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March 24, 2013

Budget balance is in eye of the beholder

WASHINGTON — When it comes to budgets, balance is in the eye of the congressional beholder.

To House Republicans, it means a balanced budget in a decade, achieved by $4.6 trillion in spending cuts and without any tax increases.

To Senate Democrats, it means a balanced plan, about $975 billion in higher taxes and a spending reduction of about $875 billion, not counting cancellation of $1.2 trillion in existing across-the-board-cuts.

That makes the two plans polar opposites as President Barack Obama and the two political parties begin maneuvering toward yet another round of deficit-reduction negotiations.

“Ultimately the key to this lock is in their (Republican) hands and they’ve got to decide if they want to turn it, and that means taking a balanced approach,” said Rep. Chris Van Hollen, a Maryland Democrat who is his party’s chief budget strategist in the House.

Across the Capitol, Senate Republican leader Mitch McConnell of Kentucky offered a rebuttal.

He said that under the plan Democrats favor, “We won’t get more jobs or a better economy or sensible reforms to prevent Medicare or Social Security from going bankrupt. And we certainly won’t get a balanced budget.”

Even with the deep differences between the two parties, there’s plenty of time before the next make-or-break moment in divided-government’s pursuit of lower deficits.

That won’t come until late July, when Obama probably will be forced to ask Congress for an increase in borrowing authority so the Treasury can finance the nation’s $16 trillion national debt. Republicans have said they will use the request as leverage to gain concessions on spending cuts in Medicare and other benefit programs.

“Going back to the 1950s, debt ceiling requests of presidents have been used to bring about major changes, Gramm-Rudman, the Congressional Review Act, the 1997 Clinton-Republican Congress deficit reduction package, the Budget Control Act,” McConnell said, summoning the ghosts of budget compromises past.

“All of those came in the context of the budget — of the request of the president to raise the debt ceiling,” he said.

Well before then, on April 8 in fact, Obama will present a budget of his own. It is long overdue, to the disappointment of Republicans who had hoped to make it an object of ridicule in the just-completed budget debates in the House and Senate.

It gives Obama the chance to align himself entirely with his Democratic allies, or possibly to edge away when it comes to government benefit programs that have largely escaped cuts in earlier compromises.

Republicans will watch to see what steps, if any, the White House is willing to recommend to slow the growth of Medicare or perhaps Social Security.

Given Obama’s recent series of meetings with Republicans, some GOP lawmakers say privately it would be a positive sign for him to include a proposal curtailing the rise in cost of living increases in benefit programs.

It’s a change he has supported since his aborted deficit-reduction negotiations with House Speaker John Boehner, R-Ohio, nearly two years ago. But many Democrats in Congress oppose it and the administration has never included it in its budget.

Republicans also are hoping Obama will back steps to slow the long-term growth in Medicare, even if they phase in gradually and produce relatively little deficit savings in the next decade.

The president’s 2013 budget called for $305 billion in Medicare savings, but only a fraction of that would come directly from patients or seem likely to change the demand for care.

In his State of the Union address in February, the president said he would change “the way our government pays for Medicare, because our medical bills shouldn’t be based on the number of tests ordered or days spent in the hospital — they should be based on the quality of care that our seniors receive.”

Considerably more sensitive is a suggested increase in the age of eligibility for Medicare.

During the recent round of meetings, Republicans asked Obama if he would support it, and he sidestepped, according to officials who spoke on condition of anonymity because they were discussing private conversations.

It’s another idea that the president supported once before, when he was negotiating with Boehner, and one that many congressional Democrats oppose strenuously.

House Democratic leader Nancy Pelosi of California, who says she is “agnostic” on a change in the cost of living formula, recently wrote that an increase in the Medicare eligibility age above 65 is “a reflection of the broader Republican plan: an assault on the middle class, seniors and our future.”

On the other side of the divide, Obama and Democrats want Republicans to agree to higher taxes as part of any deal that wrings savings from Medicare. That was a tough sell before Jan. 1, the date Congress raised rates on upper-income taxpayers with votes of some Republicans and the acquiescence of others.

It will be an even tougher one now.

“Taking more money from hard-working families to fuel more spending in Washington is not going to solve our budget crisis,” Wisconsin Rep. Paul Ryan told the House recently as he advocated for the Republican budget that he wrote.

This time, Rep. James Clyburn of South Carolina provided the Democratic rebuttal.

“There are many words that can be used to describe the Ryan budget,” he told the House. “But the one word that cannot be used is ‘balanced.”’

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