Feb. 15 (Bloomberg) -- House Republican Budget Committee Chairman Paul Ryan told White House budget director Jacob Lew the president has “disappointed us all” with his $3.7 trillion budget request because the plan doesn’t go far enough on spending cuts.
“Why did you duck?” Ryan asked at a House Budget Committee hearing today where Lew defended the proposal President Barack Obama unveiled yesterday. “You know the drivers of our debt are entitlement programs, and yet you do nothing to address that,” Ryan said.
The fight over government spending between Democrats and Republicans intensified as Lew met with lawmakers on the president’s fiscal 2012 budget and House Republicans began debating their plan to cut $61 billion in spending for the last seven months of this fiscal year, which began Oct. 1. Democrats say those reductions are excessive.
Lew told lawmakers the president’s budget puts the nation “on a path toward fiscal sustainability” by making significant spending cuts while investing in areas such as education, infrastructure and research to fuel economic growth.
“We need to demonstrate to the American people we can live within our means and invest in the future,” Lew said.
He said more work is needed to pay down the nation’s debt and address long-term fiscal challenges. “Cutting our spending and deficits requires us to put political differences aside,” he said.
Obama’s budget for 2012, his first since Republicans took control of the House, seeks to narrow deficits by more than $1 trillion in the coming years. The plan includes spending cuts to energy, transportation, housing and other programs popular with his fellow Democrats.
The spending plan also would allow income and capital gains taxes to rise after 2012 for individuals earning more than $200,000 annually and married couples making more than $250,000.
The president’s budget doesn’t offer ideas to overhaul Medicare, Medicaid or Social Security, the entitlement programs that represent about 40 percent of the federal budget.
House Republicans vowed to propose broader program cuts in an alternative budget they plan to release in April.
“Republicans will not punt,” House Speaker John Boehner of Ohio told reporters today. Pressed about details of possible changes to Medicare and Social Security, Boehner declined to give specifics, saying he wanted to let the Budget Committee members “do their work.”
Boehner also said he wasn’t concerned about whether budget cuts would result in the loss of some federal jobs. “So be it, we’re broke,” he said.
House Republican leaders including Boehner and Ryan issued a statement saying their budget “will include real entitlement reforms.”
“By taking critical steps forward now, we can fulfill the mission of health and retirement security for all Americans without making changes for those in or near retirement,” they said.
Obama’s budget faced bipartisan criticism at a Senate Budget Committee hearing.
The panel’s chairman, Senator Kent Conrad of North Dakota, said the president’s budget took “modest steps” to address the fiscal situation. “I wish there had been even more.”
“What I am concerned about is the longer term,” he said.
Conrad said he was looking for a proposal as encompassing as the $3.8 trillion debt-reduction plan presented to a presidential commission late last year. The plan, ultimately rejected by the commission, would have cut Social Security benefits and Medicare.
The committee’s top Republican, Senator Jeff Sessions of Alabama, told Lew that Obama’s plan “was a very unserious response to a very serious problem.”
“This could have been the president’s moment to rally diverse political factions,” he said.
The deficit for the current fiscal year is forecast to hit a record $1.6 trillion -- 10.9 percent of gross domestic product. Under Obama’s plan it would be $1.1 trillion in 2012, 7 percent of GDP. The budget forecasts the deficit will be $627 billion in 2017, or 3 percent of GDP, a level the administration says is sustainable.
The shortfall would grow in subsequent years, reflecting the impact of baby boomers drawing Social Security payments and Medicare benefits.
Ryan said the president’s budget was forecasting economic growth in 2013 that was 1.3 percentage points higher than what the Congressional Budget Office projects, and that the administration was claiming economic growth would occur in a year when it would raise taxes.
“History doesn’t square with your comments,” Ryan said.
The top Democrat on the House Budget Committee, Representative Chris Van Hollen, called Obama’s plan “a tough love budget” that cuts spending and invests in the future.
He said Obama’s budget offers a “stark contrast” to House Republicans’ spending proposal for the rest of fiscal 2011 that ends Sept. 30.
“That plan would recklessly slash important programs immediately, disregarding the impact to American workers and our fragile recovery,” Van Hollen said.
House Republican leaders last week increased their proposed spending cuts for this year to $61 billion from $35 billion after rank-and-file members demanded deeper reductions.
The revised plan outlined Feb. 11 would end more than 100 government programs and cut spending on areas including the environment, health care, energy and transportation.
Representative Mike Simpson, an Idaho Republican, said Obama’s plan fails to fix the nation’s fiscal problems because it doesn’t address entitlement programs or get to a balanced budget.
“If this was the tough love that my father showed me when I was young, I’d still be a juvenile delinquent,” he said.
To contact the reporter on this story: Catherine Dodge in Washington at Cdodge1@bloomberg.net,
To contact the editor responsible for this story: Mark Silva at email@example.com