Bipartisan group offers alternative to GOP budget

Associated Press

WASHINGTON (AP) — A bipartisan budget plan to cut the deficit by $4 trillion over 10 years with a mix of new tax revenues and spending cuts across the federal budget is headed for a House vote, but it is likely to be rejected by Republicans against higher hikes and Democrats opposed to curbs on Medicare and Social Security benefits.

The proposal by Reps. Steve LaTourette, R-Ohio, and Jim Cooper, D-Tenn., is modeled after a much-praised plan by the co-chairmen of President Barack Obama's 2010 deficit-reduction commission.

The plan is one of several alternatives to a budget-slashing Republican plan that comes to the House floor Wednesday. Votes are expected Thursday, but the underlying GOP plan is dead on arrival with the Democratic Senate.

The bipartisan measure calls for $1.2 trillion in tax increases over the coming decade, curbs on rapidly growing federal health care programs, new cuts to agency budgets and cuts to other programs like farm subsidies and federal employee pensions. It broadly mirrors a plan conceived by former White House chief of staff Erskine Bowles, a Democrat, and former GOP Sen. Alan Simpson of Wyoming, the co-chairmen of Obama's deficit commission.

The bipartisan Simpson-Bowles plan won a majority vote in Obama's 18-member deficit panel, though it fell short of the supermajority 14-vote tally required to win the commission's official endorsement. But the plan won the votes of conservatives like Sen. Tom Coburn, R-Okla., and liberals like Sen. Dick Durbin, D-Ill., which was seen as a moral victory.

While it's sure to fail on Thursday, the measure is regarded by many experts as a template for any budget plan that might ultimately pass into law, and it broadly resembles the core concepts discussed by Obama and House Speaker John Boehner, R-Ohio, in "grand bargain" talks on the budget last summer.

But the Simpson-Bowles plan, hatched in the wake of the Democrats' drubbing in the 2010 midterm elections, received a chilly reception from the White House and leaders of both parties, and that's unlikely to change this week.

"Unfortunately, the proposal fails to confront the key driver of the debt: the explosive growth of government spending on health care," said House Budget Committee Chairman Paul Ryan, R-Wis. For starters, the LaTourette-Cooper plan would leave in place Obama's health overhaul law.

From a technical perspective, the measure leaves Social Security alone. But it contains a policy statement endorsing the Simpson-Bowles plan, which called for raising the retirement age and reducing annual cost-of-living increases.

"It has real entitlement reform and real revenues," Cooper said in an interview. "And those are two essential elements of any viable budget. It's shared sacrifice. Everyone is asked to help make our country stronger, and that's why it's bipartisan."

But it's those curbs on so-called entitlement programs — which include Medicare, Medicaid and Social Security — that seem likely to limit Democratic support, just as most Republicans will recoil from the measure's proposed tax increases.

"It's kind of dicey (politically), but it's a bipartisan plan and something's got to get done," said supporter Mike Simpson, R-Idaho, who plans to vote for both the bipartisan measure and the official GOP plan authored by Budget Chairman Ryan. "The reality is that in the long run, (Ryan's budget) won't get done."

Many lawmakers and budget experts agree that it will take a plan mixing both new revenues and spending cuts to wrestle the deficit under control — at least any plan that can pass with votes from both Democrats and Republicans.

The measure, like the Simpson-Bowles plan, calls for a tax overhaul that would bring the top tax rate down from 35 percent to 29 percent or lower, financed by repealing various tax breaks, deductions and credits. Overall revenue would rise, since the revenue raised by eliminating dozens of tax breaks would exceed the revenue lost by lowering rates. Some supporters of revamping taxes say revenues would be even higher because it would spur economic growth.

The measure would raise less new revenue than the Simpson-Bowles measure, which called for a $2 trillion tax increase over 10 years.

In fact, the revised plan is closer to a "grand bargain" framework pressed by House Speaker Boehner in talks with Obama last summer. Boehner at the time supported an up to $800 billion revenue increase. The talks collapsed.

"This is a way to basically say: 'We've got to do something about the deficit, we've got to do it in a bipartisan manner. We've got to have both more revenue and spending cuts," said Rep. Daniel Lipinski, D-Ill. "No one has any belief that this is going to pass, but I think it's important to sort of set that marker out there to say, 'There are some of us who are willing to sit down and work something like this out in a bipartisan manner,' which I think we need to do."

Added Cooper, "If we had a secret ballot, Simpson-Bowles would pass overwhelmingly."

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