Budget plan faces uncertain fate after clearing House panel

By ANDREW TAYLOR Markets Associated Press

A Republican budget blueprint that would begin to clear a path for a GOP effort to overhaul the tax code this fall is headed to an uncertain fate after winning a key committee vote Wednesday night.

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The Budget Committee plan faces opposition from both hard-core conservatives and more moderate Republicans even as it advanced through the GOP-controlled panel on a party-line 22-14 vote. It remains short of the votes required to pass through the House and advance to the Senate, where further complications await.

The plan proposes deep cuts to safety net programs like Medicaid and food stamps and reprises a controversial Medicare plan strongly opposed by President Donald Trump — though Republicans are expected to only try to deliver on a small fraction of the cuts.

Instead, to most Republicans on Capitol Hill, the most important element of the plan is the procedural pathway it would clear to allow Republicans to pass their top priority — an overhaul of the tax code — later this year without fear of a blockade by Senate Democrats.

Republicans argue that growing deficits and debt are part of the reason for slow economic growth and that big benefit plans like Medicare and Medicaid need changes now to keep them from going broke for future generations.

"Both parties in Washington have failed to abide by a simple principle that all American families and small businesses do — that we must live within our means," said Budget Chairman Diane Black, R-Tenn. "Balancing the budget requires us to make tough choices, but the consequences of inaction far outweigh any political risks we may face."

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But like the GOP's health care repeal and replace efforts and its moribund hopes to boost infrastructure, the GOP budget outline faces opposition from both wings of the party. Republican conservatives want more of its proposed cuts to actually take effect in follow-up legislation, while moderates want to focus on tax reform instead of cuts to food stamps or federal employee pensions.

The nonbinding GOP plan promises to cut more than $5 trillion from the budget over the coming decade, though Republicans only appear serious about enacting a relatively modest 10-year, $203 billion deficit cut over the same period through filibuster-proof follow-up legislation.

But Democrats blasted the sweeping cuts in the plan.

"This is exactly what the American people don't want or expect out of their government — that we would provide tax cuts for the wealthiest Americans and corporations and pay for it on the backs of people who are struggling to make their lives better," said top panel Democrat John Yarmuth of Kentucky.

The measure also revives a provocative proposal to turn Medicare into a voucher-like program for future retirees. Experts say that change would likely increase costs for beneficiaries and deny them the coverage guarantees of Medicare.

Republicans easily rejected Democratic attempts to protect the Obama health law, restore Medicaid, and increase spending for domestic programs renewed by Congress each year.

While exempting Social Security, veterans and defense, the plan proposes cuts across the rest of the budget to turn this year's projected $700 billion-or-so deficit into a tiny $9 billion surplus by 2027. It would do so by slashing $5.4 trillion over the coming decade, including almost $500 billion from Medicare and $1.5 trillion from Medicaid and the Obama-era health law.

It also contains its share of gimmicks, including $1.8 trillion in deficit cuts over the coming decade from rosy projections of economic growth averaging 2.6 percent over 10 years. Another $700 billion in savings would come from a crackdown on "improper payments" such as tax credits and Social Security and Medicare benefits going to people who don't qualify for them. Many of its cuts are unspecified.

But in the immediate future the GOP measure is a budget buster. It would add almost $30 billion to Trump's $668 billion request for national defense next year and rejects most of Trump's proposed cuts to domestic agencies — only to promise deeper, nonbinding cuts in the future.