Fiscal debate shifts from short-term cuts to long-term fixes

The budget process shifts into a new gear this week with the introduction of House Republicans' 2012 budget plan, which will offer long-awaited specifics on GOP promises for far-reaching entitlement programs.

The proposals will force Senate Democrats and the White House to engage in a long-term fiscal debate and provide what policymakers in both parties consider a welcome opportunity to shift the congressional agenda from a narrow fight over spending cuts this year to a broader debate that includes taxes and the largest government spending programs.

The broader perspective could offer more political room for deal-making, but the two parties remain deeply divided.

On Tuesday, House Budget Chairman Paul Ryan, R-Wis., will unveil a budget plan that he says will cut more than $4 trillion in spending in the next 10 years and overhaul the country's health care entitlement programs. The budget, which will be marked up in committee on Wednesday, could be ready for a vote on the House floor as soon as Friday-the same day a new spending bill must be passed to avert a government shutdown.

Talks on the short-term bill are said to be focused on a final deal that would cut spending for this year about $30 billion below 2010 levels, or about $70 billion below President Obama's request. But conservative House Republicans want deeper cuts, while Democrats are protesting policy riders dealing with reproductive choice and health care reform.

Even as Republicans and Democrats haggle over that bill, with a shutdown looming if they don't reach agreement by midnight on Friday, members of both parties now argue that the short-term focus is hindering their ability to deal with the government's long-term financial problems.

A Republican budget committee aide characterized Ryan's upcoming bill on Tuesday as "an effort to move the conversation from billions to trillions." And an Obama administration official told National Journal that the priority was to "start the hard work of looking forward," adding that "you can't just do this all on 12 percent of the budget"-a reference to the relatively small share of budget taken up by the short-term fight over non-security domestic discretionary spending. "We need real moves against tax expenditures; real moves on the entitlement programs, too," the official said.

For congressional Republicans, shifting the focus to an ambitious long-term budget plan could create an outlet for the energy of conservative members, who are likely to be unhappy about a compromise on the short-term spending bill. Democrats, too, want to broaden the fiscal debate from a sole focus on domestic spending cuts to one that includes cuts in national security spending, a tax overhaul, and the reform of entitlement programs like Social Security and Medicare.

Though the shift could bring benefits to both parties, common ground will still be difficult to find. Rep. Chris Van Hollen, D-Md., the ranking Democrat on the budget committee, took Ryan on in a written statement on Sunday.

"It is now clear that the Republican budget is not bold, but the same old ideological agenda that extends tax breaks to millionaires and big oil companies while cutting our kids' education and health security for seniors," Van Hollen said. "The question is not whether to reduce the deficit, but how. As the Bipartisan Fiscal Commission has shown, any responsible effort requires a balanced approach that addresses both spending and revenue. The Republican budget fails this simple test."

Republicans cast their effort as a much-needed reality check. "The budget will not be framed as slash and burn, not just an exercise in cutting government spending," a GOP aide said. "On the spending side of the ledger, it's about making these programs work. It's a plan to save Medicare, save Medicaid, repairing our safety net."

While details about the tax side of the Republican budget remain hazy, Ryan, a member of President Obama's bipartisan fiscal commission, has endorsed the mechanics of a plan that would close loopholes and lower rates, like the "25-25" plan of his colleague, Ways and Means Chairman Rep. Dave Camp, R-Mich. But he staunchly opposes any efforts to increase overall tax revenue, a move most budget experts say must be a key part of any grand fiscal bargain.

On Monday, Sens. Ron Wyden, D-Ore., and Dan Coats, R-Ind., will introduce comprehensive tax reform legislation along the lines of a bill Wyden introduced last year with now-retired New Hampshire Republican Judd Gregg; the plan served as a model for the fiscal commission's efforts.

Ryan is working to build consensus around his budget in the House-and it is likely the Republican majority can pass a sweeping plan. But his proposals are not likely to be well received in the Senate, where Democrats set the agenda.

A group of six senators, including Budget Chairman Kent Conrad, D-N.D., and conservative Oklahoma Republican Tom Coburn, is leading bipartisan, closed-door talks to craft legislation based on the fiscal commission's report. Those talks are expected to set the stage for an eventual deal on 2012 spending, assuming, of course, a shutdown in 2011 is averted.

"The only way you're going to get there is if you put all of these things, including defense spending, including tax revenue, on the table," Sen. Mark Warner, a Virginia Democrat and a member of the "Gang of Six," said Sunday during a television appearance.

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