Budget battle insights

Published on May 22, 2011 by

The 2011 budget battle continues to be waged on Capitol Hill with the Senate vote on Paul Ryan’s, R-Wis., controversial budget plan put off yet again.

The plan that, among other things, proposes to defund Medicare and replace it with a voucher system while cutting taxes for the wealthy and corporations, met with overwhelming opposition in polls and at Town Hall meetings nationwide.

As a result, congressional Republicans are now backing off Ryan’s Medicare provision.

“I will steadfastly and passionately oppose any effort to cut Social Security, to reduce guaranteed benefits under Medicare, or to cut Medicaid in ways that impact our most vulnerable citizens under the guise of deficit reduction,” said Sen. Richard Blumenthal. “I strongly believe that we must reduce our debt and deficit and rein in spending — but we must do so wisely with smart, strategic cuts that that help promote job creation and economic growth.”

Senate Majority Leader Harry Reid, D-Nev., has vowed to force a vote on the Ryan budget, which would complicate bipartisan talks by the so-called Gang of Six (Simpson-Bowles Commission) that has been working to release a deficit reduction proposal.
Meanwhile, the U.S. House of Representatives recently approved a bill to fund the government through the end of the fiscal year, Sept. 30, 2011.

It passed by a 260-167 vote. A few hours later, the Senate also voted in favor, 81-19. President Obama then signed the bill into law, ending the angst over a government shutdown.

While the agreement should have been cause for celebration, it left a bad taste for both the right and the left, with each side forced to swallow bitter pills including $38 billion in spending cuts this year.

“Although the cuts are painful, I’m pleased both sides of the aisle have come together to support a plan that prevents a government shutdown and protects some of our most important priorities,” said state Rep. Jim Himes, D-Conn., who voted aye. “I am particularly satisfied that TIGER grants, including the funding to redevelop Steel Pointe in Bridgeport, have been preserved and funding for the SEC and CFTC will increase to support protections for investors and consumers enacted as part of Wall Street reform.”

The 1995 shutdown, initiated by former House Speaker Newt Gingrich, put the kibosh on Social Security, health care, law enforcement, public safety, visas and passports, parks, museums and monuments, veterans’ benefits and federal contractors.

It still haunts Gingrich today as he prepares for a possible run for the presidency.
After Obama addressed the nation on the budget, the polls showed a majority of Americans supported the two sides coming together to reach a deal.

“The president’s comments regarding the GOP budget had their intended effect: to lay out the choices we face in balancing the budget,” said Himes. “He supports a plan that relies on asking everyone to come to the table to be part of the solution. This is in stark contrast to the proposal made by the GOP, which asks very little of those who have benefitted from our existing structure while demanding draconian cuts to our most vulnerable — seniors, children, and the disabled.”

Himes added that the GOP plan was based on some fantastical assumptions.
“That unemployment will quickly fall below 3 percent — and stay there,” he said. “I’m all about being optimistic, but the president was right to call the GOP proposal into question.”

However, several Senate Democrats voted nay on the bill, including Carl Levin, D-Mich., Ron Wyden, D-Ore., and Bernie Sanders, I-Vt., who were all in favor of the progressive bill, which would protect entitlements by raising the tax rates for the wealthy and corporations.

“We need fair, responsible cuts, tax reform and sustainable entitlements, and never forget the importance of investing in our future — education and infrastructure are critical to our future prosperity,” Himes said.

A recent Wall Street Journal/NBC poll found that a majority of Americans disapprove of cutting funding for most government programs (especially Medicare, Medicaid, Social Security and K-12 education), but that if something must be done to reduce the deficit, they favor tax increases for the affluent and for rich corporations, as well as cuts to the military.

Riders in the initial bill, including defunding Planned Parenthood and the Department of Environmental Protection, were stripped from the legislation. The defunding of Planned Parenthood was voted on separately, but failed with five Republicans voting with Democrats in opposition including Sens. Olympia Snowe, R-Maine, Lisa Murkowski, R-Alaska, Susan Collins, R-Maine, Scott Brown, R-Mass., and Mark Kirk, R-Ill.

“I’m pleased this discussion has moved away from a ludicrous focus on earmarks and foreign aid as the most important factors in the budget debate and is now getting more serious. That’s a good thing,” said Himes.

The Senate also rejected a Republican plan that would have blocked funding for implementation of Obama’s Affordable Care Act (health care reform). The 47-53 vote broke along party lines.

“In order for any plan to be successful, everything has to be on the table,” said Himes. “That’s why I am supportive of the Simpson-Bowles proposal; it brings everyone to the table. I don’t think anyone would say it is perfect, but it asks everyone to be a part of the solution.”

Former Wyoming Republican Senator Alan Simpson and former Clinton White House Chief of Staff Erskine Bowles’ bipartisan deficit commission calls to cut spending, eliminate tax loopholes, raise taxes and sacrifice across the board by everyone, including entitlement programs.

Obama used the commission’s framework, calling for changes to Medicare, Medicaid, defense spending and the tax code. But on debt as a share of GDP Obama’s proposal would reduce it to 75 percent by 2023, versus 60 percent under Bowles-Simpson.
The Ryan plan would shift the costs of balancing the budget to seniors, the disabled and the poor by turning Medicare over to private insurers and creating block grants to states for Medicaid.

“We absolutely must protect Medicare, Medicaid and Social Security,” said Himes. “But protecting those programs means reforming them to ensure they are around for future generations to help and protect the people who really need them. The GOP budget simply shifts the growing cost of health care to our most vulnerable. That’s not right, fair or productive.”

With the support of the Tea Party, Ryan’s resolution passed the House, 235-189, with no Democrats supporting its passage. Four House Republican representatives (Walter Jones, R-N.C., David McKinley, R-W.Va, Ron Paul, R-Texas and Denny Rehberg, R-Mont.) opposed the bill. The Ryan plan is expected to die in the Senate and Obama has voiced strong opposition to it, vowing to preserve Medicare, Medicaid and Social Security and end the Bush tax cuts for the rich.

“A big part of our fiscal mess was created by unfunded tax cuts pushed by George W. Bush,” said Himes. “The Republican proposal pays for more tax cuts for the wealthy by slashing spending on children, the sick and the elderly. That’s not right.”
Recently, Himes addressed a crowd of approximately 50 at the Fairfield Rotary Club on the subject of the budget. He discussed simplifying the tax code and corporate tax reform, international trade and financial services reform.

“I’m an optimist,” said Himes. “I think that we’re going to get something done.”
Himes said he wouldn’t support cutting payments to current Social Security recipients, but added that consideration should be given to tweaking the system for those who are still several decades away from retiring.

“Budget deliberations have gotten progressively more honest,” Himes said. “We got into this mess in a very bipartisan way, and we’re going to have to get out of this mess in a very bipartisan way.”

Following the upcoming Senate vote on the Ryan plan, the next big budget battle is over the debt ceiling.