Saturday, April 16, 2011

House Republicans approved a budget Friday that would fundamentally alter Medicare and Medicaid, lower taxes on individuals and corporations, and cut $4.4 trillion from the nation's deficit over the next decade.

With its passing, Republicans have officially put forth their vision for reducing the nation's debt and defining how the federal government fits into people's lives. It's a sharply different approach from the one outlined by President Obama on Wednesday, setting up months of clashes between the two parties over a number of critical fiscal issues.

House Republicans are betting that Americans are so concerned about the nation's mounting debt that they will respond to a bold plan to fix it, even if that prescription includes major changes to Medicare and other entitlements that most people support.

"This is our defining moment. We must choose this path to prosperity," said Budget Chairman Paul Ryan, R-Wis., chief architect of the plan.

Ryan's budget would spend about $40 trillion over the next decade - $6.2 trillion less than the budget Obama proposed in February. The bulk of the savings would come from health care programs, starting with a repeal of Obama's new initiative to expand coverage for the uninsured.

Starting in 2022, Ryan also would end Medicare as an open-ended entitlement for new retirees and begin slowly raising the age of eligibility from 65 to 67. Instead of getting government-paid benefits, retirees could choose a private policy on a newly established Medicare exchange.

Medicaid would come in for even sharper cuts, exceeding $700 billion over the next decade. The GOP plan would end the financing partnership between the federal government and the states, replacing it with block grants that give states less money.

Tax cuts for corporations and other tax reforms would reduce the overall savings of the plan to $4.4 trillion.

All but four Republicans voted for Ryan's 2012 budget blueprint, and every Democrat present voted against it, for a final tally of 235-193.

The Ryan budget has virtually no chance of being enacted into law, considering that Democrats still control the Senate and Obama opposes much of it.

In an interview with the Associated Press on Friday, Obama said the proposed changes to Medicare would create a "fundamentally different society than the one that we have now." Obama offered his own framework for an alternative this week that would decrease the deficit in part by raising taxes on the wealthiest Americans and cutting military and domestic spending.

Democrats believe Republicans made a political mistake in embracing the Ryan budget.

"I want to say to my Republican colleagues: Do you realize that your leadership is asking you to cast a vote today to abolish Medicare as we know it?" said Minority Leader Nancy Pelosi, D-San Francisco.

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