Deja Vu: House GOP Reignites The Medicare Fight With Its Budget

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March 20, 2012 7:36 a.m.

On Tuesday, House Republicans unveiled an updated version of their controversial long-term budget — a sweeping plan that envisions dramatically lower tax rates on wealthy Americans, deep cuts to federal support programs for the poor and the eventual phase-out of the existing Medicare system, which would be replaced by a subsidized private insurance system, including traditional Medicare as an option.

You can read the GOP gloss on their plan here. Among its claims: The latest “Path to Prosperity” “Restores economic freedom and ensures a level playing field for all by putting an end to special-interest favoritism and corporate welfare” and “cuts government spending to protect hardworking taxpayers.”

The reaction from the White House was swift.“It would shower the wealthiest few Americans with an average tax cut of at least $150,000, while preserving taxpayer giveaways to oil companies and breaks for Wall Street hedge fund managers,” said White House Communications Director Dan Pfeiffer. “What’s worse is that all of these tax breaks would be paid for by undermining Medicare and the very things we need to grow our economy and the middle class — things like education, basic research and new sources of energy. And instead of strengthening Medicare, the House budget would end Medicare as we know it, turning the guarantee of retirement security into a voucher that will shift higher and higher costs to seniors over time. ”

The GOP plan imagines two income tax brackets: 10 percent and 25 percent. It calls for a 25 percent corporate tax rate and the elimination of the corporate tax rate. Budget Committee Chairman Paul Ryan claims the tax reforms will be revenue neutral — that by eliminating popular subsidies, loopholes and waste in the tax code, and by triggering economic growth, the tax reforms wouldn’t result in greater deficits. But he doesn’t specify what tax benefits he’d eliminate and there’s scant evidence that these tax reforms would trigger significant enough economic growth to offset much of the revenue lost by cutting taxes.

Despite this lack of specificity, Ryan provided spending and tax revenue projections to CBO, and based on those assumptions, the Congressional Budget Office says the resolution would, if it became law, reduce deficits over the next 10 years by over $3 trillion more than President Obama’s rival budget. However there has not yet been a thorough analysis of the plan based on non-partisan projections.

Rep. Chris Van Hollen (D-MD), ranking member on the House Budget Committee, said the two-bracket approach lacks balance.

“To govern is to choose, but the Republican budget presents a false choice that further divides our country. They provide a gilded path to prosperity for the already wealthy, while leaving working Americans and future generations behind.”

The budget also calls for the repeal of the health care reform law, but is silent on what, if any reforms, ought to replace it, suggesting the GOP would prefer to revert to the pre-Obama health care status quo, when costs were rising, and the number of uninsured was exploding.

And, as detailed earlier, the GOP budget calls for reneging on the debt-limit deal, which could easily trigger a government shutdown fight this September.

The Democrats who toiled hardest during and after the debt limit fight were predictably outraged.

“By desperately attempting to appease their extreme conservative base, House Republicans are reneging on a deal their own Speaker shook on less than eight months ago,” said Sen. Patty Murray (D-WA), a senior budget committee member, and former co-chair of the Super Committee. “They have shown that a deal with them isn’t worth the paper it’s printed on and they are threatening families across America yet again with the prospect of a government shutdown.”

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