GOP House 'Debt Reduction Plan' Gives Obama Power to Raise the Debt Limit Without a Prior Vote of Congress, Reduces the Top Income Bracket from 35 Percent to 29 Percent or Less, Slows the Growth of Social Security Payments, and Cuts at Least $500 Billion from Medicare, Medicaid and Other Health Programs

Huge Deficit-cutting Bill Sails Through GOP House

July 20, 2011

AP - Defying a veto threat, the Republican-controlled House voted Tuesday night to slice federal spending by $6 trillion and require a constitutional balanced budget amendment to be sent to the states in exchange for averting a threatened Aug. 2 government default.

The 234-190 vote marked the power of deeply conservative first-term Republicans, and it stood in contrast to calls at the White House and in the Senate for a late stab at bipartisanship to solve the nation's looming debt crisis.

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Democrats said the measure, with its combination of cuts and spending limits, would inflict damage on millions who rely on Social Security, Medicare and other programs.

"The Republicans are trying to repeal the second half of the 20th century," said Rep. Sander Levin, D-Michigan.

Boehner played a muted role in public during the day. He did not speak on the House floor on the legislation, but issued a statement afterward saying,

It "provides President Obama with the debt limit increase he's requested while making real spending cuts now and restraining future government spending and debt that are hurting job growth."

He did not discuss what alternatives he had in mind, although the Senate's top two leaders have been at work on one that would let the president raise the debt limit without prior approval by Congress.

The "Gang of Six" briefed other senators on the group's plan after a seemingly quixotic quest that took months, drew disdain at times from the leaders of both parties and appeared near failure more than once.

It calls for deficit cuts of slightly less than $4 trillion over a decade and includes steps to slow the growth of Social Security payments, cut at least $500 billion from Medicare, Medicaid and other health programs and wring billions in savings from programs across the face of government.

It envisions tax changes that would reduce existing breaks for a number of popular items while reducing the top income bracket from the current 35 percent to 29 percent or less.

The tax overhaul "must be estimated to provide $1 trillion in additional revenue to meet plan targets," according to a summary that circulated in the Capitol.

Some Republicans noted a claim contained in the summary that congressional bookkeeping rules could actually consider the plan a tax cut of $1.5 trillion. That credits sponsors for retaining income tax cuts enacted at all income levels when George W. Bush was president.

The group of six includes three Democrats, Sens. Kent Conrad of North Dakota, Mark Warner of Virginia and Dick Durbin of Illinois, a member of the leadership. The three Republicans, all conservatives, are Sens. Mike Crapo of Idaho, Tom Coburn of Oklahoma and Saxby Chambliss of Georgia, who has a particularly close relationship with Boehner dating to their days together in the House.

In recommending higher government revenues, Republicans in the group challenged party orthodoxy that has held sway for two decades, ever since President George H.W. Bush memorably broke his "no new taxes" pledge to make a deficit reduction deal with congressional Democrats.

In the years since, refusal to raise taxes has become a virtually inviolable article of faith among Republicans, and used by them and their allies in countless political campaigns against Democrats.

Recently, Republicans who voted to repeal a tax subsidy for ethanol production drew criticism from Grover Norquist, a prominent anti-tax activist, for not applying the savings to deficit reduction.

Even so, in the hours after the Gang of Six briefed other lawmakers on their plan, at least one member of the Republican Senate leadership, Lamar Alexander of Tennessee, signed on as a supporter. So, too, did Sen. Kay Bailey Hutchison of Texas.

"We have an opportunity to act like statesmen and avoid a debacle on Aug. 2, and it seems to me that all of our efforts should be focused on that," added Sen. Roger Wicker, R-Miss.

He and others said the plan was well-received at a weekly closed-door meeting of GOP senators.

Obama stopped well short of endorsing the plan, saying administration officials were analyzing it and not all details were known. But he said it included "a revenue component" along with savings in Medicare and Social Security, making it the sort of balanced approach he has long advocated.

He also noted that the Senate's two top leaders have been cooperating on a measure that would allow him to raise the debt limit without a prior vote of Congress while also setting up a special committee to recommend cuts from federal programs, including Social Security and Medicare.

"That continues to be a necessary approach to put forward. In the event that we don't get an agreement, at minimum, we've got to raise the debt ceiling," he said.