Shutdown Looms as Talks on Stopgap Budget Fail
Stephen Crowley/The New York Times
Representative Paul D. Ryan, the Republican who chairs the Budget Committee, unveiled details of his budget plan at a news conference at the Capitol on Tuesday.
By JENNIFER STEINHAUER and CARL HULSE
Published: April 5, 2011
WASHINGTON — Congress and the White House veered toward a fiscal collision on Tuesday as the Obama administration rejected a short-term House Republican demand to cut $12 billion now in exchange for keeping the government open for one more week, while the Republicans’ budget chairman set forth a longer-range blueprint defining a new era of profoundly smaller government and steep tax cuts for corporations and individuals.
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As the news circulated that a White House meeting had produced no deal between House Speaker John Boehner and President Obama, Senator Charles Schumer, the number three Democrat in the Senate, said that if a shutdown is in the offing, the blame should lie at the feet of Republicans. “A deal with $33 billion in spending cuts is right there for the taking,” he said in an email. “But the House leadership will need to stand up to the Tea Party.” Democrats also denounced the Republicans’ long-term proposal.
House Republicans on Tuesday, in a move calculated in part to draw support from their Tea Party wing by offering steep cuts in taxes and spending in future years, unveiled a far-reaching budget proposal for next year and beyond that cuts $5.8 trillion from anticipated spending levels over ten years and is likely to provide the framework for both the fiscal and political fights of the next two years.
The ambitious plan, drafted principally by Representative Paul D. Ryan, the Wisconsin Republican who chairs the Budget Committee, proposes not only to limit federal spending and reconfigure major federal health programs, but also to rewrite the tax code, cutting the top tax rate for both individuals and corporations to 25 percent from 35 percent, reducing the number of income tax brackets and eliminating what it calls a “burdensome tangle of loopholes.”
At a news conference on Capitol Hill Tuesday, Mr. Ryan, surrounded by his fellow Republicans from the budget committee, alluded to the power of the large freshman class and its Tea Party contingent who have helped to propel the fiscal fight forward. “The new people did not come here for a political career,” he said. “They came here for a cause. This isn’t a budget. This a cause.”
The next few days will test whether that cause will prove politically worth taking the potentially explosive step of cutting off all but essential government financing. In a press release issued shortly after the talks at the White House, House Speaker John A. Boehner of Ohio said that no agreement had been reached, and that House Republicans remain open to extending the existing stop-gap spending measure, which expires on Friday, with another continuing resolution that would last one week and cut an additional $12 billion. (The proposal also includes language to bar federal and local funding for abortion services in Washington, D.C.)
Mr. Boehner added that “Republicans’ strong preference is that we instead pass a bipartisan agreement this week that resolves last year’s budget mess by making real spending cuts and keeps the entire government running through September.”
"The White House has increased the likelihood of a shut down," said Eric Cantor, the House majority leader. Mr. Cantor said that the House leaders had not decided whether to actually move forward on its short-term plan, but that they would continue to press for significant cuts.
The introduction to the longer-term Ryan proposal disavowed what it called the “relentless government spending, borrowing and taxing that are leading America, right at this moment, toward a debt-fueled economic crisis and the demise of America’s exceptional promise.”
Republicans say their proposal would reduce the size of the federal government to 20 percent of the overall economy by 2015 and 15 percent by 2050 while President Obama’s plan introduced this year would not hold the size of government below 23 percent of economic output.
Democrats, however, say the emerging proposal amounts to a conservative ideological manifesto showing that Republicans intend to cut benefits and programs for the nation’s retirees and neediest citizens while protecting corporate America and the wealthiest people from paying their share of taxes. They will be certain to challenge the budget plan and make its bold efforts to reshape Medicare and Medicaid — the health care programs for older Americans and the poor — a theme of their political argument to regain control of the House and hold the White House in 2012.
Representative Chris Van Hollen, ranking Democrat on the House Budget Committee, called it a “rigid ideological agenda that extends tax cuts to the rich and powerful at the expense of the rest of America.”
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Republicans say their driving goal in the budget is to avoid what they see as a coming national debt crisis, which the budget describes in terms that portray rising federal debt as a dire threat to the well-being of the United States. The budget warns that the amount the nation owes will soon be greater than the entire economy.
“This is not the future of a proud and prosperous nation,” the budget says. “It is the future of a nation in decline — its best days come and gone.”
The budget raises the prospect that foreign holders of large amounts of United States debt such as China could begin to extract higher interest rates, ultimately raising costs for all families and leading to sharp cuts in government services and programs.
“The only solutions to a debt crisis would be truly painful,” according to the budget plan. “Massive tax increases, sudden and disruptive cuts to vital programs, runaway inflation, or all three.”
Over all, the plan is aimed at returning federal spending levels to below those of 2008, before the economic stimulus and other programs enacted by the Obama administration when it took over. It does adopt at least one element of the president’s program, noting that the document reflects $178 billion in Pentagon savings identified by Defense Secretary Robert Gates and, like his proposal, would reinvest $100 billion in other military priorities while reserving $78 billion for deficit reduction.
Republicans also say they would eliminate hundreds of duplicative and wasteful government programs and maintain a ban on pet spending projects by members of Congress that is now in place.
In the document, Mr. Ryan and his co-authors spread the blame for the nation’s fiscal problems to both Republicans and Democrats, saying “both parties have squandered the public’s trust.”
“The American people ended a unified Republican majority in 2006, just as they ended a unified Democratic majority last fall,” the budgeted noted. “Americans reject leaders who focus on the pursuit of power at the expense of principle. They reject empty promises from a government that cannot live within its means.”
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