“The president has ducked responsibility. He has punted again,” House Budget Committee Chairman Paul Ryan (R-Wis.) told reporters, saying the blueprint would lead to “America drowning in debt” and “slower economic growth” because of increased federal government borrowing. “It’s a political plan for the president’s reelection.”
House Speaker John A. Boehner (R-Ohio) called Obama’s proposal “a gloomy reflection of his failed policies of the past, not a bold plan for America’s future” and promised that Ryan would soon offer “an honest budget” that would control future debt, most likely through a version of Ryan’s controversial plan to reshape Medicare.
Democrats hailed the plan’s provisions that call for increased spending on infrastructure and education initiatives, the sort of proposals they think can boost job growth and the economy.
“The fastest and most effective way to reduce our deficit is to put Americans back to work,” Rep. Chris Van Hollen (Md.), the ranking Democrat on the Budget Committee, said in a statement.
Van Hollen praised the continued effort by the White House to allow George W. Bush-era tax cuts to expire on the top 2 percent of income earners, a proposal that would bring in about $1 trillion in new revenue over the next decade.
“We must all share responsibility as we work to reduce our debt and deficit,” he said.
With Republicans controlling the House and Democrats in charge of the Senate, the chance of Congress approving its own budget for next year is small. In writing the budgets for federal agencies, lawmakers will instead work off of a top figure of $1.047 trillion for 2013. That amount was agreed to in an August compromise that allowed Obama to increase the federal debt ceiling beyond $15 trillion in exchange for $2.1 trillion in spending cuts over the next decade.
The battle lines this year are not expected to be drawn in the halls of Congress but in November’s presidential and congressional elections. Republicans expect to rally around Ryan’s plan for fiscal austerity, combined with extending the Bush tax cuts, while Obama and Democrats will call for some increased spending matched with higher taxes on the wealthy.
Waiting in the wings is a combination of $5 trillion in tax increases and spending cuts that will kick in if the president and Congress cannot reach a deal. The 2001 and 2003 tax cuts, as well as other key tax-relief items, are set to expire Jan. 1, resulting in a tax increase of about $4 trillion. The next phase of the August debt deal is a $1.2 trillion reduction in federal spending, spread evenly among military and domestic budgets, that will be phased in starting in January.
Some think that a post-election lame-duck session could produce a deal to avert what is likely to be a politically disliked course of tax increases and spending cuts to popular programs. For now, the two sides are jousting about the efficacy of the fourth budget outline of Obama’s presidency.
Ryan and Sen. Jeff Sessions (Ala.), the ranking Republican on the Senate Budget Committee, said they think that Obama’s overall tax increases will be a proposed $1.9 trillion and that no lasting changes will be made to the entitlement programs that are expected to devour much of the federal budget in the next few decades. Ryan mocked Obama for not embracing a presidential commission’s modest but controversial proposals for Medicare and Social Security.
“We have a debt crisis on the horizon, it’s obvious. . . . He’s outsourced leadership to committees and commissions, only to disavow those committees and commissions,” Ryan said.
Said Van Hollen: “We must do it in a responsible way. The president takes a balanced approach to deficit reduction, but Republicans continue to insist on ending the Medicare guarantee and slashing vital investments in education, while giving tax breaks and sweetheart deals to the super wealthy.”
Some remained optimistic that a major compromise could be had.
“The only true way forward is through a comprehensive and balanced deficit-reduction agreement. We need to come together on a plan that modernizes our tax system, reforms our entitlement programs and attacks wasteful spending,” said Senate Budget Committee Chairman Kent Conrad (D-N.D.). “President Obama has demonstrated that he wants to reach such an agreement. Now others are going to have to be willing to step up and be part of the solution.”