House budget fight frames partisan lines for elections' big issue

McClatchy NewspapersMay 10, 2012 

— After hours of sharp, partisan debate Thursday that’s likely to be echoed around the nation this election year, the Republican-dominated House of Representatives approved, with no Democratic support, a federal budget plan that would slash popular domestic programs while sparing defense.

The partisan clash was a preview of the epic battle over federal spending and taxes that’s already the main issue in this year’s congressional and presidential elections. The GOP-authored measure, which passed 218-199, was an alternative to the estimated $110 billion in automatic reductions in domestic and defense programs scheduled to take effect Jan. 2 under the Budget Control Act enacted after last summer’s debt-ceiling debacle. All 183 Democrats participating voted no, and all but 16 Republicans voted yes.

The House measure is unlikely to pass the Democratic-led Senate, and the White House issued a veto threat, so it’s not going to be enacted. Any accord on an alternative to the automatic spending cuts is unlikely to be reached until after the November elections.

In the meantime, both parties are vowing to cut spending dramatically – and in the Democrats’ case, raise taxes on the wealthy, too – as centerpieces of their congressional and presidential campaigns. Their rival approaches to Thursday’s debate mirrored their campaign rhetoric.

“The bill’s unbalanced provisions fail the test of fairness and shared responsibility,” an Obama administration statement said. “At the same time as the House is advancing tax cuts that benefit the most fortunate Americans, (the bill) would impose deep budget cuts that cost jobs and hurt middle class and vulnerable Americans – especially seniors, veterans and children.”

President Barack Obama’s fiscal 2013 budget proposed to cut non-security domestic discretionary spending such as certain transportation and social service programs by $400 billion over 10 years. Such spending is expected to total about $450 billion this fiscal year.

He also has proposed a series of tax increases, including ending the George W. Bush-era tax cuts for people who earn more than $250,000 annually – which are due to expire at the end of this year – limiting deductions for the wealthy and imposing a higher tax rate on millionaires.

Presumptive Republican presidential nominee Mitt Romney, a former financial executive, proposes a very different approach. He’d push for a 20 percent across-the-board cut in income-tax rates, and an immediate 5 percent cut in non-defense discretionary programs He also would require federal agencies to show why the federal government – rather than states or the private sector – must provide a particular program or service, and would aim to reduce all federal spending to 20 percent of the gross domestic product by the end of his first term. It’s currently about 24 percent.

Before anyone is sworn into the presidency next January, though, Obama and Congress will confront the automatic cuts, part of last summer’s bitter negotiations that eventually allowed the federal debt limit to increase.

Both parties want to tinker with those cuts. Defense Secretary Leon Panetta has told Congress “it’s totally irresponsible” to proceed with the Pentagon reductions. Republicans agree. But the two parties differ sharply on what to do. The House Republican plan would cancel coming Pentagon cuts, and would compensate for that by cutting more deeply into domestic programs.

Those reductions would involve programs Democrats long have championed. Food-stamp benefit eligibility would be tightened. Medicaid, the joint state-federal health program for the poor, would be cut. Regulators’ authority to close ailing financial firms would be curbed. Social service grants would drop, and job-training programs would be consolidated.

No one is trying to be cruel, argued House Budget Committee Chairman Paul Ryan, R-Wis. Republicans just want to slow the programs’ projected growth. “If we can’t have a civil debate about slowing the rate of spending,” he said, “we’ll never get this under control.”

He also delivered what’s become a refrain for Republicans: “The sequester (automatic cuts) is not good government. We thought the purpose of sequester was that Congress isn’t governing,” he said, so Republicans are trying to do so.

Majority Leader Eric Cantor, R-Va., drove the point home: “The president and his party seem to be choosing to sit idly by and let the devastating cuts in the sequester take effect, rather than putting forward a plan of their own or supporting ours,” he said.

But he was incorrect, and Democrats were angry about it.

The Democrats had crafted their own plan, but House GOP leaders wouldn’t allow it to come to a vote, saying the proposal wasn’t in compliance with a House rule. The Democrats would have saved an estimated $116 billion, with more than two-thirds of it coming from higher taxes on millionaires, ending some tax breaks for big oil and cutting agriculture subsidies. The rest would come from spending reductions.

Rep. Sheila Jackson Lee, D-Texas, called the GOP plan “oppression.”

“We agree the automatic, indiscriminate meat ax cuts . . . are the wrong way to reduce the deficit. We need a responsible alternative,” said Rep. Chris Van Hollen, D-Md., the Budget Committee’s top Democrat. It makes sense, he said, to close tax loopholes and raise taxes on millionaires. But, he said, Republicans want a “lopsided approach” that cuts spending but offers no tax increases.

Without more revenue, “your budget has to whack everyone else, and that’s what they did,” Van Hollen said.

email: lightman@mcclatchydc.com: Twitter:@davidlightman

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