House averts government shutdown, backs Ryan budget

By David Lawder

WASHINGTON (Reuters) - House of Representatives Republicans on Thursday approved a stopgap spending bill to avoid a government shutdown, in a further easing of the partisan budget wars that have consumed Washington for months.

The Republican-controlled House voted 318-109 to approve legislation that keeps government agencies and programs funded through the end of the fiscal year on September 30, sending the measure to President Barack Obama to be signed into law.

Current spending authority was to expire on March 27, but Republicans chose not to use the threat of federal agencies running out of money and shutting down as leverage to demand deep spending cuts.

Instead, they want to wage a campaign for deficit reduction centered on proposals from House Budget Committee Chairman Paul Ryan of Wisconsin. Shortly before approving the spending bill, the House backed a budget blueprint offered by Ryan to eliminate U.S. deficits within 10 years through deep cuts in healthcare and other social programs.

The funding bill for the rest of this fiscal year, which the Democratic-led Senate approved on Wednesday, keeps in place $85 billion in automatic spending cuts, known as the "sequester."

But it takes some of the sting out of those cuts by allowing the military and several domestic agencies to shift some money within their reduced budgets to higher priority activities.

Passage of the funding measure gives Congress breathing room for a few months to argue over which party has a more viable budget vision before they face another showdown this summer over raising the federal debt limit.

Ryan's budget, marked by deep spending cuts to social programs and repeal of President Barack Obama's health care reforms, defines Republicans' positions in the rest of this year's fiscal battles and in congressional elections in 2014.

The House voted 221-207, largely along party lines, to approve Ryan's non-binding budget resolution, with all Democrats and 10 Republican conservatives opposing it.

The Ryan plan aims to drastically shrink deficits over the next decade and reach a small surplus by 2023.

Like previous budgets that made him known as a fiscal hawk and helped him become the Republican vice presidential candidate last year, it proposes major changes to the Medicare health care program for the elderly.

This popular but increasingly expensive program would be converted to a voucher-like system of subsidies for seniors to buy private health insurance or coverage through the traditional Medicare program.

NEW BATTLE LINES

Ryan said his plan draws a deep contrast with Senate Democrats, who are expected to pass their first budget resolution in nearly four years this week.

"It reveals each side's priorities. It clarifies the divide that exists between us," Ryan said. "We want to balance the budget. They don't. We want to restrain spending, they want to spend more money."

The Democrats' budget plan envisions deficits in the $400-600 billion range through the next decade, but maintains that these will average 2.4 percent of economic output, a level many economists view as sustainable.

The Democrats' budget seeks $1 trillion in new tax revenues by eliminating tax breaks for the wealthy and proposes $100 billion in new spending on infrastructure and job training. It offers up only modest, undefined cuts to healthcare spending while keeping social safety net programs largely unchanged.

(Reporting by David Lawder; Editing by Vicki Allen)

Source: http://news.yahoo.com/house-approves-ryan-budget-defining-republican-fiscal-vision-145314362--business.html

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