House approves $3.5 Trillion GOP budget

By Susan Davis, USA TODAYUpdated 34m ago

WASHINGTON – The U.S. House approved on a strict party-line vote Thursday a Republican budget plan that would restructure Medicare, enact deeper cuts in federal spending and rewrite the tax code for individuals and corporations.

The GOP set up a fundamentally different spending plan than President Obama's that further highlights the ideological differences between the two sides.

"It is so rare in American politics to arrive at a moment in which the debate revolves around the fundamental nature of American democracy and the social contract. But that is exactly where we are today," said House Budget Committee Chairman Paul Ryan, R-Wis., who authored the plan. The proposal passed 228-191, with no Democrats supporting the plan and 10 Republicans voting against it.

BLOG: White House blasts Ryan budget plan
The House GOP's budget, which is non-binding and will not become law, would restructure Medicare for future beneficiaries to allow those 55 and younger to opt out of the system and purchase private insurance with a federal subsidy. On other health care policies, the Ryan budget would fully repeal the president's health care law and turn Medicaid into a block grant program with more state control of how the funds are spend.

There are no tax increases in the budget, which would permanently extend the Bush tax cuts and consolidate the six individual tax brackets to two — a 10% and a 25% bracket — and reduce the corporate tax rate to 25%. It also calls for deeper cuts in federal spending programs affecting everything from farmers' subsidies to college loans.

"People in this country are looking, are desperate to see a strong signal from Washington that we are prepared to make the tough decisions necessary to solve the nation's fiscal crisis," said Majority Leader Eric Cantor, R-Va., noting that Senate Democrats have not approved a budget resolution in three years.

Obama's budget proposal calls for higher taxes on the wealthiest of Americans, closing tax loopholes and greater investments in transportation and energy infrastructure.

It does not offer any sweeping proposals to overhaul entitlement programs because Democrats expect the health care law will help contain health care costs when it is fully implemented — if the Supreme Court does not strike it down. Neither Ryan's nor Obama's budget would eliminate the deficit in 10 years.

The House unanimously rejected Obama's budget in a vote Wednesday. House Minority Leader Nancy Pelosi, D-Calif., said Democrats voted against it because it was a "caricature" of the president's budget by Republicans citing his numbers but not his policies.

Democrats cast the two budgets as one that protects the wealthiest and most privileged in America vs. one that calls on all Americans to sacrifice.

"This is all about choices, and we don't think it's better to provide tax breaks to millionaires while we are ending the Medicare guarantee for seniors," said Rep. Chris Van Hollen, D-Md., the ranking Democrat on the Budget Committee.

Congressional Democrats intend to use the Ryan budget as a political issue in races across the country this year. As a sign of its potency, Republicans running statewide in competitive races, such as former representative Heather Wilson in New Mexico's Senate race, have declined to endorse the Ryan budget, even though they applaud his efforts.

House Democrats enlisted actor Martin Sheen to make a video defending Medicare in a petition effort started Monday seeking 1 million signatures in support of the program. The Democratic campaign operation has put up a billboard in Ryan's Wisconsin hometown of Janesville accusing the Budget chairman of "protecting millionaires over Medicare," and it has targeted 41 Republican incumbents in an automated call campaign.

House approves GOP budget