By JONATHAN WEISMAN
House Republicans laid out a blueprint for a dramatically smaller federal government Tuesday, diminishing Washington’s role in health care and other areas in a budget they said would spend $6.2 trillion less over 10 years than what President Barack Obama has proposed.
The plan by House Budget Committee Republicans, entitled “The Path to Prosperity,” lays down a new marker in the fight over spending and deficits between House Republicans and the White House and Senate Democrats.
“This budget will move our nation from an era of debt and doubt and despair to a stable and secure future,” said Rep. Tom Price (R., Ga.), a leader of House conservatives.
Under the House GOP plan, authored by House Budget Committee Chairman Paul Ryan (R., Wis.), the government would still add $5 trillion to the federal debt through fiscal 2021. It says that is less, however, than the $9.4 trillion Mr. Obama’s budget would add to the debt over that period. The debt currently tops $14 trillion.
The Republican plan wouldn’t balance the budget until the late 2030s. Mr. Ryan conceded balance could be reached faster with tax increases, but he said that would slow economic growth and damage U.S. competitiveness.
The plan would transform almost every corner of the budget but defense, which emerges largely unchanged. People who retire after 2021 would no longer have access to Medicare as a government-run, fee-for-service health care program.
Instead, these retirees would choose from a menu of private insurance plans, which would be reimbursed by the government at a level that wouldn’t rise each year as quickly as health-care costs are expected to.
John Rother, the chief lobbyist for the seniors group AARP, called the plan “indefensible,” saying the changes to Medicare would shift an intolerable burden to senior citizens.
“They essentially end Medicare as we know it,” said Rep. Chris Van Hollen of Maryland, the budget committee’s top Democrat. “They don’t reform it. They deform it.”
The federal portion of Medicaid, the health-care program for the poor, would be converted to a block grant to states, which would shrink over time, saving $750 billion over the next 10 years from projected costs.
The plan would convert the federal food stamp program to block grants, with eligibility contingent on holding a job or entering job training. It would eliminate the federal housing giants Fannie Mae and Freddie Mac,trim the federal work force by 10%, freeze federal worker pay through 2015 and raise their contributions to their retirement plans. The budget would also cut Pell grants back to the 2008 levels, and require Congress and the president to formulate a bipartisan plan to put Social Security on a long-term, sustainable path.
Under the plan’s strict spending caps, environmental spending would drop over the next decade from $40 billion annually to $26 billion. Transportation spending would fall from $85 billion annually to $69 billion.
The document instructs the House Ways and Means Committee to consolidate individual income tax brackets and lower the top rate from 35% to 25%, while eliminating or trimming enough tax loopholes to maintain current tax revenue. The corporate tax rate would also fall to 25% from 35%.
A bipartisan group of senators continues to negotiate a deficit-reduction agreement based on President Barack Obama’s debt commission. That panel envisioned less-dramatic domestic spending cuts, mitigated by more defense cuts and some increases in tax revenue.
Erskine Bowles, the co-chairman of the debt commission, said no deal could be done unless both parties agreed to sacrifice some of their priorities. By protecting defense and tax cuts, the Ryan plan moves away from that idea, he said.
“If you’re going to get bipartisan support, there’s going to have to be shared sacrifice in every corner of the budget,” he said.
Write to Jonathan Weisman at firstname.lastname@example.org
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