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House prepares to vote on $6T spending cut plan

WASHINGTON (AP) - A bold but politically risky plan to cut
trillions of dollars from the federal budget is coming to a House
vote, with insurgent Republicans rallying behind the idea of
fundamentally reshaping the government's role in health care for
the elderly and the poor.
The GOP plan, expected to be voted on Friday, promises more than$6 trillion in spending cuts over the next decade compared with the budget that President Barack Obama offered in February, relying on stiff cuts to domestic agency accounts, food stamps and the
Medicaid health care program for the poor and disabled.
But while leaving Social Security alone, the measure calls for
transforming Medicare from a program in which the government
directly pays medical bills into a voucher-like system that
subsidizes purchases of private insurance plans. People 55 and over
would remain in the current system, but younger workers would
receive subsidies that would steadily lose value over time.
Virtually every budget expert in Washington agrees that
projected Medicare cost increases are unsustainable, but the GOP
initiative - attacked by Democrats as ending Medicare's guarantee
as we know it - has launched a major-league Washington imbroglio.
The primary author of the GOP plan is unfazed by the Democratic
"The biggest threat to Medicare is the status quo and the
people defending it," House Budget Committee Chairman Paul Ryan,
R-Wis., told The Associated Press on Thursday.
Democrats countered with official estimates showing the GOP plan
would provide vouchers whose value would steadily erode.
"They end the Medicare guarantee," said top Budget Committee
Democrat Chris Van Hollen of Maryland. "They force seniors to
leave the Medicare program and go into the private insurance market
where costs continue to rise day in and day out."
The House began debate on the measure Thursday with a vote on it
and several competing alternatives - most importantly a Democratic
substitute raising taxes on the wealthy and a plan by GOP
conservatives to cut far more harshly - scheduled for Friday.
The GOP plan isn't actual legislation. Instead, under the arcane
and decidedly imperfect congressional budget process, the measure
sketches out a nonbinding blueprint each year for running the
government. The resolution doesn't require the president's
signature, but it does set the framework for changes to spending or
tax policy in follow-up legislation.
The Democratic-controlled Senate has yet to produce its
alternative plan as the Budget Committee chairman, Sen. Kent
Conrad, D-N.D., and other members of Obama's independent fiscal
commission pursue a bipartisan "grand bargain" blending big
spending curbs with new revenues flowing from a simplified tax
The budget deficit is projected at an enormous $1.6 trillion
this year, but more ominously, current projections show an even
worse mismatch as the baby boom generation retires and Medicare
costs consume an ever-growing share of the budget. But there's a
standoff between House Republicans and Obama over the president's
plan to raise taxes on upper-income people.
Friday's voting comes on the heels of final congressional action
on a long-overdue plan to wrap up the 2011 budget year. That
measure claims $38 billion in savings but just $20 billion to $25
billion in lower deficits because illusory spending cuts comprise a
big portion of the measure.
For the long term, Ryan's 10-year plan still can't claim a
balanced budget by the end of the decade because of promises to not
increase taxes or change Medicare and Social Security benefits for
people 55 and over.
But eventually annual deficits are projected to fall to the $400
billion range, enough to stabilize the nation's finances and
prevent a European-style debt crisis that could force far harsher
steps, Ryan said.
The GOP measure also comes after Obama on Wednesday promised
stiffer deficit curbs than contained in his February budget. But
after Ryan asked the White House budget office for more details, he
was pointed to a news release.

(Copyright 2011 by The Associated Press. All Rights Reserved.)

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