20110418

House Approves Republican 2012 Budget Plan

Washington, DC, 18 April 2011 – The House of Representatives passed a Republican budget plan that seeks deep spending cuts for fiscal year 2012 and calls for an overhaul of Medicare. The fiscal year 2012 budget resolution, H Con Res 34, ($1.019 trillion) allocates less discretionary funding than provided for in fiscal year 2010 ($1.091 trillion) and in the President’s budget request ($1.121 trillion).



Passed by a largely party line vote of 235-193 with not a single Democratic vote in support and four Republicans – Reps. Denny Rehberg, R-MT, Walter Jones, R-NC, David McKinley, R-WVA, and Ron Paul, R-TX, joining in opposition.



The resolution sets up discretionary funding levels at pre-fiscal year 2008 levels, which if set for individual programs as opposed to overall caps could be potentially damaging. At this point, it is too early to appreciate which way appropriators may lean.



Adoption of the House Republican plan sets up the likelihood of conflict with both the White House and the Democratic-controlled Senate over spending priorities for the coming fiscal year.



Senate Democrats are expected to unveil their 2012 budget plan after returning from the two-week Easter/Passover spring recess in May.



The budget resolution does not have the force of law, but sets guidelines for other legislation, including spending bills and tax or income bills. A critical function of the resolution is to set parameters for the House Appropriations Committee and its Subcommittees as they plan their fiscal year 2012 spending bills.



Additionally, the resolution includes a number of policy provisions, including plans to shift future Medicare coverage to the private market and a call for a 10 percent reduction in the top individual and corporate tax rates.



Beginning in 2022, under the Republican budget plan, senior citizens and the disabled would receive an annual stipend that would be used to buy private insurance plans of their choice, with stipend funding increasing based on the rate of inflation. President Obama has rejected that proposal indicating that the government could honor commitments and control costs by expanding the authority of a panel of outside experts created under the health care law, depoliticizing payment decisions.



House Democrats offered an alternative proposal that would have continued Medicare without creating a voucher program, set a freeze in non-security discretionary spending for five years and balanced the budget by fiscal year 2018 that was rejected by a largely party-line vote of 166-259.

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