated that House Republicans were not chastened by their party’s losses in November.
The Republican proposal would also do away with Wall Street regulatory laws that Mr. Obama championed and cancel the financing his administration sought for a high-speed rail network. The Republican plan sets out to balance the budget in a decade and would cut spending by $4.6 trillion through 2023, in large part by rolling back many of President Obama’s signature legislative accomplishments. It would repeal the health care overhaul of 2009, eliminate the subsidized insurance exchanges and Medicaid expansion that make up the core of the law, and turn Medicare into a system of private insurance plans funded by federal vouchers.
Senate Democrats, meanwhile, were moving forward with a budget they planned to start debating on Wednesday. In their meeting with Mr. Obama, which lasted more than an hour, several senators said they expressed concerns about cuts in popular entitlement programs like Social Security. And in their budget they plan to exclude changes Mr. Obama has said should be left on the table, like an adjustment to how the inflation rate is calculated that would reduce certain federal retirement benefits. Republicans would also do away with Wall Street regulatory laws that Mr. Obama championed while canceling the financing his administration sought for a high-speed rail network.
In stark contrast to the austerity measures and dismantling of top Obama administration priorities that are included in the Republican plan, the Democrats’ budget went in the opposite direction. Senate Democrats, meanwhile, were pressing forward with a budget they planned to start moving through the committee process on Wednesday. Before they could proceed, they had to set aside differences among themselves regarding how much to change costly but cherished federal benefit programs. When Mr. Obama met with them on Tuesday, several Democratic senators voiced concerns about cuts to Social Security and Medicare.
Their proposal would create a $100 billion economic stimulus initiative for job training and repair to roads and bridges, projects that Democrats say they would pay for by closing loopholes in the tax code that benefit large corporations and wealthy individuals. All told, Democrats believe they can save nearly $1 trillion through such tax reform. The Democrats’ budget plan will not call for adjusting the way inflation is calculated as a way to lower the future cost of those benefits — something Mr. Obama has said should be on the table in talks with Republicans.
They would save $1 trillion more by trimming spending, with a quarter of those cuts coming from the military. In stark contrast to the austerity measures and dismantling of top Obama administration priorities that are the nub of the Republican plan, the Democrats’ budget would create new government initiatives, expand others and seeks to generate more tax revenue.
As lawmakers began their budget deliberations, a stopgap measure to finance the government after the end of the month ran into trouble in the Senate as Tom Coburn of Oklahoma and John McCain of Arizona, both Republicans, raised objections to what they called wasteful pork-barrel spending even as the government was trying to absorb $85 billion in cuts. Their proposal calls for a new $100 billion economic stimulus initiative for job training and repair to roads and bridges, projects Democrats say they would pay for by closing loopholes in the tax code that benefit large corporations and wealthy individuals. All told, Democrats believe they can save nearly $1 trillion through such tax reform.
Democrats immediately seized on the Republican budget as a sign that the party had failed to heed the lessons of the 2012 elections, which denied conservatives the presidency and cut their ranks in both houses of Congress. They would save $1 trillion more by trimming spending, with a quarter of those cuts coming from the Pentagon.
“This budget reflects the same skewed priorities the Republican Party has championed for years — the same skewed priorities Americans rejected in November,” Senator Harry Reid of Nevada, the majority leader, said in remarks on the Senate floor on Tuesday. “We’ve seen this show before.” But as lawmakers on Tuesday began their budget deliberations for the fiscal year that starts Oct. 1, a stopgap measure to fund the government until then ran into trouble in the Senate as Tom Coburn of Oklahoma and John McCain of Arizona, both Republicans, raised objections, saying it included wasteful pork-barrel spending.
Mr. Ryan, who was the Republican vice-presidential nominee last year and whose budget became a lightning rod of liberal criticism for its steep cuts to domestic programs, said the election results would not persuade Republicans to give up the fiscal fight. Democrats on Tuesday immediately seized on Mr. Ryan’s budget as a sign that the party had failed to heed the lessons of the 2012 elections, which denied Mr. Ryan and Mitt Romney the presidency and cut Republican ranks in both houses of Congress.
“The election didn’t go our way — believe me I, I know what that feels like,” Mr. Ryan said at a news conference during which he was asked repeatedly why his party was doubling down on proposals that the American people appeared to reject when they voted for Mr. Obama over him and Mitt Romney in November. At the White House, senior administration officials said the Ryan budget underscored the hurdles the White House will confront if it hopes to reach an overarching budget deal with House Republicans. If Republicans demonstrate that absolutism in negotiations, another senior official said, there is no chance for an agreement.
“This budget reflects the same skewed priorities the Republican Party has championed for years — the same skewed priorities Americans rejected in November,” Senator Harry Reid, the majority leader, said in remarks on the Senate floor on Tuesday. “We’ve seen this show before.”
But Mr. Ryan said the election results would not intimidate Republicans into backing down.
“The election didn’t go our way — believe me I, I know what that feels like,” Mr. Ryan said at a news conference during which he was asked repeatedly why his party was doubling down on proposals the American people appeared to reject in November.
“That means we surrender our principles? That means we stop believing in what we believe in?” he said, continuing: “We think we owe the country a balanced budget. We think we owe the country solutions to the big problems that are plaguing our nation: a debt crisis on the horizon, a slow-growing economy, people trapped in poverty. We’re showing our answers.”“That means we surrender our principles? That means we stop believing in what we believe in?” he said, continuing: “We think we owe the country a balanced budget. We think we owe the country solutions to the big problems that are plaguing our nation: a debt crisis on the horizon, a slow-growing economy, people trapped in poverty. We’re showing our answers.”
Mr. Ryan, using trademark partisan barbs at the president and lofty statements of principle, would do with this plan what he did not in his first two: Produce a small budget surplus by the last year of the 10-year budget window. The deficit would fall to $528 billion in fiscal 2014, down modestly from the $616 billion deficit forecast last month by the Congressional Budget Office. Republicans said their plan would balance the budget in 10 years, a contention the White House said was impossible given that it would cut the top marginal income tax rate, which the wealthiest Americans pay, to 25 percent from 39.6 percent, depriving the government of considerable tax revenue.
During the presidential campaign, Mitt Romney promised to cut the top income tax rate by seven percentage points, a $5 trillion hole in the government’s financing that Mr. Obama mocked as mathematically impossible to fill. Mr. Ryan’s plan would lower the top rate by 14.6 percentage points, but somehow keep the government’s finances unchanged with tax loophole closures he has declined to detail.
Mr. Ryan said in his plan the deficit would fall to $528 billion in fiscal 2014, down modestly from the $616 billion deficit forecast last month by the Congressional Budget Office.
From there, the deficit’s drop would be steeper; it is projected to be $125 billion in 2015 and $69 billion in 2016, with a $7 billion surplus in 2023.From there, the deficit’s drop would be steeper; it is projected to be $125 billion in 2015 and $69 billion in 2016, with a $7 billion surplus in 2023.
To do it, the budget assumes $1.8 trillion in savings with the repeal of the subsidized insurance exchanges and Medicaid expansion in the president’s Affordable Care Act over 10 years. Medicaid would be cut an additional $756 billion, by turning it into block grants to the states with limited growth. Other so-called mandatory programs — not subject to Congress’s annual discretion — would be cut $962 billion. States would be allowed to put time and access limits on food stamps, for instance, and agricultural subsidies would be cut by $31 billion. Medicaid would be cut an additional $756 billion, by turning it into block grants to the states and limiting growth. Other so-called mandatory programs — not subject to Congress’s annual discretion — would be cut $962 billion. States would be allowed to put time and access limits on food stamps, for instance, and agricultural subsidies would be cut by $31 billion.
Discretionary programs, already squeezed by caps imposed in 2011 and automatic “sequestration” cuts that went into force this month, would be cut another $249 billion. But because military spending would be allowed to rise $500 billion over the current spending caps through 2023, the cuts to domestic programs could be deep. The budget assumes a 10-percent reduction in the federal work force by 2015. Discretionary programs, already squeezed by caps imposed in 2011 and automatic “sequestration” cuts that went into force this month, would be cut another $249 billion. Pell grants, a popular federal higher-education aid program, would be capped at the current level of $5,645 for 10 years. And federal education and job-training programs would be consolidated.
Pell grants, a popular federal higher-education aid program, would be capped at the current level of $5,645 for 10 years. And federal education and job-training programs would be consolidated. Neither party’s budget will become law. They are merely statements of policy priorities. But they will form the basis for any negotiations to reach what lawmakers hope would be a broader compromise on fiscal and economic issues that would end the cycle of passing temporary stopgap budgets.
Bowing to pressure from Republican moderates and House leaders, Mr. Ryan did scrap plans to implement his Medicare program sooner, again protecting anyone 55 and over from fundamental changes to the health care insurance program for the elderly.

Mark Landler and Jada F. Smith contributed reporting.

The budget, like last year’s, calls for a dramatically simplified tax system aimed at producing just two tax brackets, 10 percent and 25 percent. But because the top rate jumped in January from 35 percent to 39.6 percent, the drop in marginal tax rates for families with incomes over $400,000 would be even more dramatic than last year. Under the Ryan plan, the corporate tax rate would also fall, from 35 percent to 25 percent — although all those tax changes are supposed to be crafted to bring in the same amount of revenue as the current tax code, a tall order.
Mr. Ryan framed these proposals in moral terms, saying his budget “recognizes that people do not find happiness in grim isolation or by government fiat. They find it through friendship — through free, vibrant exchange with the people around them. They find it through achievement. They find it in their families and neighborhoods, their places of worship and youth groups. They find it in a healthy mix of self-fulfillment and belonging.”
But Democrats are not likely to see it that way. On Monday, even before the details were out, the Democratic Senatorial Campaign Committee took aim at House Republicans who are expected to vote for the plan next week, then run for the Senate next year.
“Really, this is the first in several steps to hold Republicans accountable on the air, on the ground, in the mail and online,” promised Guy Cecil, the group’s executive director.

Jeremy W. Peters contributed reporting.