Six groups receive grants to pursue budget solutions

The budget plans will be presented later this year during a fiscal summit held by the Peterson Foundation. Each of the plans will be compared to the baseline that the Congressional Budget Office puts out later this month. 

“This initiative will help provide citizens and our leaders with a variety of possible reforms so we can begin to implement sensible solutions before a major financial crisis forces us to make much more painful choices,” said Michael A. Peterson, the foundation’s vice president. 

Lawmakers on Capitol Hill are kicking off a budget battle, with House Republicans vowing to slash spending back to fiscal 2008 levels and cut between $60 billion and $100 billion this year. 

The president’s budget proposal for fiscal 2012 is expected out on Feb. 14. 

Meanwhile, House Republican plans to reduce the deficit are beginning to emerge. 

Republican Study Committee (RSC) Chairman Jim Jordan (Ohio) unveiled a plan Thursday that would trim federal spending by $2.5 trillion over 10 years. 

He said the RSC will be using the plan as a “marker” in the fight over the continuing resolution that will fund the government after March 4.

“We went to members of RSC and said, ‘Bring us your ideas.’ … While it doesn’t fix everything, it is a good first step,” Jordan said of the plan.

The RSC’s deficit-reduction plan would reduce spending for the rest of 2011 to levels set in 2008 and impose 2006 spending levels for the 10 years after that. The plan doesn’t include adjustments for inflation.

“We want to see a full $100 billion in cuts [for 2011],” Jordan said.

Meanwhile, the EPI on Thursday produced a critical analysis of a plan by House Budget Chairman Paul Ryan (R-Wis.) that it says would raise taxes on those earning under $200,000 while cutting millionaires’ taxes in half, providing the top 0.1 percent of earners making $3 million or more an average yearly tax cut of $1.7 million. 

The plan also would replace the corporate income tax system with an 8.5 percent business consumption tax, “which would be passed on to consumers in the form of a value-added tax that would fall most heavily on low- and middle-income people,” the EPI report said.  

House Republicans have already fallen behind on their plans to hold a floor vote by late January on legislation rescinding already appropriated funds in the stimulus and other legislation. It’s now more likely that the rescission package will be folded into a measure to keep the government funded beyond March.

Erik Wasson contributed to this report.