Jan. 23 (Bloomberg) -- House Republicans want to force “a big down payment on the debt crisis” during debate on spending cuts and extending the U.S. government’s borrowing authority, said Budget Committee Chairman Paul Ryan.
Ryan said the debt-limit issue, the scheduled March 1 start of $110 billion in automatic spending cuts -- half in defense -- and the need to extend the government’s spending authority past March 27 “are the points” to “force the conversation” on reducing the debt.
What “I expect to come out of that is a big down payment on the debt crisis,” Ryan, a Wisconsin Republican, said at a Wall Street Journal breakfast today in Washington. The Republican-led House later voted, 285-144, to suspend the nation’s $16.4 trillion borrowing limit until May 19. The measure goes to the Senate, where leaders of the Democratic majority said they will support it.
Republicans have sought to cut federal spending by partially privatizing the Medicare health insurance program for the elderly and disabled and slowing Social Security cost-of-living increases. Ryan, the 2012 Republican vice presidential nominee, said his party will demonstrate “realistic expectations while being reasonable” following President Barack Obama’s re-election and Democratic victories that added two seats to their Senate majority.
“We have to set our expectations accordingly” and “fight for those things” Republicans stand for “in a realistic way,” Ryan said. “Our job as we see it is to get spending under control, to get some entitlement reforms” and “make sure we don’t have a debt crisis,” he said.
Ryan said House Republicans will pass a spending plan that would balance the government’s budget in 10 years. He said that is achievable without additional tax revenue, which Obama insists must accompany further spending cuts or reductions in Social Security or Medicare benefits.
Democrats have “already gotten the revenues,” Ryan said, referring to tax increases that took effect at the start of this year. “To get this debt and deficit under control, you cannot mathematically fix this problem through revenues.”
Changes to Medicare and other entitlements that yield long-term budget savings instead of short-term spending cuts “is the sweet spot” and ‘is where hopefully this ends up going,” he said.
Representative Chris Van Hollen, the top Democrat on the House Budget Committee, said that during a debate on revising the tax system Democrats will press Republicans to close the loopholes that Ryan and Mitt Romney, the party’s presidential nominee, promised to end during last year’s election campaign.
“Every loophole that they talked about is still out there, so why shouldn’t we close loopholes for the purpose of reducing the deficit” to avoid deeper cuts in social programs instead of financing lower tax rates, the Maryland lawmaker told reporters.
Under Ryan’s scenario, Republicans would “get rid of tax breaks from Swiss bank accounts in order to lower the tax rates for people with Swiss bank accounts,” Van Hollen said.
The debt-limit measure the House passed includes a provision to prod the House and Senate to pass budgets by April 15. If that doesn’t happen, the bill calls for withholding pay for all members of Congress.
Since taking control of the House in 2011, Republicans have passed budgets that would partially privatize Medicare by offering retirees a chance to buy private insurance. The changes would affect people age 55 and younger. Those budgets have stalled in the Senate.
Ryan declined to say whether balancing the budget over the next decade would require applying those changes to people closer to 65, the current eligibility age for Medicare.
Representative John Fleming, a Louisiana Republican, suggested yesterday that applying the Medicare changes to people as old as 59 would be a way to help achieve such budget savings in 10 years.
Ryan said it “would be premature to speculate” about changing the timetable for Medicare changes. “I am not going to get into it,” he said.
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