On Capitol Hill, budget vs. budget

House Republicans and Senate Democrats unveiled clashing budgets Tuesday that highlight the ideological chasm between the two parties on taxes, spending and the size of government.

The plan from Rep. Paul Ryan (R-Wis.), chairman of the House Budget Committee, would slice spending by $5.7 trillion, cut the top tax rate to 25 percent and balance the budget in 10 years.

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Its Democratic counterpart, from Senate Budget Committee Chairwoman Patty Murray (Wash.), raises nearly $1 trillion in new taxes, adds new stimulus spending and does not project any date at which balance will be reached.

Murray, who released details but not a full document, also axed nine years of the sequester, meaning her budget would actually not cut spending compared to the Congressional Budget Office baseline.

Senate Democrats have not passed a budget since 2009.

Murray and Ryan paid lip-service to finding common ground, but the distance between their visions offers scant hope that the budget process will achieve any kind of deficit bargain.

Absent a deal, another fiscal crisis looms for this summer, when the nation’s $16.7 trillion debt ceiling will again be hit. Senate GOP Leader Mitch McConnell (Ky.) predicted a showdown, saying Republicans would use the ceiling to win entitlement reforms from President Obama.

In his budget, Ryan accused Democrats of “crony politics” and of stealing from future generations, while Democrats said the 2012 GOP vice presidential candidate was trotting out the same proposals rejected by voters at the polls last year.

“It’s the same old song, doubled down from what they ran on for the last two years,” Murray said of the Ryan plan.

Both exuded confidence that their caucuses would pass their budgets, though both face tough challenges.

Some Senate Democrats facing reelection have expressed reservations about voting for tax hikes without deep spending cuts, while some House Republicans may think Ryan’s plan doesn’t go far enough.

Asked if her budget would win more than 50 Democratic votes, Murray laughed and replied, “I feel very good that we’ll have a great budget out next week.”

“It reflects what we’ve all been talking about for a long time, in terms of a balance between growing our economy and dealing with our budget deficit responsibly,” she said after briefing her colleagues on Tuesday.

While White House press secretary Jay Carney did not explicitly endorse the Democratic budget in his briefing, Murray said Obama was “very supportive of our path that we’re moving down” during a closed-door meeting with Democrats on Tuesday.

A handful of Democrats who could be swing votes on the Senate budget offered positive comments Tuesday. Sen. Mary Landrieu (La.), a Democrat who could face a tough reelection race in 2014, praised the Murray plan as a strong rebuttal of the Ryan budget, adding, “the Senate and the House will have a very stark choice between the two.”

Sen. Joe Manchin (D-W.Va.), who won reelection in a heavily Republican state last year, said the Murray plan was “balanced.”

“There is a fairness to be had and her plan addresses that,” he said.

Overall, Murray argues that her budget cuts $1.85 trillion from deficits over 10 years.

But it would spend $100 billion on economic stimulus in the form of infrastructure spending and job training. And once the sequester cuts are turned off, it appears to reduce deficits by about $800 billion, using the CBO baseline.

More details on the tax plan were expected Wednesday when the committee begins its formal markup of the budget.

Sen. Jeff Sessions (Ala.), the ranking Republican on Murray’s panel, said the reported details of her plan indicated Murray’s budget would increase taxes to pay for more federal spending.

“Can it really be this is all they have developed after four years of not producing a plan?” he said.“If that is so, no wonder why they won’t make their proposal public until after the committee meets.”

Murray’s budget also will contain reconciliation instructions on tax reform, a parliamentary move that could allow the budget, which cannot be filibustered in the Senate, to become the legislative vehicle for a tax reform bill. 

This would also allow a tax bill to pass the Senate by a simple majority vote, because reconciliation bills cannot be filibustered.

Ryan’s budget, which is similar to the documents he has produced the last two years, would cut spending from 22.2 percent of the economy to 19.1 percent by 2023. 

It includes virtually the same Medicare plan that Ryan put forward last year, giving seniors the option of purchasing private insurance on an exchange and receiving “premium support” payments.

People age 54 and younger would see changes starting when they retire in 2024. Ryan had floated applying the changes to those 55 and younger but faced resistance from his caucus.

The Ryan budget once again would make no changes to Social Security but would require the president and Congress to come up with plans to ensure the retirement system remains solvent.

The budget would also reduce the top individual tax rate from 39.6 to 25 percent as part of an overhaul of the tax code that would eliminate breaks within the system. Like last year’s budget, the overhaul would leave two remaining rates at 10 and 25 percent.

The Ryan budget counts the $600 billion in new tax revenue raised under the January “fiscal cliff” deal as budgetary savings. Ryan also counts hundreds of billions of dollars in additional revenue being raised due to rosier economic growth projections by CBO.

The main differences from last year’s budget are the new revenues from the fiscal-cliff deal, lower healthcare spending measured by CBO, lower pension benefits for all federal workers and an extension of existing budget caps to two additional years at the end of the budget window.

The details on both the spending and revenue side are sparse, with Ryan deferring to the committees of jurisdiction. For example, it does not spell out what tax breaks would be closed to lower tax rates without adding to the deficit.

Ryan did revise some of his budget rhetoric. 

Most notably, this year’s budget does not contain language from last year about a “hammock” culture of dependency.

GOP presidential candidate Mitt Romney’s campaign was severely hurt by his characterization, captured surreptitiously on video, that “47 percent” of Americans are dependent on government and see themselves as victims.

Russell Berman contributed to this report.