Republicans pushed legislation through the House on Wednesday to prevent a government shutdown this month while easing the short-term impact of $85 billion US in spending cuts — at the same time previewing a longer-term plan to erase federal deficits without raising taxes.
President Barack Obama pursued a different path as the GOP asserted its budget priorities. He arranged to have dinner with several Republican senators at a hotel near the White House in search of bipartisan support for a deficit-cutting approach that includes the higher taxes he seeks as well as savings from Medicare and other benefit programs that they stress.
Any such compromise talks are unlikely to yield fruit for months, if then, although Wisconsin Rep. Paul Ryan, the author of the House Republican budget plan, expressed hope that some progress across party lines might be possible later in the year.
"I think this whole thing will come to a crescendo this summer, and we're going to have to talk to each other to get an agreement about how to delay a debt crisis, how to save this country from a fiscal train wreck that's coming," said Ryan, who was the Republicans' vice-presidential candidate last year. He added that he had spoken with Obama in recent days, but he declined to provide details.
For now, the divided government's immediate objectives are to prevent a shutdown of federal agencies on March 27, at the same time lawmakers and the White House look for ways to ease the impact of across-the-board spending cuts that kicked in less than a week ago.
The legislation that cleared the House on a bipartisan vote of 267-151 would do both, ensuring funding through the Sept. 30 end of the budget year while granting the Pentagon and the Department of Veterans Affairs greater flexibility in implementing their share of short-term spending cuts.
"This is all about whether or not we shut down the government. This is a bill to keep the government operating," said Rep. Hal Rogers, the Kentucky Republican who chairs the House appropriations committee.
Minority Democrats appeared torn between a desire to support legislation to keep the government open and their goal of replacing at least half of the spending cuts with provisions to increase revenue.
"Instead of closing tax loopholes for corporate jets, they want to cut four million meals on wheels," the party's House leader, Rep. Nancy Pelosi of California, said of Republicans.
The bill passed with the support of 53 Democrats, more than a quarter of those voting.
'This is all about whether or not we shut down the government.' — Republican Congressman Hal Rogers
It now goes to the Senate, where Democrats and the White House are deep in negotiations with Republicans on changes that would give the Department of Homeland Security and other domestic agencies the same type of flexibility in administering the spending cuts that the Pentagon would receive.
Obama's dinner with Senate Republicans stemmed from a suggestion he made during a conversation recently with GOP Sen. Lindsey Graham of South Carolina, according to a presidential aide. It also served as prelude to at least two trips to the Capitol in coming days as the chief executive meets with the rank and file of both parties in both houses.
The spending legislation was still pending on the House floor when Ryan began pulling back the curtain on his plan to eliminate deficits in 10 years. The government ran a deficit of more than $1 trillion for the past budget year, about $200 billion less than the year before, and the total federal debt is about $16 trillion.
Ryan OK with tax hikes
To achieve his 10-year goal of producing a surplus, Ryan said he would incorporate the tax increases on the wealthy that Congress passed on Jan. 1 over the objections of many House Republicans. The hike translates into an estimated $600 billion or more in additional revenue to the government.
The Wisconsin Republican also intends to retain the $85 billion in spending cuts, which translate to a savings of $900 billion or more over a decade, and renew without significant changes a controversial proposal to overhaul Medicare.
"We're making additional modest changes to get to balance," he said,
Ryan had earlier floated the possibility of accelerating his Medicare proposal so it would apply to individuals currently older than 55.
Under pressure from some members of the rank and file, he decided against that — but drew criticism during the day from Democrats anyway.
'Instead of closing tax loopholes for corporate jets, they want to cut four million meals on wheels.' — Democratic House Leader Nancy Pelosi,
"Every time they put in a budget, the first thing they do is ask seniors to sacrifice the most," said Rep. Steve Israel of New York, who heads the Democrats' campaign committee.
Ryan's Medicare plan would give future retirees a choice between enrolling in the existing program or a roster of private alternatives, although in any case they would receive a monthly cheque from the government to defray the cost and be responsible for the difference.
In its previous forms, the plan also capped the overall cost of the program.
Republicans say change is necessary in order to rescue Medicare from financial ruin as members of the post-Second World War baby-boom generation retire in large numbers. Democrats contend the plan would effectively end the guarantee of health-care coverage that Medicare embodies by exposing seniors to prohibitively large cost increases.
Obama has proposed roughly $400 billion in savings over a decade from health-care benefit programs, much of it from Medicare, but he has consistently rejected Ryan's approach.
Senate Democrats are drafting their own budget, expected to be made public next week. Officials have yet to say how large a deficit it envisions in a decade, but it will differ in significant ways from the Republican approach.
Sen. Patty Murray of Washington, the budget committee chair, has said she will replace the across-the-board cuts with a blend of spending reductions and tax increases, an approach Obama favours.
Other Democrats say she will follow Obama's lead on Medicare, setting up a contrast with Republicans that her party hopes to exploit in the 2014 elections.
Obama's own budget has been delayed repeatedly this year, and it is not clear whether he intends to release it before the House and Senate hold their debates this month.
If the administration waits until April, it could avoid certain embarrassment at the hands of Republicans. It is a ritual of budget politics for the party out of power in the White House to demand a vote on the president's budget, knowing it will fail, sometimes ignominiously.