Senate Democrats on Wednesday unveiled their first budget plan in nearly four years, a proposal that sets up a lengthy fight with Republicans over the two parties’ stark differences on taxes, spending and the future of Medicare.
The Democratic plan, which Republicans instantly criticized, would reduce deficits by $1.85 trillion over 10 years and would replace the recent automatic spending cuts, called the sequester, with higher taxes and a different spending-reduction plan.
The struggle over ways to reduce the nation’s $16.7 trillion debt, and the trillions likely to accumulate in the future, dominated talk and debate all over Capitol Hill on Wednesday.
The mood was both tense and intense. At the Capitol, President Barack Obama met with House of Representatives Republicans. Upstairs, senators were rejecting, by 52 to 45, a Republican bid to take away funding for Obama’s health care plan, at least the 34th time that Congress has tried to end it.
In a nearby office building, Republican budget writers began crafting a 10-year deficit-reduction plan that Democrats disliked. Not far away, the Democratic-run Senate Budget Committee was countering with its own blueprint.Obama’s session with House Republicans was seen as the most crucial of his four meetings this week with different congressional caucuses. Republicans have run the House since 2011, and many were elected by expressing strong opposition to his fiscal and health care policies.
House Speaker John Boehner, R-Ohio, described the meeting, which covered a wide variety of topics, as “a frank and candid exchange of ideas.”
But, he warned, “there are some very real differences between our two parties, like issues: jobs, balancing the budget and what do we do to get our economy moving again. Republicans want to balance the budget. The president doesn’t. Republicans want to solve our long-term debt problem. The president doesn’t.”
Rank-and-file Republican members want Obama to offer a budget that would be in balance in a decade, as the Republicans have done.
“If you’re not going to have a 10-year time frame for a budget that ever balances, I don’t think that’s responsible,” said Rep. Greg Walden, R-Ore.
Walden did find the meeting cordial. “There was a pretty positive discussion about the need to address these entitlement programs. He said he’s for doing that,” Walden said.
Rep. Michael Grimm, R-N.Y., agreed, but like others he thought Obama was more concerned with helping Democrats get elected than with taking tough steps to reduce the debt.
“Republicans remain skeptical that the president looks at everything through a political optic to gain advantage in 2014,” Grimm said. “We need action. Words are great. But this was a step in the right direction.”
In the Senate, Democrats began a renewed push for a budget, after balking at such action for years. They’d been concerned that such a plan would become valuable ammunition for Republicans in the 2010 and 2012 elections. Budget plans are supposed to be road maps for the legislation that sets spending for government agencies and programs.
Republicans in recent months have turned the lack of a plan into a Democratic embarrassment, so Budget Committee Chairwoman Patty Murray, D-Wash., acted on Wednesday.
“It’s a balanced and fair approach,” Murray said of her plan, adding, “This budget keeps the promises we’ve made to our seniors, our families, our veterans and our communities.”
Republicans fought back. “It’s obvious why they refused to release one for so many years,” said Senate Republican leader Mitch McConnell of Kentucky.
Murray’s budget is short on details; those will be fleshed out later. She’d cut $975 billion from expected spending while raising an equal amount in revenue.
The revenue would come from “closing loopholes” and cutting “unfair” tax breaks “for those who need it the least,” Murray said, “while locking in tax cuts for the middle class and low-income working families.”
The plan would include a legislative device called reconciliation that would make it easier to approve such changes.
Sen. Charles Grassley, R-Iowa, scoffed at the proposal. “There is nowhere near $1 trillion in loopholes,” he said.
The spending cuts would include $493 billion from domestic spending – including $275 billion in health care savings – and $240 billion from defense. Lower interest payments would save $242 billion.
The plan would add $100 billion in new spending to prod the economy, money that could be used for infrastructure repair, educational initiatives and other programs.
House Republicans were writing a very different budget Wednesday, without big revenue increases but with deeper spending cuts and a repeal of the 2010 health care law. They’d also change Medicare so that after 2024, seniors could get traditional Medicare or federal help for private insurance.
Murray made it clear that idea would go nowhere in the Senate. “We reject calls to dismantle or privatize Medicare” in that fashion, she said.
Anita Kumar contributed to this story.
By David Lightman and William Douglas