Democrats, Republicans Brace for Budget Battle

While Republicans call for deep spending cuts, Democrats are worried that their brinkmanship could lead to a government shutdown.

As the Republican controlled House of Representatives voted to enact several tens of billions in spending cuts this week, Democrats are preparing for a tougher budget fight in the weeks ahead. Senior Democrat Chris Van Hollen of Maryland has warned that as many as 800,000 Americans could lose their jobs if Republicans insist on making “reckless” spending cuts. Republicans warn of a looming debt crisis unless serious cutbacks are made.

On a largely partisan vote, the lower chamber of Congress voted to cut some $60 billion in spending from the current budget, or 14 percent of discretionary domestic spending. The Democratic majority in the Senate is likely to block the austerity measures.

Earlier in the week, President Barack Obama introduced his budget for the next fiscal year which was declared dead by House speaker John Boehner mere days afterward. “This budget’s going to kill job creation in America because it spends too much, borrows too much and taxes too much,” he told Fox News’ Hannity.

Whereas the president has proposed $100 billion in yearly spending cuts for the next decade, Republicans intend to rein in the deficit much more aggressively. According to Senator Chuck Schumer on New York, “Speaker Boehner seems to be on a course that would inevitably lead to a shutdown.”

Unless a compromise is reached by March 4, when current funding expires, the nation could see a repetition of 1995 when President Bill Clinton vetoed a Republican spending bill that cut education, environmental protection, Medicare and public health funding. For two months, nonessential federal services were suspended while Republican approval rates plummeted. President Clinton comfortably won reelection the very next year.

In an appearance on CBS’ Face the Nation, Congressman Paul Ryan of Wisconsin, who chairs the House budget committee, said his party is not “looking for a government shutdown. But at the same time,” he stressed, “we’re also not looking at rubber stamping these really high elevated spending levels that Congress blew through the joint two years ago.”

The president has proposed to freeze discretionary spending levels for the next five years. Republicans believe that current domestic spending is far too high and stifling job creation.

On the same program, Congressman Van Hollen agreed that government has to rein in spending but he argued that drastic cuts this year could damage a still fragile economic recovery. He said that Republicans were taking the “wrong approach” toward mending the economy and proposed to close tax loopholes to increase revenue.

“We think we need to get the economy fully in gear, put together a plan now for cuts, and frankly we need to look at the revenue piece,” he said. “We need to close some of the tax loopholes for special interests like the oil companies — $40 billion worth of loopholes.”

With a deficit projected to reach $1.6 trillion next year, far more extensive tax or spending reforms are necessary to gain fiscal balance however. Ryan noted that entitlement programs are the main drivers of the nation’s “huge fiscal problem” and was disappointed that the president didn’t propose any changes to any of them in his budget. “We’re going to lead and propose serious solutions to this country’s problems so we can get growing again,” he announced.

Like the Democratic leader in the Senate, Van Hollen denied that Social Security was responsible for the rise in the deficit. “We’re not going to balance the budget on the backs of Social Security beneficiaries,” he professed. Democrats are opposed to reforming public pensions and the president has promised to preserve the current system “forever.”

The costs of Medicaid, Medicare and Social Security will skyrocket in the next decade and eventually account for half of all federal expenditures unless their scope is reduced. Republicans have urged entitlement reform but refused to volunteer specifics.