House aims for change in entitlements

By CQ Staff April 4, 2011. Congress.org

House Republicans are set to release their fiscal 2012 budget resolution this week, and the plan is expected to call for major changes, including new caps on mandatory and discretionary spending.

The budget document also will lay out the Republican fiscal agenda for the year, calling for deep rollbacks for many discretionary programs, including some reductions for the Pentagon, and other cost-saving changes to entitlement programs such as Medicare and Medicaid.

With Senate Democrats and House Republicans still far apart on fiscal priorities, the House blueprint has little hope of winning favor in the Senate. But it is expected to provide a clear picture of a new conservative House majority intent on reordering the nation’s fiscal affairs and continuing a campaign to slice large chunks out of the government’s bankroll.

At the same time, a budget measure including tight spending controls could provide political cover to House conservatives already wary of compromising on funding cuts in the ongoing fight over fiscal 2011 appropriations.

Although details are still scarce, congressional sources said the new spending caps expected to be called for in the House resolution would be similar to legislation backed by Sen. Bob Corker, R-Tenn., and Sen. Claire McCaskill, D-Mo. Their bill (S 245) would reduce spending on discretionary and mandatory programs to 20.6 percent of the economy over 10 years, down from the current level of 24.7 percent.

If Congress did not meet that goal, the Senate bill would call for automatic cuts to government programs until the cap levels are met. Congress could override the new limits with a two-thirds vote.

Although the budget resolution would account for the new spending caps, lawmakers would have to clear separate legislation to make the new limits law.

Conservative analysts have argued for years that such a fiscal restraint is needed to rein in Congress’ propensity to spend more than Washington collects in revenues.

“Runaway spending is what’s driving the deficit,” said Brian Riedl, a budget analyst at the conservative Heritage Foundation. “And it’s very tough to enact the spending reforms needed unless there’s a framework in place capping spending.”

Calling for a statutory cap on federal spending may reflect House Budget Chairman Paul D. Ryan’s recognition that any changes to entitlement programs will require bipartisan support.

So far, McCaskill is the only Democratic sponsor of her bill with Corker. But similar proposed caps have drawn strong bipartisan support in the Senate in the past, though not enough to pass. Other cosponsors of the plan include Saxby Chambliss, R-Ga., who is working to draft a comprehensive bipartisan deficit reduction plan with a handful of other budget-conscious senators.

The budget resolution will kick off the next round of rhetorical battles over the more than $1 trillion deficit and growing $14 trillion national debt.

Although Ryan, R-Wis., has kept a tight lid on details, lawmakers and others who have been told about the budget resolution say it will aim to scale back some domestic programs to fiscal 2006 spending levels, include some cuts to Defense spending and call for cost savings in mandatory spending programs including Medicaid and Medicare.

The budget resolution is expected to reflect plans to replace the current formula-based Medicaid program, which provides health care to the poor, with a block grant system in which the states receive a set amount of funding from Washington and have greater latitude to design their own programs and determine who is eligible for Medicaid.

Combined with the assumed repeal of the health care law (PL 111-148, PL 111-152) enacted last year, using block grants for the program could save more than $700 billion over a decade, based on an analysis of projections from the Congressional Budget Office.

The budget is also expected to address Medicare, the health care program for seniors and the disabled, with a call for a “modified” version of a proposal by Ryan and Alice Rivlin, who was budget director under President Bill Clinton.

The Rivlin-Ryan plan, which was drawn up when the two served on the president’s fiscal commission last year, would replace the current Medicare fee-for-service system with vouchers that recipients would use to buy private health insurance.

Although the budget is not expected to contemplate major changes to Social Security, the resolution will suggest some procedural tweaks that could open the way for further modification of Social Security in the future.

“I think the most important test for this is, how serious is it on entitlement reform, and what kind of response does it get from Democrats who presumably won’t love all the details that are presented,” said Maya MacGuineas, president of the nonpartisan Committee for a Responsible Federal Budget.

Scott Lilly, a senior fellow at the liberal Center for American Progress, said the Ryan budget could be the start of a conversation about how to address the real drivers of the rising debt.

“We have programs that are relatively generous to retirees, and we’re not willing to, at this point, pay the taxes that are necessary to support them,” he said. “And I think it’s useful that Chairman Ryan is showing us how we can do it without raising revenues.”

Many House Republicans are awaiting the budget with enthusiasm. Jason Chaffetz, R-Utah, a member of the Budget Committee, lauded the plan for being “a major contrast to where the president is.”

Some conservatives, however, may be disappointed that it does not call for a balanced budget in 10 years, a goal of many freshmen. During listening sessions with House members, Ryan was reported to have said that ending the deficit in a decade would require disruptive benefit cuts to current recipients of entitlement programs such as Medicare. The GOP plan seeks to phase in changes, exempting those who are 55 and older.

The plan has already drawn fire from Democrats. Chris Van Hollen of Maryland, ranking member on the House Budget Committee, attacked the idea of turning Medicaid into a block grant program, which he described as “simply code for slashing health care support for seniors, people with disabilities and others.”

-- Paul M. Krawzak, CQ Staff

Link: http://origin-www.congress.org/news/2011/04/04/house_aims_for_change_in_entitlements/