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Two sides still far apart in budget proposals

House Republicans unveil a plan that resembles one Democrats dismissed last year. Senate Democrats offer a counterproposal, but it doesn't balance the budget.

March 12, 2013|By Lisa Mascaro and Michael A. Memoli, Washington Bureau
  • House Budget Committee Chairman Rep. Paul D. Ryan (R-Wis.), in back, unveils the GOP budget proposal.
House Budget Committee Chairman Rep. Paul D. Ryan (R-Wis.), in back, unveils… (Jim Lo Scalzo / European…)

WASHINGTON — Despite President Obama's overtures to renew talks on a broad budget deal, Democrats and Republicans remained as far apart as ever Tuesday in their proposed solutions to the nation's deficit woes.

Just before Obama arrived for the latest installment of his Capitol Hill charm offensive, House Republicans, led by Rep. Paul D. Ryan of Wisconsin, unveiled an austere budget proposal that looks a lot like one they approved last year that Democrats quickly dismissed.

Republicans revived plans to overhaul Medicare, slash the social safety net for the poor and bolster defense — all while lowering corporate and individual tax rates to no more than 25%.

The Ryan blueprint promises to achieve the party's ambitious goal of balancing spending and revenue in 10 years, a once-unimaginable accomplishment. Ryan's task was made easier with the improved budget outlook from the "sequester" cuts, which took effect March 1, and the New Year's tax increases on the wealthy, which Republicans opposed. Ryan includes those in his budget calculations but would replace both of them with his proposals.

Ryan also counts taxes and savings from the president's healthcare law, while promising to repeal it.

As the GOP's top budget thinker and its 2012 vice presidential nominee, Ryan acknowledged that he and Mitt Romney lost the election after running on these principles.

But Republicans believe Americans are ready for the GOP's tough-love approach to reining in deficits.

"The election didn't go our way. Believe me, I know what that feels like," said Ryan, surrounded by more than a dozen Republican colleagues. "That means we surrender our principles? That means we stop believing in what we believe in?"

Obama quickly rejected the GOP approach, saying it was more important to boost the economy than balance the budget. Ryan's budget achieves balance "on the backs of the poor, the elderly, students who need student loans, families that have disabled kids," the president said in an interview with ABC News scheduled to air Wednesday.

Senate Democrats, meanwhile, sitting down to lunch with the president, offered a counterproposal that would raise nearly $2 trillion toward deficit reduction, with equal parts coming from taxes and spending cuts. But their plan does not balance the budget for the foreseeable future.

Obama fielded questions from his sometimes-skeptical allies for more than an hour. When Senate Majority Leader Harry Reid of Nevada offered him a chance to duck out, the president chose to stay.

"He says that working together with Republicans, in terms of getting a grand bargain or a major dent in this issue, is critically important," Sen. Carl Levin (D-Mich.) said. "But compromise is essential, and he hasn't seen enough of it from them yet."

Liberal senators pushed back against proposals Obama made in talks with Republicans to trim cost-of-living adjustments for Social Security, veterans and others.

The president told them it was an "ongoing discussion," two senators said.

"We're not willing to go so far as to negotiate away our principles and what we think is best," Sen. Tom Harkin (D-Iowa) said. "We're just not."

With neither the House nor the Senate budget proposal expected to win approval in the opposite chamber, the parties are on a slow-motion collision course. This summer, they will need to find agreement as part of a deal to raise the nation's legal debt limit or risk defaulting on already accrued bills.

Obama hopes to set the stage for a broader deal by improving his often-rocky relations with Congress, one visit at a time. The president has scheduled three more visits on Capitol Hill this week, meeting Wednesday with House Republicans and Thursday with Senate Republicans and House Democrats.

Last week's dinner date with a dozen Republican senators was met with positive reviews and prompted an unusual phone call from Senate Minority Leader Mitch McConnell to the president. "I hope he'll invite all of our members down for these small dinners," said the Kentucky Republican, relaying the conversation. "I'm all for it."

The social outings may smooth relations, but it's unclear whether they will produce a budget plan.

Republicans reject Obama's idea of taxing wealthier Americans and corporations to help balance the books, while Democrats argue the GOP promise of lower tax rates for everyone will simply give tax breaks to the wealthy while costing ordinary Americans about $2,000 a year.

The key component of Ryan's budget, the Medicare overhaul, would provide a voucher that future seniors, born after 1959, would apply to the cost of private insurance or Medicare. The value of the government support would be capped and set to the second-cheapest plan, which means it would not be guaranteed to cover the cost of Medicare.

Spending on Medicaid, which is the health program for the poor, disabled and seniors in nursing homes, would be cut, while the Pentagon would largely be spared.

Another indication the parties remain far apart arose Tuesday when the Senate had trouble advancing a bill that must pass to keep the government running after March 27, despite promises from both sides to avert a shutdown.

After lunch at the White House with Obama and Ryan last week, the top Democrat on the House Budget Committee, Rep. Chris Van Hollen of Maryland, walked away with one lesson.

"What we learned was that we have a long way to go to bridge the differences," he said.

lisa.mascaro@latimes.com

michael.memoli@latimes.com

Kathleen Hennessey in the Washington bureau contributed to this report.

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