Democrats are split over the federal budget; Republicans aren't

McClatchy NewspapersMay 11, 2011 

WASHINGTON — Democrats in Congress are torn over how to craft a federal budget, a dispute that could make it difficult for Washington's high-level deficit reduction talks to get much done anytime soon.

Democratic leaders are seeking an alternative to the Republican plan passed last month by the House of Representatives, but Senate Budget Committee Democrats have been unable to agree.

Liberals want a bold blueprint that spares social programs from big spending cuts and provides a sharp counterpoint to the GOP's proposal, which includes a dramatic revamping of Medicare and Medicaid.

"What we're dealing with is an extreme budget coming out of the House," said Sen. Bernard Sanders, a Vermont independent who caucuses with the Democrats.

But others in the party see significant spending cuts as necessary to get a deal with Republicans, who control the House and have enough votes to block any Senate Democratic plan.

Democrats also disagree on taxes. One group wants to impose more taxes on the wealthy and big corporations — particularly oil companies _while others are skittish about being tagged as tax-raisers. Sen. Ben Nelson, D-Neb., for example, wants no tax increases as long as the economy remains sluggish.

President Barack Obama met Wednesday at the White House with Senate Democrats and plans to meet there Thursday with Senate Republicans.

After their 90-minute meeting Wednesday, Senate Majority Leader Harry Reid of Nevada said of Democrats, "We are singing from the same hymnbook on the same page." Back at the Capitol, though, lawmakers said there was still disagreement over budget details.

Meanwhile, two bipartisan groups continue to seek a budget compromise: One led by Vice President Joe Biden, the other the "Gang of Six" senators — three Democrats and three Republicans.

Republicans are largely united. Most embrace the House plan, which would cut projected federal deficits by $4.4 trillion over 10 years without raising taxes while dramatically changing government health programs.

Democrats aren't buying that.

But they hold differing views on what to do about Medicare. The 46-year-old government health care program is expected to serve 48.5 million seniors and some disabled people this year. It's projected to grow at a 5.6 percent annual rate through 2021, far more than the economy is expected to expand.

While many Democrats rule out any changes to Medicare, some, including House Minority Whip Steny Hoyer of Maryland, are open to ideas.

"I don't want to get into means testing until we look at the specific proposals," he said. Means testing involves limiting benefits for wealthier beneficiaries, or taxing more of their benefits.

Hoyer argued that such changes are not necessarily radical.

"Generally speaking, we do, as you know, have certain means testing in both Medicare and in Social Security at this point in time, both through taxation on Social Security, and also the higher reimbursement for the first portions of Medicare ... so we have some degree of that," he said.

Democratic discussions focus on other specific programs as well. Sen. Mark Begich of Alaska, a Budget Committee member, said talks included "how far you can go on defense before really affecting readiness, and will we be cutting other programs too hard."

Some moderate Democrats, particularly those from oil-producing states, have expressed qualms over tax ideas being floated recently, notably the plan to slash breaks for the nation's largest oil companies.

"If you're going to ask me to stand here and pick on one industry that pays billions of dollars in taxes ... that hires 350,000 people in my state," said Sen. Mary Landrieu of Louisiana, "not only can I not vote for (hurting the industry), it's laughable."

The Senate Budget Committee had hoped to write a plan this week, but Chairman Kent Conrad, D-N.D., got a mixed reaction May 3 when he presented his ideas to Democrats in a closed meeting. The panel is now aiming to act next week.

"We're very close," said Sen. Ben Cardin, D-Md., a committee member. "We're not the Republican Party that moves in lockstep. Democrats don't have that type of discipline."

ON THE WEB

2010 Medicare/Social Security trustees' report

Social Security retirement calculator

National Commission on Fiscal Responsibility and Reform

House Republican spending cuts

President Obama's 2012 budget

target="_blank"Congressional Budget Office budget and economic outlook

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