Conservative GOP senators would balance budget in nine years

Conservative Republican senators offered a proposal Tuesday that would balance the budget in nine years by dramatically reducing spending. 

The proposal offered by freshman Sen. Pat Toomey (R-Pa.) and other conservatives would reduce government spending to 18.5 percent of the nation’s gross domestic product and assumes a relatively high level of economic growth in order for the country to reach a modest surplus by 2021. Like the House GOP budget, it does not raise taxes.

The proposal largely steers clear of major entitlement reforms, which several polls suggest are unpopular with voters. 

{mosads}The plan avoids reforming Medicare, contrasted with the voucher system proposed by House Budget Committee Chairman Paul Ryan (R-Wis.). 

Toomey called it “a necessary first step,” but acknowledged that a long-term fiscal fix will require “broader reforms than we have in this budget.” He said the revenue assumptions were “well within the historical norm.”

The proposal further complicates Washington’s huge fight over the budget. The White House and Congress are trying to reach a deal that would allow the nation’s $14.3 trillion debt ceiling to be raised even as they try to hash out a budget for 2012. 

Republicans are demanding significant spending cuts in exchange for votes to raise the debt ceiling, though all of the GOP budgets produced so far would necessitate that the debt ceiling be raised to allow for more borrowing. 

Vice President Joe Biden is set to meet with a group of lawmakers Tuesday for a second time to try to work on a deal.

Toomey was joined at the press conference unveiling the budget by Sen. Jim DeMint (R-S.C.) and three fellow freshmen — Sens. Mike Lee (R-Utah), Marco Rubio (R-Fla.) and Ron Johnson (R-Wis.). Sens. David Vitter (R-La.), Tom Coburn (R-Okla.), Richard Burr (R-N.C.) and James Risch (R-Idaho) are also listed as co-sponsors of the measure.

Toomey distinguished his plan from the House GOP budget crafted by Ryan, which does not project a surplus until 2040, but does propose major reforms to Medicare. 

“His goal is different than the one we set forth in this budget,” he said. “His goal is long-term, it’s permanent solvency, and he walks through structural reforms that would achieve that … I see this as a different focus.”

Ryan’s plan has faced opposition from some Republicans, including Sen. Susan Collins (R-Maine), who said she did not support it. But Toomey said he would vote for the Ryan bill if it came to the Senate floor. 

Senate Democrats think many Republicans in the Senate would vote against Ryan’s budget, given the chance, and hope to schedule a vote. 

The Toomey budget would reduce non-defense discretionary spending to 2006 levels in 2012, and freeze it at that level for the next six years. After that point, that spending would be indexed to the consumer price index.

“We felt as a group it was important for us to show, as senators, it was possible to balance the budget within 10 years,” said DeMint. “They want to see the political will that we can balance our budget.”

They also used the event to bash Democrats for failing to offer a competing proposal, as Johnson invited them to “get serious” about spending.

Rubio said he expected Democrats to quickly criticize the proposal, but said, “I hope when they email you their talking points they also email you their budget proposal … I believe these proposals should be met by counterproposals.”

Toomey actually touted his budget as spending more on Medicare than either Obama’s or Ryan’s plan. However, while it would repeal the healthcare reform law, it would also retain its Medicare cuts and mandate changes to medical malpractice laws.

On Medicaid, it would implement a block-grant program to the states, while gradually reducing Medicaid spending to $14 billion above fiscal 2008 levels by 2019.

It also would halve the number of individual tax brackets from six to three, with the top rate falling to 25 percent from the current 35 percent level. It also would lower the corporate tax rate from 35 percent to 25 percent. It also would index the alternative minimum tax to inflation.

On defense, the plan would adopt the cuts identified by Defense Secretary Robert Gates, and also assumes the complete withdrawal of American forces from Iraq and Afghanistan by 2018. It also would require that any future expenditures of supplemental war spending after that exit would have to be offset by spending reductions elsewhere.

Mandatory spending not tied to Social Security, Medicare or Medicaid would be reduced under the plan, ultimately falling to slightly more than 2007 levels by 2014. It also calls for fixed annual spending caps on welfare programs.

The Senate GOP has yet to coalesce around a single plan as the House has with Ryan’s.

Senate Republican Leader Mitch McConnell’s (R-Ky.) office is not pushing any of the options; members should back whichever one they prefer.

“There are several Republican budget proposals to cut spending and each will attract support within the caucus,” McConnell spokesman Michael Brumas said. “The unanswered question is will Senate Democrats have their own plan or will they rely on the president’s budget that raises taxes and adds $9.5 trillion to the debt over 10 years?”

This post was updated at 3:37 p.m. It initially said incorrectly that the Toomey plan balanced the budget in 10 years.