The Republican-controlled U.S. House of
Representatives adopted a dramatic 2012 budget plan that would cut
the country's debt by revamping the decades-old system that
guarantees medical insurance for Americans over 65 and to the poor
and disabled.
The plan put forward by Republican Rep. Paul Ryan, the budget
committee chairman, is at odds with a spending vision President
Barack Obama outlined earlier this week, which foresees tax
increases for high-income Americans while holding the line on those
major social contract programs.
With the 2012 presidential election campaign already under way,
Obama and his Democrats are locked in an ideological confrontation
with Republicans, especially a nearly 90-strong first-year class in
the House of Representatives that is allied with the
ultraconservative tea party movement. Their victory in November,
under the flag of cutting government spending and intrusion into the
lives of Americans, gave Republicans control of the House. That set
in place a divided government that has forced Obama to accept
compromises on spending and taxation that have angered the liberal
wing of his Democratic Party deeply.
The U.S. debt, in relation to the size of the American economy,
has reached alarming proportions. Republicans in particular are
pounding the issue, which they say endangers the country's domestic
well-being and its ability to influence world affairs. Most
Democrats also accept the need to cut spending but cannot swallow
what they see as the draconian Republican approach.
In an Associated Press interview Friday, Obama said the
Republican approach would mean "We would have a fundamentally
different society than we have now."
Beyond that, Obama said, "Literally, we couldn't afford to fix
the roads in the country under their budget."
The House pproved the Ryan plan just a day after Congress
adopted legislation that cut $38.5 billion out of the national
budget for the remaining 4 1/2 months of 2011. That money was cut
from spending for U.S. government agencies and amounts to only about
12 percent of total government outlays.
The White House said riday that Obama had signed the short-term
spending extension.
The Republican spending outline for the next fiscal year,
beginning Oct. 1, calls for cuts of $5.8 trillion over 10 years. It
would reduce tax rates for corporations and the wealthy, and
eliminate various tax loopholes.
The measure, a nonbnding blueprint that sets a theoretical
framework for future legislation, also would dramatically cut
Medicaid, the medical insurance program for the poor and disabled,
and transform it into a grant program run by the states. It does not
touch Social Security, the national pension system, or immediately
cut Meicare.
It does, however, call for transforming Medicare into a system
under which the government provides future retirees with vouchers to
buy private insurance plans. People now 55 and over would stay in
the current system, but younger people would receive the insurance
subsidies. Economists say those vouhers would lose value over time
because they would not keep pace with fast-rising medical costs.
Obama's plan, outlined earlier this weeks calls for cutting the
federal deficit by $4 trillion over 12 years by eliminating health
care fraud, raising taxes on the wealthy and paring defense
spending.
He sid Ryan's proposal would slash health care coverage to 50
million Americans, including grandparents needing nursing home care,
children with autism and kids "with disabilities so severe that
they require 24-hour care. These are the Americans we'd be telling
to fend for themselves."
Medicare, Medicaid, Soial Security and defense spending account
for about 80 percent of the American federal budget.
Another huge spending fight awaits this summer after the United
States Treasury hits its $14.3 trillion borrowing cap on May 16.
That upper limit on borrowing has been increased with little fanfare
10 times in the past decade. But House Republicans, under heavy tea
party pressure, now are threatening to vote no unless the debt limit
increases also includes further and deep spending cuts.
The Treasury Department has warned that failure to raise it by
midsummer would drive up the cost of borrowing and destroy the
economic recovery. Some economists predict even a limited U.S.
default on its debt could produce global economic chaos.
In the current year, the U.S. is forecast to incur a $1.5
trillion deficit, raising total national debt to nearly $15
trillion.
