–House Approves GOP’s FY’13 Budget On Mostly Party Line Vote
–House Speaker Says GOP Plan Needed To Confront ‘Our Fiscal Nightmare’
–Senate Budget Committee Chairman Set To Unveil Plan In April

By John Shaw

WASHINGTON (MNI) – Now that the House has passed the 2013 fiscal
year budget resolution crafted by Budget Committee Chairman Paul Ryan,
Congress’s fiscal focus will shift to Senate Budget Committee Chairman
Kent Conrad’s budget proposal.

Conrad is expected to unveil his plan in the later part of April.
Congress has just begun a two week spring recess.

Conrad has not indicated what his plan will look like, but has
praised President Obama’s FY’13 framework as a plan that moves in the
right direction.

However, in hearings this spring Conrad has repeatedly called for
bold fiscal remedies that change the trajectory of American fiscal
policy.

Conrad has said the U.S.’s fiscal situation requires a ten-year
deficit reduction plan that is even greater than the $4 trillion package
developed by the Simpson-Bowles committee more than a year ago.

The Senate Budget Committee chairman said his “fondest wish” would
be for Congress to support a deficit reduction plan of about $5.5
trillion over a decade.

Congress should “put in place the plan right now,” Conrad said,
adding that it should be phased-in carefully so that major deficit
cutting occurs only after the recovery has fully taken hold.

Conrad has said it will be very difficult for lawmakers to make
progress on deficit reduction during an election year, but he implored
all the members of his panel to try. “Let’s give it our absolute best
shot,” he said.

In addition to chairing the Senate Budget Committee, Conrad is also
a member of the so-called “Gang Of Six” which has drafted a plan to cut
deficits by $3.75 trillion over a decade. Their plan would include large
savings from entitlement programs and increase revenues by about $1.2
trillion.

Conrad has pledged to unveil a FY’13 budget and to present it to
his panel.

The full Senate has not voted on a budget resolution since 2009.
And it is unlikely to vote on one this year.

Senate Majority Leader Harry Reid has said Congress does not need
to pass a budget resolution this year because Congress already agreed on
discretionary spending limits in last year’s debt ceiling accord.

House Republican leaders spent much of this week touting their own
fiscal plan and hammering the Senate for showing no signs of passing an
FY’13 budget resolution.

The House approved the GOP budget resolution Thursday on a 228 to
191 vote. All Democrats opposed the GOP budget; all Republicans, except
for 10, voted for Ryan’s plan.

Before the final vote, the House rejected a Democratic alternative
budget on a 163 to 262 vote.

Budget resolutions set broad spending and revenue goals and make
deficit projections. They are congressional blueprints and are not
binding law.

House Speaker John Boehner said the Republican budget “makes tough
decisions about our path to the future.” He said the House GOP budget is
needed to address “our fiscal nightmare.”

During the debate, Republicans focused their rhetorical attacks on
President Obama’s fiscal record, blaming him and his administration for
a string of $1 trillion budget deficits.

House Republicans said that Ryan’s budget includes the kind of
sweeping entitlement reforms that are needed to control future budget
deficits.

Democrats argued that Obama inherited a fiscal mess and a
collapsing economy and has advanced policies that have stabilized the
economy and are now leading to steady growth.

Democrats hammered Ryan’s budget as an unbalanced plan that tries
to solve the nation’s fiscal problems purely on the spending side of the
ledger.

Ryan said his budget would cut spending by $5 trillion more than
would President Obama’s budget over a decade and would reduce deficits
by $3.3 trillion more than would the president’s budget.

Ryan’s budget makes deep cuts in the projected growth of federal
spending and calls for the fundamental overhaul of Medicare, Medicaid
and welfare programs. It also calls for repealing the 2010 health care
law.

Ryan’s budget endorses the extension of the Bush era tax cuts and
undertaking fundamental tax reform in which the current six individual
rates are collapsed into two rates, 10% and 25%. The corporate rate
would be cut to 25%.

Ryan’s budget sets FY’13 discretionary spending at $1.028 trillion,
$19 billion below the $1.047 trillion that was allowed for in last
summer’s debt ceiling agreement.

Ryan also calls for enacting a package of spending cuts to prevent
the $110 billion in across-the-board spending cuts that are scheduled to
begin next January.

It secures some of its savings by cutting the federal workforce by
10% over three years, freezing federal pay through 2015, slowing the
growth of federal financial aid for college students and focusing it on
low-income students.

For the FY’13 through FY’22 period, Ryan’s budget would result in
$3.127 trillion in cumulative deficits. His budget would not balance the
federal budget until 2040.

Rep. Chris Van Hollen, the top Democrat on the House Budget
Committee, offered an alternative budget that was based broadly on the
budget that Obama introduced in February.

The full House rejected the Democratic budget and several other
budgets including plans offered by liberal Democrats and a bipartisan
group of lawmakers who proposed a package based on the Simpson-Bowles
report.

Both Boehner and House Minority Leader Nancy Pelosi downplayed the
significance of the House’s decisive rejection of a version of the
Simpson-Bowles plan.

Pelosi said the actual amendment that was under consideration by
the bipartisan group of lawmakers was represented as a close version of
Simpson-Bowles, but this description was deemed inaccurate by Democratic
leaders are closely reviewing the amendment.

“It was a caricature of Simpson-Bowles,” Pelosi said.

She said the amendment “shifted around” tens of billions of dollars
from the template first presented by Erskine Bowles and Alan Simpson in
late 2010. That plan calls for more than $4 trillion in deficit
reduction over a decade through a blend of spending cuts and tax
increases.

Pelosi said she would support the Simpson-Bowles report if it were
written up in legislative form.

Boehner said the House budget amendment came up at the wrong time
to be considered dispassionately. It was considered during “the middle
of a pretty heated philosophical debate” on fiscal policy, Boehner said.

Asked if he would support Simpson-Bowles in a different context,
Boehner said “I support the Ryan budget.”

** MNI Washington Bureau: (202) 371-2121 **

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