Both Sides See New Budget as Gift

Posted April 5, 2011 at 6:34pm

Democrats and Republicans wasted no time on Tuesday turning House Budget Chairman Paul Ryan’s budget plan into a partisan rallying point.

Republicans across the spectrum applauded the Wisconsin Republican for putting a serious budget on the table, with $4.4 trillion in deficit reduction over the next decade, especially after Democrats failed to even offer one when they were in charge last year.

Many Democrats privately cheered the release of the budget plan as well, considering it to be a rare political gift and an ideological overreach that will prove unpopular with voters in 2012. They ripped into it with gusto as a boon to the rich at the expense of everyone else, with Minority Leader Nancy Pelosi (Calif.) even tweeting against Ryan’s plan during his press conference.

Ryan anticipated what was coming, acknowledging that his plan could help Democrats politically. But he said that Republicans have a responsibility to do something about the exploding federal debt.

“This is the most predictable economic crisis in our history, and what are we doing, playing politics?” Ryan asked at the press conference. “We don’t need clever politicians. We need leaders. We need leadership. And so we believe we have a moral imperative.”

Ryan proposed a sweeping plan, including $6.2 trillion in cuts from Obama’s 10-year budget — putting a legislative straitjacket on domestic discretionary spending and entitlements while repealing the health care reform law. It also cuts taxes another $1.8 trillion, with top rates cut to 25 percent for individuals and corporations.

Medicare would be transformed from guaranteed government benefits to a subsidy to buy private insurance. States would face $771 billion in Medicaid cuts coupled with broad flexibility to cut benefits or eligibility. And Ryan gives a nod to Social Security reform in an effort to prod Democrats to reach a bipartisan compromise.

But even Ryan’s budget didn’t quite go far enough for some. Rep. Jim Jordan, chairman of the conservative Republican Study Committee, praised the effort but said he plans to put out his own plan later this week to balance the budget within a decade. Ryan’s budget doesn’t eliminate the deficit until the late 2030s.

“We just think you need to balance it a little quicker,” the Ohio Republican said. “We like the ideas Paul has in his. [We’ll be] looking to implement those same kind of concepts, but we think you have to speed it up, because look, we think the financial situation of our country is so serious you’ve got to get to balance.”

Still, several House Republicans said that the proposal is the fruition of what many in the GOP talked about on the campaign trail last cycle and that it could potentially create an opening for increasing the debt limit, something Republican leaders agree is ultimately necessary.

“I think the kind of things in here, spending cap and getting to a balanced budget and repealing Obamacare, those are the things that are instrumental when you begin to talk about a debt limit increase, because we’re not interested in a debt limit increase that doesn’t structurally change the way the government works,” said Rep. Tom Price (Ga.), a member of the Budget panel and a former RSC chairman.

Ryan acknowledged that even under his proposal, the debt would keep rising for decades and wouldn’t be paid off until after 2050.

“This just shows you how deep of a hole our country is in,” Ryan said.

Under Ryan’s plan, the national debt would still increase $8 trillion over the coming decade to $23 trillion. And it would violate the GOP’s own proposals for a constitutional amendment requiring a balanced budget.

Democrats quickly pounced. Cutting taxes further for the wealthy and corporations while slashing spending on Medicaid, Medicare and other popular programs won’t fly, said Sen. Patty Murray (Wash.), chairwoman of the Democratic Senatorial Campaign Committee.

It’s “not something that the country is going to swallow,” she said.

Budget ranking member Chris Van Hollen blasted the budget as a “rigid ideological agenda that extends tax cuts to the rich and powerful at the expense of the rest of America — except this time on steroids.”

The Maryland Democrat promised to offer an alternative budget proposal with significant deficit reduction and predicted the fight would spill over into the 2012 presidential campaign.

“It’s going to be up to every Republican candidate for president to decide whether they want to run with this particular plan or not,” he said.

Ryan’s plan also faced withering criticism from other Democrats who have backed the president’s fiscal commission proposal to cut $4 trillion from the deficit through a combination of spending cuts and revenue increases.

“To me, to get $4 trillion out of domestic discretionary spending, Medicare and Medicaid would be devastating,” said Senate Majority Whip Dick Durbin (D-Ill.), a member of the bipartisan “Gang of Six” trying to turn that package into legislation.

Senate Budget Chairman Kent Conrad (D-N.D.) said Ryan’s plan to “shred Medicaid” wouldn’t fly and panned Ryan’s proposal to turn over Medicare to private insurance companies.

But Durbin said Ryan’s more extreme blueprint could actually help the Gang of Six get Democratic votes for its bipartisan approach.

“It will encourage some Democrats to look more kindly on our efforts,” Durbin said.

Ryan said Tuesday that elements of the budget plan were taken from Democratic ideas as well as the deficit commission and could help form the basis of a bipartisan compromise to increase the federal debt limit.

He acknowledged Tuesday that his budget isn’t going to become law — he predicted Obama isn’t going to sign a health care repeal anytime soon — but said many pieces of it could be enacted with bipartisan support, including as part of the debt limit battle.

“We think this gives you a great menu of options and policies to pick from as a package with a debt limit,” Ryan said.

Kathleen Hunter and Jessica Brady contributed to this report.