Both parties brace for budget battle

WASHINGTON -- After a few months of relative peace on the budget front, Democrats and Republicans are readying for a party-defining, election-year fight over trillion-dollar-plus deficits and what to do about them.

The focus in the week ahead will be on the conservative-dominated House, where the Budget Committee chairman, Rep. Paul Ryan (R-Wis.), is fashioning a sequel to last year's "Path to Prosperity" manifesto that ignited a firestorm over Medicare.

The upcoming debate gives Republicans a chance to show how they would tackle out-of-control budget deficits and rein in the cost and scope of government. Those are top issues for the conservative supporters counted on by Republicans to turn out in large numbers in the fall to maintain the GOP's control of the House.

President Barack Obama released his spending blueprint last month for the budget year that begins Oct. 1. It calls for tax increases on wealthier earners and modest spending curbs.

But it would not address the spiraling costs of Medicare and Medicaid. Last year's GOP measure proposed replacing Medicare fee-for-service payments to doctors and hospitals with a voucher-like program in which the government would subsidize purchases of health insurance on the private market.

Democrats said the subsidies wouldn't keep up with inflation in medical costs and would shift costs to older people, and they accused Republicans of plotting to "end Medicare as we know it." Republicans showed less enthusiasm for the plan after that.

Ryan has since come out with a less stringent version of the measure, in concert with Sen. Ron Wyden (D-Ore.), that would keep the traditional Medicare "fee for service" program as an option along with private insurance plans.

Ryan has yet to disclose the specifics of his plan. But the committee said yesterday that he would introduce the proposal Tuesday; that would allow his committee to sign off on it by the end of the week.

Pressure from conservative lawmakers has prompted GOP leaders to reopen last summer's budget pact and impose further cuts on domestic agencies such as the departments of Education, Energy, and Housing and Urban Development.

Last year's deal with Obama set a $1.047 trillion cap on the annual operating budgets of cabinet departments and other agencies for the upcoming 2013 budget year.

GOP aides say Republican leaders want to cut that figure by $19 billion, or almost 2 percent, leading to protests from Democrats that Republicans are going back on the deal.

Democrats controlling the Senate do not want a budget debate. Senate Majority Leader Harry Reid (D-Nev.) has said he will instead rely on language he inserted in a budget pact last year that allows for floor action on the annual spending bills without a budget resolution.

By avoiding a budget debate, Reid protects several vulnerable incumbent Democrats.

Despite the GOP proposal's sharp cuts to agency budgets and Medicaid, and its call to repeal Obama's health care law, it is certain to leave substantial deficits over the next decade.

Democrats and independent budget experts are sure to cite the resulting deficits as proof that new tax revenues are needed as part of any comprehensive answer to the fiscal crisis.