CQ TODAY ONLINE NEWS
July 20, 2011 – 9:44 p.m.
GOP Budget Chief Critiques ‘Gang of Six’ Plan
By Paul M. Krawzak and John M. Donnelly, CQ Staff
The budget plan put together by the “Gang of Six” has plenty of elements that politicians might like. It reduces the deficit by $3.7 trillion over 10 years. Its shows a willingness by Congress to take on spending of all kinds, from defense to entitlements. It has a broad sweep and a bipartisan flavor at a time when the public views Congress as unimaginative and divided.
But whatever budget deal comes out of these weeks of negotiations must make it through the Republican-controlled House. And there, the chamber’s chief voice on budget matters, having had a day to absorb the gang’s new proposal, showed general disapproval. Budget Chairman
Committee Republicans did praise the gang proposal for recommending lower tax rates, spending caps and changes in medical malpractice laws. And Ryan said the plan has “potential for worthwhile budget and tax reforms.” These comments, as well as support in principle from some Democrats, including President Obama, suggest that elements of the plan could be incorporated into a broad deal down the road.
But without an endorsement from Ryan, the plan could have difficulty in the House, where fiscal conservatives are clamoring for deep spending cuts and other fiscal restraint to reduce the nation’s reliance on borrowing.
They want a major package of spending cuts to be attached to any increase in the $14.3 trillion debt limit. And the Gang of Six plan does not include a debt-limit increase, so that would have to be tied in somehow.
The Pentagon Plays Defense
Ryan’s analysis has already raised a red flag for at least one powerful voting bloc in the House GOP: supporters of the Pentagon. The chairman of the House Armed Services Committee, in a memo Wednesday to fellow Republicans on the panel, said he could not accept the Gang of Six’s proposed cutbacks in defense spending.
“It is our belief that this proposal raises serious implications for defense and would not allow us to perform our constitutional responsibility to provide for the safety and security of our country or keep faith with men and women in uniform,” McKeon wrote to his Armed Services colleagues.
“In its current form, I cannot support the Gang of Six proposal,” he added.
The Tax Issue
The six senators have created some confusion by saying in a summary of the plan that it would generate more than $1 trillion in additional revenue over a decade at the same time that it would be scored by the Congressional Budget Office as cutting taxes by $1.5 trillion over that period.
The House Budget Committee said it appears the plan would raise revenue by $2.8 trillion. That calculation is based on a $3.5 trillion revenue increase generated by not extending the George W. Bush-era tax cuts when they expire at the end of 2012, as well as including $800 billion in tax increases from the new health care law, the committee said. That equals $4.3 trillion in increased revenue.
GOP Budget Chief Critiques ‘Gang of Six’ Plan
When the estimated $1.5 trillion in tax relief is subtracted, a $2.8 trillion tax increase is left, the committee said.
Senate Budget Chairman
“Now I’ve just learned that some House Republicans are claiming it’s a $2.8 trillion tax (increase), and $800 billion of what they’re talking about is that we did not end the revenue portions of the health care reform act and they’re now attributing that to this plan,” Conrad said. “I mean, goodness gracious, you talk about making things up out of whole cloth. That would be it.”
The House Budget Committee said spending cuts in the plan are elusive, while it does little to restrain the growth of entitlement spending.
A GOP aide to the committee, speaking on background, said failure to address what he called the unsustainable growth of Medicare and Medicaid spending, not tax policy, is the chief obstacle to a debt limit deal.
“Leading Democrats jammed into law a partisan health care overhaul that has compounded the worst problems in health care, weakened our economy and accelerated out-of-control government spending, which is bankrupting the country. Democrats’ unwillingness to engage in an honest debate on health care spending — despite the fact that such spending remains the key driver of our debt — demonstrates a clear lack of seriousness,” he said.