House Republicans threw down the gauntlet in an election year, offering today a counter to President Obama’s budget plan as Congress barrels toward an April 15 budget deadline — and the country plummets further into a deficit crisis.
“We’ve become a nation of net takers versus makers,” House Budget Committee Chairman Paul Ryan (R-Wisc.) said in his remarks on the 2013 Path to Prosperity at the American Enterprise Institute.
He called the escalating debt drama “the most predictable crisis we’ve ever had in this country.”
Ryan’s budget proposes $5.3 trillion in spending cuts over the next decade compared to the president’s budget, slashing the deficit to $797 billion next year as opposed to Obama’s $977 billion deficit projection. It wouldn’t wield the same budgetary ax against the Pentagon, and cuts debt as a share of the economy by 15 percent over the next decade. It repeals Obama’s healthcare law and introduces a competitive-bidding process to determine the growth of government’s financial contribution to Medicare.
It also proposes major tax reform to lower rates and broaden the base: Instead of the current six income tax brackets, the GOP budget whittles the code down to two brackets of 10 percent and 25 percent. The corporate tax rate would be cut to 25 percent. It prevents $1.9 trillion in tax increases that would go into effect under the president’s plan.
Ryan said that bipartisanship support for simplifying the tax code, cutting spending and overhauling soon-to-be-bankrupt Medicare — a plan he has worked on with Sen. Ron Wyden (D-Ore.) — is only growing.
“We are seeing a situation where an emerging consensus is there, but it’s not to be gotten with the current leadership in place,” Ryan said.
The new budget essentially mirrors the 2012 Path to Prosperity but with some provisions pushed by Democrats in Congress, including Wyden’s premium support model for Medicare and other tax reform measures including removing loopholes.
The White House was not one of those partners in consensus. In a statement this morning, Communications Director Dan Pfeiffer predictably blasted the Republican plan as not abiding by its fairness doctrine.
“The House budget once again fails the test of balance, fairness, and shared responsibility. It would shower the wealthiest few Americans with an average tax cut of at least $150,000, while preserving taxpayer giveaways to oil companies and breaks for Wall Street hedge fund managers,” Pfeiffer said. “What’s worse is that all of these tax breaks would be paid for by undermining Medicare and the very things we need to grow our economy and the middle class – things like education, basic research, and new sources of energy. And instead of strengthening Medicare, the House budget would end Medicare as we know it, turning the guarantee of retirement security into a voucher that will shift higher and higher costs to seniors over time.”
He accused Ryan of reaching for the same “wrong-headed theory” that led to the recession in the first place.
“The president believes we cannot return to a failed theory that didn’t lead to the growth of jobs, incomes, or the economy,” Pfeiffer said. “That’s why he put forward a balanced approach that reduces the deficit by over $4 trillion. It’s an approach that asks the wealthiest to pay their fair share, makes tough cuts to programs we can’t afford, and strengthens Medicare with reforms that would reduce overpayments to drug companies, improve the quality of care, and protect Medicare’s commitment to America’s seniors.”
The president was welcoming the Irish taoiseach to the White House for a St. Patrick’s Day celebration — which Ryan also went to after his AEI address — and had not yet commented on the proposal. Obama will be traveling to Nevada, New Mexico, Oklahoma and Ohio beginning tomorrow to promote his energy plan.
House Speaker John Boehner (R-Ohio) was quick to back up the Budget chairman, applauding Ryan for “putting together a budget worthy of the people we serve.”
“The national debt now exceeds the size of our entire economy, but the president is proposing more spending and higher taxes, while Senate Democrats haven’t passed a budget in more than 1,000 days,” Boehner said. “Far from ignoring our debt crisis, Republicans are again proposing responsible solutions to tackle it once and for all, including cutting spending, reforming our broken tax code, and strengthening health and retirement security. We also propose reversing the president’s policies that are driving up gas prices, and implementing an ‘all-of-the-above’ energy strategy to help address rising energy costs and create jobs.”
Knowing that presentation is as important as the message this year, Republicans rolled out the budget with a three-minute video featuring Ryan.
“Our plan takes power away from Washington and gives it back to the individual,” Ryan says in the video. “Because it’s the American people, not bureaucrats in Washington, who make this nation what it is.”
Congressional Democrats responded with a coordinated attack accusing Ryan’s budget of putting the country on a path to a government shutdown by reneging on the Budget Control Act, the agreement that brought an end to the crisis over raising the debt ceiling and created the super committee.
The Republican budget shields the Defense Department from some of the $487 billion in cuts brought on by sequestration. Six congressional committees, excluding Armed Services, are asked to find $261 billion in savings to help offset the automatic cuts triggered by the super committee’s failure.
Ryan proposed turning on budget reconciliation for the first time in six years to pre-empt sequestration.
“They have shown that a deal with them isn’t worth the paper it’s printed on and they are threatening families across America yet again with the prospect of a government shutdown,” Sen. Patty Murray (D-Wash.) said. “…This budget shows that they are more concerned with appeasing their extreme base than actually working with us to reduce the deficit.”
D.C. Delegate Eleanor Holmes Norton (D) criticized the budget for setting up a showdown by keeping House appropriators at $1.028 trillion in discretionary spending for FY 2013 while the Senate will keep at the higher $1.047 trillion level agreed to in the August debt-ceiling agreement.
“Six months away from the start of the fiscal year, the House Republican budget sets us on an ominous path,” Norton said.
“People have limits on credit cards,” Boehner fired back at Democrats in a press conference. “That doesn’t mean that you’re required to spend up to the limit, it just says you can’t spend any more than that.”
Any House budget plan is essentially DOA in the upper chamber, where senators have not passed a budget in more than three years.
“They have unanimously rejected the president’s budget,” noted Rep. Todd Young (R-Ind.). “Here again the House Budget Committee has tried to find common ground in our proposal, but we can’t participate in these discussions by ourselves. Others may have ideas that we could embrace, but we’ll remain at an impasse as long as they stay on the sidelines. Our country needs everyone at the table.”
At AEI, Ryan warned that if allowed to go through, Obama’s budget “will take down this economy.”
“The problem with the president’s budget is he raises these taxes but uses them to spend more money,” he said. “We should not be spending money we don’t have … and consigning our kids to an ugly future.”
Putting forth their budget alternative before the April 15 deadline is simply following the rule of law, he said.
“If we don’t like the direction the president is taking the country … then we feel we have the moral obligation and responsibility to show the country how we would do things differently,” Ryan said. “…We believe that Americans should make this decision, not some politicians in a super committee.”
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