By The Associated Press
WASHINGTON (AP) — Republicans have pushed an election-year $3.5 trillion budget through a divided House that showcases their plans for trimming federal deficits and contrasts sharply with how President Barack Obama and Democrats would tackle the nation’s fiscal problems.
The GOP package would revamp Medicare, slice everything from food stamps to transportation and reject Obama’s call for higher taxes on the rich. It envisions collapsing the six different income tax rates into just two, with a top rate of 25 percent compared with today’s 35 percent. It would also eliminate unspecified tax breaks.
The House approved the measure Thursday by a near party-line 228-191 vote.
Obama and Democrats prefer raising taxes on the wealthiest Americans and on oil companies, boosting funds for roads and schools and culling modest savings from domestic programs.
THIS IS A BREAKING NEWS UPDATE. Check back soon for further information. AP’s earlier story is below.
The House rejected a budget pushed by its most conservative members on Thursday and moved toward approval of a $3.5 trillion plan backed by Republican leaders that would revamp Medicare, slice everything from food stamps to transportation and reject President Barack Obama’s call to raise taxes on the rich.
The conservatives’ package, defeated 285-136, featured sharp reductions in planned spending for Medicaid and other domestic programs. It claims to turn this year’s $1.2 trillion federal deficit into a balanced budget in five years – which most analysts consider unachievable because few lawmakers would vote for the package’s proposed cuts.
None of the competing budgets by Ryan, President Barack Obama or House Democrats claim to balance the budget within the next decade.
Underlining the growing influence of tea party and other conservative Republicans, a clear majority of GOP lawmakers voted for the conservatives’ plan. It was defeated because virtually every Democrat voted against it.
The main GOP blueprint by House Budget Committee Chairman Paul Ryan, R-Wis., was headed for all but certain House passage Thursday, mostly along party lines. It faces a demise that is just as sure in the Democratic-run Senate, which plans to ignore it, but the battle remains significant because of the clarity with which it contrasts the two parties’ budgetary visions for voters.
Republicans were focused on sharper deficit reduction and starkly less government than Democrats wanted and were proposing to lower income tax rates while erasing many unspecified tax breaks. Obama and Democrats were ready to boost taxes on families making above $250,000 and on oil and gas companies, add spending for roads and schools and cull more modest savings from domestic programs.
“This is the American taxpayers’ money, and we ought to be more protective of it,” House Speaker John Boehner, R-Ohio, told reporters Thursday.
Democrats said they, too, were eager to stanch deficits that now exceed $1 trillion annually. But they said it needed to be done in a more balanced way, with rich and poor alike sharing the load.
“It’s a path to greater prosperity – if you’re already wealthy,” said Rep. Chris Van Hollen of Maryland, top Democrat on the Budget panel, mocking the “Path to Prosperity” title Ryan has given his document. “Because our Republican colleagues refuse to ask millionaires to contribute one cent to deficit reduction, they hit everyone and everything else.”
In another vote expected Thursday, Democrats were pushing a measure featuring pumped-up spending for education and new tax credits for companies creating jobs and raising wages, while claiming savings from winding down the wars in Iraq and Afghanistan, government waste and reductions in farm payments. It was destined for defeat.
Underscoring the prickly partisan gulf over how to tackle the budget’s drastic imbalances, the House late Wednesday on a 382-38 vote easily shot down a compromise, bipartisan deficit-cutting plan by moderates of both parties that mingled tax increases with spending cuts.
The measure was modeled roughly on a package produced by Obama’s deficit-reduction commission. The commission’s plan drew praise from prominent deficit foes but was treated coolly by Obama and congressional leaders of both parties.
The House also voted 414-0 Wednesday to reject Obama’s budget, with Democrats accusing the GOP of forcing the vote to embarrass them. Democrats were concerned Republicans would use campaign ads to link Democrats who supported Obama’s plan to all of its details, including tax increases and boosts for unpopular programs.
Congress’ budget is a nonbinding road map that suggests tax and spending changes that lawmakers should make in separate, later legislation.
Particularly with voters deciding control of the White House and the Capitol in November, the two parties are sure to stalemate each other’s budgetary priorities until after the election.
The House GOP budget would cut spending by $5.3 trillion more over the next decade than Obama’s would – out of more than $40 trillion that would still be spent during that period. It envisions repeal of the president’s health care overhaul and sets a course for deep reductions for highway and rail projects, research and aid to college students and farmers while easing planned defense cuts.
It also would cut taxes by $2 trillion more than the president over that time, leaving Republicans seeking about $3.3 trillion in deeper deficit reduction than Obama.
Drawing the most political heat was Ryan’s plan for Medicare, the $500 billion-a-year health insurance program for older Americans that all agree is growing so fast that its future financing is shaky. Both parties know that seniors vote in high numbers and care passionately about the program.
Republicans would leave the plan alone for retirees and those near retirement, letting the government continue paying much of their doctors’ and hospital bills.
For younger people, Medicare would be reshaped into a voucher-like system in which the government would subsidize people’s health care costs, which Republicans say would drive down federal costs by giving seniors a menu of options that would compete with each other. Democrats say government payments won’t keep up with the rapid inflation of medical costs, leaving many beneficiaries struggling to afford the care they need.
“It ends the Medicare guarantee,” House Minority Leader Nancy Pelosi, D-Calif., said of Ryan’s budget.
“This plan doesn’t end the Medicare guarantee,” said Rep. Jeff Flake, R-Ariz. “Arithmetic does. Unless we change something, unless we put it on a solvent footing, the Medicare guarantee is gone.”
Republicans would turn Medicaid, the nearly $300 billion-a-year federal-state health insurance program for the poor, into a grant that states could use as they wish. They also would trim its growth by $800 billion over the next decade.