Committee approves House budget plan

Thursday - 3/22/2012, 10:44am EDT

The Republican budget plan for fiscal 2013 cleared its first hurdle Wednesday night, when the House Budget Committee voted 19-to-18 for its approval. The bill now moves on to a vote before the full House.

The plan, which was released Tuesday by Rep. Paul Ryan (R-Wis.), the House Budget Committee chairman, calls for extending the federal pay freeze through 2015, increasing federal retirement contributions and cutting the federal workforce by 10 percent.

"Federal employees deserve to be compensated equitably for their important work, but their pay levels, pay increases and fringe benefits should be reformed to better align with those of their private-sector counterparts," according to Ryan's budget proposal.

The GOP plan, a response to the budget proposal released by President Barack Obama Feb. 13, would reduce the federal workforce by 10 percent over the next three years through a "gradual, sensible attrition policy." The Obama administration has added 147,000 new federal workers, the proposal said.

The budget proposal also would ask federal employees to make a "more equitable contribution to their retirement plans," according to the plan. In a press conference Tuesday, Ryan said, "We think that federal workers should have to pay half of their pensions themselves instead of having the private sector, taxpayers, pay for all of it." Currently, employees in the Federal Employees Retirement System pay 0.8 percent of their salaries toward pensions while the agency contributes 11.7 percent for most employees.

These proposals combined would save approximately $368 billion over 10 years, the proposal said.

Other elements of the measure are likely to advance this spring at least in the GOP-dominated House as parts of a 10-year, $261 billion package of cuts to replace deep, across-the-board spending cuts set to hit the Pentagon and domestic agencies in January. Those cuts were required under last year's budget pact because of the failure of the deficit "supercommittee" last fall.

This spring's substitute cuts are likely to target, among other programs, food stamps, federal employee pensions, farm subsidies and a proposal to require higher-income Medicare beneficiaries to pay higher premiums. Some of those ideas have been marched through the House before, only to die in the Democrat-controlled Senate. But the agriculture and food stamp cuts haven't and may prove troublesome.

Democrats on the House Budget Committee said the GOP plan is harmful to the economy. "Like last year, the Republican budget ends the Medicare guarantee, shifts the burden of rising health care costs onto seniors, and shreds our nation's social safety net - all in order to expand tax breaks for millionaires and protect special interests. These are bad choices for America," the Democrats said on their website.

The budget measure also would force new austerity on an upcoming round of spending bills for domestic agencies without regard to spending limits carefully negotiated with Obama and Senate Democrats last summer.

The GOP plan would use sharp cuts to domestic programs to shrink U.S. deficits to $3.1 trillion over the coming decade, less than half the size of those proposed by Obama last month.

But it does so in ways that would be unprecedented by relying on assumptions like cutting transportation outlays from $93 billion this year to just $50 billion in the 2013 budget year starting in October. Its cuts to the Medicaid health care program for the poor and disabled would total more than $800 billion over the coming decade, which Democrats warned would mean that many frail, elderly people would lose nursing home care.

The main budget document, called a budget resolution, sets the parameters for follow-up legislation on spending and taxes. Even though its broader goals usually are not put into place, it is viewed as a statement of party principles.

Ryan's plan is more of a campaign manifesto than a governing document. It is a dead letter in the Senate and is not even a starting point for a dialogue with Obama. For one thing, it breaks faith with last summer's hard-fought budget pact, seeking to impose new 5 percent cuts on domestic agencies whose operating budgets will be written by the appropriations committees later this year.

"It would be difficult to overstate the radicalism of the domestic cuts proposed by the House budget," acting White House budget director Jeff Zients said. "Over a decade, the resolution would cut over $1 trillion in non-defense spending on top of the reductions the president has already signed into law."

The measure is, however, more generous to the Pentagon, calling for restoring more than half of the nearly $500 billion cut from defense accounts over the coming decade by last year's budget pact. But it fails to address a $300 billion-plus hole in Medicare's budget under an archaic formula for physician reimbursements.

The full House is expected to vote on the bill next week. The Senate has no plans for a companion measure.

The Associated Press contributed to this story.

RELATED STORIES:

GOP budget plan extends federal pay freeze, changes retirement benefits

Pay raise, increased retirement contributions in President's FY2013 budget request

Pay and benefits tracker