The immediate action, Cantor said, should involve cuts to mandatory programs, which make up the largest portion of the budget and are not funded through annual appropriations. For such programs, the government is obliged to provide benefits to all who qualify regardless of the cost.
The biggest mandatory programs — often called “entitlements” — are Medicare, Medicaid and Social Security. But Cantor said negotiators could avoid the “big three,” which Democrats have vowed to defend, by focusing on changes in other areas. “If we can come to some agreement [and] act to effect those savings now, this year, it will yield a lot of savings in subsequent years,” he said.
At a breakfast for reporters hosted by Bloomberg News, Ryan echoed that view, saying, “We’re not going to get a grand-slam agreement . . . because of just the political parameters” set by Obama. But Ryan said his budget offers a “menu of options . . . that I think we could get that are not necessarily the global agreement on, say, Medicare or Social Security.” That menu includes proposals from Obama’s budget request, such as ending grants for worsted-wool producers and requiring graduate students to pay interest on college loans while they are still in school.
Other options would be less palatable to Democrats. Ryan has proposed slashing $127 billion from the food-stamp program, which was expanded during the recent recession. He has also suggested cutting contributions to federal worker pension plans and eliminating the new Consumer Financial Protection Bureau, a centerpiece of recent legislation overhauling financial regulations.
Still, the offer suggests that Republicans and Democrats are engaging in the same exercise, scouring the proliferation of debt-reduction plans in hopes of cobbling together enough mutually acceptable ideas to cut a deal.
As talks progress, Van Hollen said Democrats will insist on scrutinizing the tax code just as thoroughly. One fat target for savings, he said, is tax breaks for major oil producers. “We still want the overall approach to be a balanced one” that does not focus just on spending cuts, he said.
Cantor dismissed tax hikes as a “non-starter,” saying raising taxes without changes to the big entitlement programs would simply delay the day of reckoning.
“We want to be there with a safety net for people who need it. But what we’ve seen over the years is a country that has turned much more into an entitlement country for people who don’t need it,” Cantor said. “That is the fundamental question at stake here.”
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