Delegation pans GOP budget proposal–with one exception

WASHINGTON–Even before House Republicans had finished unveiling their dramatic budget proposal for 2012, Sen. Joseph Lieberman sent out a congratulatory statement on the GOP budget chairman’s plan.

Lieberman said he wanted to thank Rep. Paul Ryan, the Wisconsin Republican who on Tuesday unveiled a proposal to slash nearly $6 trillion from federal spending over the next ten years, for having the “courage” to address the national debt and to offer a comprehensive solution.

Others in the delegation were not so enthusiastic about the Republicans’ latest salvo in Washington’s budget wars. Even as Congress remained locked in a bitter standoff over spending for fiscal year 2011, Ryan’s budget blueprint for 2012 illustrates that the real fight will be over spending for next year and beyond.

Rep. Rosa DeLauro, D-3rd District, blasted Ryan’s proposal as an “ideologically driven” document that will provide “tax breaks for millionaires” while eviscerating the middle class.

Rep. John Larson, D-1st District, said Ryan’s budget resolution could be summed up this way: “Its let’s shrink up government so small we can drown it in a bath tub.”

Larson’s tone turned deeply sarcastic, as he talked about how Republicans would make sure “the rich will be spared,” because they “are just working their fingers down to the bone… And thank God, because we all know how that will trickle down.”

Ryan outlined his budget bill before a media hoard on Tuesday, with cameras whirring and reporters scribbling when he held up his “Path to Prosperity” outline and started going through it.

Among the most controversial elements, the proposal calls for remaking both Medicaid and Medicare. On the former, Ryan says the joint state-federal health care program for the poor should be turned into a block grant. States would get a set amount of federal money to run the program and increased flexibility to determine eligibility and benefits.

Connecticut Gov. Dannel Malloy and other Democrats said that would just shift costs to the states, rather than solve the serious questions about exploding Medicaid costs.

“Such a cost shift would severely undercut our ability to provide health care to our residents and adequately pay providers,” Malloy and other governors wrote in a letter outlining their opposition to Ryan’s plan.

On Medicare, Ryan calls for essentially privatizing the health insurance program for future beneficiaries. His proposal would keep the program as is for people who are already 55 and older. For those under that age, the program would be dramatically revamped. They would get a set amount of money from the federal government to pay for insurance in the private market, instead of the current system under which they receive health care services and the federal government reimburses doctors and other providers.

Connecticut Democrats said the Medicaid and Medicare proposals were non-starters.

“To me, that’s not spending reform. That’s just cost shifting,” said Rep. Joseph Courtney, D-2nd District.

Similarly, Rep. Jim Himes, D-4th District, noted that right now, the federal government shoulders the risk of spiraling health care costs. Ryan’s plan seeks to shift that risk to states, when it comes to Medicaid, and to elderly individuals, when it comes to Medicare.

“It’s not particularly equitable to just say ‘Now you, the states or the individual, are going to bear that’,” he said. “There’s a smarter way, which says let’s get those costs under control and create a more efficient system.”

Democratic Sen. Richard Blumenthal went further, blasting Ryan’s plan as an effort to “dismantle” those two safety net programs. That will never pass the Senate, he said.

Democrats highlighted an analysis by the nonpartisan Congress Budget Office, which concluded that under Ryan’s plan for the two health care programs, states and seniors would end up with higher health care expenses.

“Most elderly people would pay more for their health care than they would pay under the current Medicare system,” the CBO said.

As for the proposed changes to Medicaid, CBO said that even with additional flexibility for the states, a large reduction in federal payments “would probably require states to decrease payments to Medicaid providers, reduce eligibility for Medicaid, provide less extensive coverage to beneficiaries, or pay more themselves than would be the case under current law.”

Ryan and his Republican allies said they were working to make the two programs more sustainable, not to unravel them. His “Path to Prosperity” blueprint says transforming Medicaid into a block grant program would “secure” it and give states the “freedom and flexibility to tailor” a program that meets their individual needs. The move would save $750 billion over ten years, the Path to Prosperity states.

Similarly on Medicare, the Ryan plan says the privatization would allow younger workers more flexibility and save billions of dollars.

“For too long, Washington has not been honest with the American people” about the nation’s federal spending, Ryan said. Failing to act, he said, would be catastrophic.

Ryan’s proposal will be met with strong opposition across the Capitol. In addition to his proposed changes to Medicaid and Medicare, Ryan calls for cutting taxes and slashing domestic spending.

Courtney said that the GOP resolution doesn’t go far enough when it comes to defense cuts. Ryan’s bill embraces a proposal by Defense Secretary Robert Gates to cut $78 billion over ten years in Pentagon spending. Courtney said Gates’ proposal is a good start, but lawmakers should press for more.

“That’s not the end,” he said. “It can’t be… if you’re going to really talk about long-term deficit reduction.”

Similarly, Himes said the GOP proposal falls seriously short on tax reform. Ryan proposes cutting corporate and personal income taxes for the wealthiest Americans, slicing the top rate from 35 percent to 25 percent.

Lieberman, Himes and others have said that tax increases will almost certainly need to be part of any long-term fiscal plan to bring down the nation’s mounting debt.

Even Lieberman, when pressed for a more detailed response to Ryan’s plan, said “I have some questions” about some of his proposals. “But I just wanted to compliment him for having the guts to go for a comprehensive position,” Lieberman said. “Until people go out there, we’re not going to get anywhere.”

Himes, too, said that he will probably find much to disagree with as he digs into the details of Ryan’s plan. But he welcomes a broader debate about spending than the one that has currently gripped Washington-the tussle over tens of billions of dollars in spending cuts to fiscal year 2011 spending levels.

“I’ve been complaining for the last three months that we’re having a dishonest conversation about the budget,” Himes said, because the current fight is over a tiny slice–less than 15 percent-of federal spending. “Ryan, to his credit, has said there is a much larger conversation to be had.”

The new GOP blueprint is still too narrow, Himes said, because it doesn’t include tax increases or substantive cuts to corporate subsidies. But, he said, “it’s a start.”

Asked if he was concerned that Republicans had successfully framed the fiscal debate on their terms, Himes said not yet. But he said Democrats needed to respond forcefully with their own comprehensive debt-reduction proposal.

“The Republicans have broadened the discussion,” Himes said. “Its now incumbent on the President to say ‘Here’s where I am.’ I am looking to him for leadership on this very difficult topic.”

Blumenthal said he was confident that would happen. “There will be plenty of time to present alternatives-and there will be alternatives,” he said.