House 10-year budget plan would eliminate subsidies, make cuts to Medicaid

The House Budget Committee on Wednesday pressed ahead with a 10-year spending plan that promises sweeping cuts to healthcare programs and federal agencies even as a tea party rebellion threatens to derail the measure later on.

The committee vote would send the GOP blueprint to the full House, but passage is looking increasingly unlikely. Conservatives have rejected added spending for various government departments, as set in last year's deal with President Barack Obama.

The situation is a setback for House Speaker Paul Ryan (R-Wis.), who engineered passage of four separate budget plans as the committee chairman from 2011-2014.

Now, in the first budget cycle as speaker and after years of criticizing Senate Democrats for ignoring their fiscal duties, Ryan is not pressuring the GOP rank and file to fall in line behind the leadership-backed proposal.

A big obstacle is the House Freedom Caucus, a group of about three dozen ardent conservatives responsible for toppling Ryan's predecessor as speaker, former Rep. John Boehner (R-Ohio). They have rejected a plan by Ryan and others leaders to accompany passage of the budget with a package of immediate cuts to programs such as Medicaid and the healthcare overhaul.

The committee's blueprint relies on eliminating healthcare subsidies and other coverage provided by the health law. It makes sharp cuts to Medicaid and reprises a plan devised by Ryan from years ago that would transform Medicare into a voucher-like program for future retirees.

It proposes work requirements for benefit programs such as food stamps, a gradual hike in the Medicare eligibility age to 67, and eliminating the Social Services Block Grant, which provides flexible grants to states for services to the poor. It proposes requiring federal workers to pay greater contributions into their pension plans and would scale back student loan subsidies.

A deteriorating fiscal picture, caused in part by tax cuts made permanent last year, required Budget Committee Chairman Tom Price, R-Ga., to propose deeper cuts than Republicans ever have before.

Actually implementing the cuts would require follow-up legislation, something Republicans have never attempted, in great part because it would be futile so long as Obama occupies the Oval Office — and not worth the political tumult that would be involved. But it sets a template for what a GOP-controlled Congress might seek to cut if a Republican retakes the White House.

Price said his budget, which projects a balanced federal ledger with 10 years, would "prioritize the responsibilities of the federal government — like national security — and save and strengthen those programs that are critical to the health, retirement, and economic security of millions of Americans."

Democrats blasted the measure for finding the bulk of its $6.5 billion in 10-year savings from programs that help the poor and working class and for promising a tax overhaul that would substantially lower the top rate. The Center on Budget and Policy Priorities, a liberal research and advocacy group, calculates that programs for the poor, which make up 28 percent of domestic spending, would bear about 60 percent of the cuts in the House budget.

"It would decimate large swaths of the federal government," said Robert Greenstein, founder of the group. "It features particularly severe cuts in programs to help poor families and others of limited means."

The GOP plan would boost defense while calling for an almost 10 percent cut in domestic programs such as education, health research, and scientific research that are funded each year by Congress.

"This is a budget that divides Americans," said the committee's top Democrat, Rep. Chris Van Hollen of Maryland. "It continues to provide great benefits to folks who are already doing well in America. ... If you're at the very top of that economic ladder, if you're the top 1 percent, this is a great budget for you."

The annual budget debate gives lawmakers a chance to weigh in on the nation's financial picture. The government borrows about 16 cents of every dollar it spends and faces a potential debt crisis at some point if Washington's bickering factions don't address the problem.

But as in past years, GOP leaders have no plans to put in place the severe cuts recommended by the nonbinding blueprint.

Instead, the main goal of the budget is to set in motion the annual appropriations process that produces the 12 spending bills that set agency operating budgets. That's the $1.1 trillion "discretionary" portion of the $4 trillion-plus federal budget that is passed by Congress each year.

The Senate may skip the budget debate altogether and instead go straight to the annual spending bills under a little-noticed provision added to last year's bipartisan deal that permits the shortcut.



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