Simpson-Bowles Plan Rejected By House
WASHINGTON — The House voted decisively late Wednesday to reject a bipartisan budget mixing tax increases with spending cuts to wring $4 trillion from federal deficits over the coming decade.
The 382-38 roll call paved the way for Republicans to muscle through their own, more stringent budget on Thursday, a measure that would blend deeper spending reductions in safety-net programs for the poor with a plan to dramatically overhaul Medicare. The vote also underscored the partisan polarization dominating Washington this election year, with leaders of both parties showing little inclination to compromise and let the other side claim a victory.
The bipartisan measure rejected Wednesday was patterned on a plan by President Barack Obama's 2010 deficit commission and was written by moderate Reps. Steve LaTourette, R-Ohio, and Jim Cooper, D-Tenn.
"This is the only bipartisan way to solve the nation's problems," Cooper said.
"When you know you have a good deal is when the left and right are pounding the snot out of you, and that's what's happening today," LaTourette said.
House Budget Committee Chairman Paul Ryan, R-Wis., was the only lawmaker to speak against the plan, saying it relied too heavily on tax increases and not enough on spending cuts.
The plan won praise from outside budget experts. But GOP leaders have been unwilling to stray from party principles on taxes while top Democrats have shown no give on cuts to social programs.
The bipartisan alternative was similar to a proposal crafted by former White House chief of staff Erskine Bowles, a Democrat, and former GOP Sen. Alan Simpson of Wyoming, co-chairmen of Obama's deficit commission, whose package ended up being ignored by lawmakers.
The measure, like the Simpson-Bowles plan, called for a tax overhaul that would bring the top tax rate down from 35 percent to 29 percent or lower, financed by repealing various tax breaks, deductions and credits. Overall revenue would rise by $1.2 trillion since the money raised by eliminating dozens of tax breaks would exceed the revenue lost by lowering rates.
The vote came shortly after the Republican-run chamber unanimously rejected Obama's $3.6 trillion budget for next year in a roll call forced by GOP lawmakers to embarrass Democrats.
Republicans have opposed Obama's budget all year, criticizing its tax increases on the wealthy and saying it lacks sufficient spending cuts.
Democrats have defended Obama's budget priorities but voted "no" as a bloc Wednesday night as the House rejected the president's plan 414-0.
Republicans said Democrats were afraid to vote for Obama's proposed tax increases and extra spending for energy and welfare. Democrats indicated they were worried that voting for Obama's budget would let Republicans accuse them in re-election campaigns of endorsing every part of it, including details they might oppose.
The House also rejected a plan by the Congressional Black Caucus, 314-107, that was more generous than Republicans to many domestic programs.
At the center of Wednesday's debate, however, was a budget-slashing GOP plan by Ryan that would quickly bring the deficit to heel but only through unprecedented cuts to programs for the poor such as food stamps, Medicaid, college aid and housing subsidies. The Republican budget also reprises a Medicare plan that would switch the program – for those under 55 today – from the traditional framework in which the government pays doctor and hospital bills to a voucher-like approach in which the government subsidizes purchases of private health insurance.
The GOP plan was set to pass on Thursday, but swiftly die in the Democratic-controlled Senate. Under the arcane budget rules of Congress, the annual budget resolution is a far-reaching but nonbinding measure that sets the parameters for follow-up legislation.
The measure reopens last summer's hard-won budget and debt deal with Obama, imposing new cuts on domestic agencies while easing cost curbs on the Pentagon that gained bipartisan support just months ago. It would set in motion follow-up legislation that would substitute $261 billion in spending cuts spaced over a decade for $78 billion in automatic spending cuts that would cut the Pentagon budget by about 10 percent next year and cut numerous domestic programs as well.
The election-year GOP manifesto paints clear campaign differences with Obama, whose February budget submission offered tax increases on the wealthy but mostly left alone key benefit programs like Medicare, Medicaid and food stamps. Obama and his Democratic allies instead promise to protect programs aimed at the elderly and the poor.
Ryan said the GOP plan steps in aggressively to prevent a European-style debt crisis that would swamp the economy and force draconian spending cuts and tax increases.
"Let's not wait until we have a crisis. Let's not wait until interest rates go up and we're in sort of a European meltdown mode," Ryan said. "Let's do it right and do it now, because then we can keep the promises that government has made to people who need it the most."
But Democrats said the Ryan plan makes spending cuts that are simply too extensive, knocking millions of people off of food stamps and forcing states to drop Medicaid nursing home coverage for many elderly people. At the same time, Democrats said the GOP budget promises a radical overhaul of the tax code that would deliver big tax cuts to upper-income people while taking away tax deductions and credits important to the middle class and the poor, like the child tax credit, and deductions for health insurance, mortgage interest and contributions to charity.
Democrats say the GOP Medicare proposal, similar to a plan that started a political firestorm last year, would cut costs steeply and provide the elderly with a steadily shrinking menu of options and higher out-of-pocket costs.
"It is not bold, not bold to provide tax breaks to millionaires while ending the Medicare guarantee for seniors and sticking them with the bill for rising health care costs," said Maryland Rep. Chris Van Hollen, the top Budget Committee Democrat. "It is certainly not brave to cut support for seniors in nursing homes, individuals with disabilities and poor kids. And it is not fair to raise taxes on middle-income Americans, financed by another round of tax breaks for the very wealthy."
Compared with Obama's budget, the GOP measure includes deficit cuts totaling $3.3 trillion – spending cuts of $5.3 trillion tempered by $2 trillion in lower taxes – over the coming decade. The deficit in 2015, for example, would drop to about $300 billion from $1.2 trillion for the current budget year. But the GOP measure – despite assumptions of major cuts to transportation, education and food aid – doesn't achieve balance for almost three decades, leading conservatives to offer an even tougher plan that would come to balance in five years.
The GOP measure is likely to pass almost exclusively with GOP votes, though some tea party lawmakers will oppose it for not going far enough.
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Associated Press writer Alan Fram contributed to this report.
Earlier on HuffPost:
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ANDREW TAYLOR 03/28/12 11:01 PM ET Associated Press