–House GOP Proposes $300 Billion in Cuts for FY 2013
–Senate Seeks To Pass Reauthorization of Export-Import Bank

By John Shaw

WASHINGTON (MNI) – The House is likely to approve Thursday a
Republican plan to replace about $100 billion in across-the-board
spending cuts in the 2013 fiscal year with a package of more than $300
billion in 10-year spending savings.

The plan likely will pass on a party line vote. It was crafted by
House Budget Committee Chairman Paul Ryan and was approved by the Budget
Committee Monday on a 21 to 9 vote.

Ryan and Rep. Chris Van Hollen, the ranking Democrat on the House
Budget panel, agree Congress should pass legislation to prevent
across-the board spending cuts from being implemented next year.

But they disagree sharply over how this should be handled.

Ryan’s plan reduces spending on food stamps, curtails medical
malpractice claims, repeals part of the Dodd-Frank law, requires federal
employees to contribute more for their pensions, cuts the child tax
credit program, and repeals the Social Services block grant program.

Ryan said the package includes sensible reforms, including
important savings from entitlement programs.

“These savings will replace the arbitrary sequester cuts and lay
the groundwork for further cuts to avert the spending-driven economic
crisis before us,” Ryan said.

But Van Hollen said the across-the-board spending cuts should be
replaced by a “balanced approach to deficit reduction.”

He said a blend of spending savings and revenue hikes should be
used to offset the sequester. Van Hollen’s alternative would curtail
some agriculture subsidies, close tax benefits for oil and gas firms,
and increases taxes on millionaires.

The action in the House this week is expected to be the first step
in a prolonged battle to replace across-the-board spending cuts with
alternative savings.

Over nine years, about $1.2 trillion in across-the-board cuts are
mandated by the sequestration which is due to take effect because of the
failure of Congress’s Super Committee last fall. The intention was to
force a bipartisan deficit reduction package, but both sides now want to
overturn the drastic cuts.

Senate Majority Leader Harry Reid said Wednesday the House vote is
another attempt by House Republicans to renounce the debt ceiling accord
of last summer.

“The House is doing everything they can to walk away from the
agreement that we made,” he said.

“I don’t like the sequester. It was a hard pill to swallow. But it
was the right thing to do. If we are ever going to reduce these
staggering deficits, we’re going to have to make some hard decisions,”
Reid said. “So that’s what this was all about. That was the point. It’s
hard to do, so therefore we have to do it.”

Reid later called the sequestration process “difficult but it’s
balanced.”

Serious negotiations regarding these fiscal matters are months away
and the issue is unlikely to be resolved before the November elections.

On another matter, the Senate is likely to approve a bill Thursday
to reauthorize the Export-Import Bank. It was approved by the House
Wednesday on a 330 to 93 vote.

** MNI Washington Bureau: (202) 371-2121 **

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