WASHINGTON — When the U.S. House votes today on a Republican budget plan, Arkansas’ delegation plans to split along party lines, with the three GOP freshmen supporting the proposal that would cut roughly $6 trillion in federal spending while lowering the top income tax rates.
In the wake of Thursday’s passage of a budget for the remainder of fiscal 2011, the House will take up a long-term plan written by Republican Budget Committee Chairman Paul Ryan of Wisconsin that also restructures Medicare and Medicaid.
All three of the state’s Republican House members - the 1st District’s Rick Crawford, 2nd District’s Tim Griffin and 3rd District’s Steve Womack - said they will vote for the plan.
Crawford summarized the view of his Republican colleagues: “What we’re doing here is taking steps to preserve Medicare.”
The Ryan plan also would reduce the top individual and corporate tax rate from 35 percent to 25 percent. In addition, it calls for a wide range of cuts in government programs and services, including in areas such as transportation and agriculture that would affect Arkansas.
In terms of addressing the budget deficit, Womack said, “this is a great basis for putting America on a different fiscal path.”
But the state’s only Democratic House member - the 4th District’s Mike Ross - said the plan “to dismantle Medicare is a nonstarter for me.”
“The Republican budget ends Medicare as we know it today,” Ross said. “It privatizes Medicare and tries to save money by shifting the cost of coverage to our seniors.”
Ross supports the budget framework outlined earlier this month by the Blue Dog Coalition of self-described fiscally conservative Democrats, which calls for cutting the federal deficit by $4 trillion over the next 10 years.
Although the Republican budget resolution is expected to pass in the House, there is little chance that the Democrat-controlled Senate will consider it.
The Ryan plan would overhaul Medicare, the government health-care system for the disabled and those ages 65 and older, as well as Medicaid, the government health-care system for low-income individuals and families that’s funded with federal and state money.
Under the plan for Medicare, beginning in 2022, senior citizens and eligible participants would receive payments to help them purchase private health-insurance plans that would be administered by the federal government.
Under the plan for Medicaid, the federal government’s portion of the funding would be converted into block grants administered by the states beginning in 2013. A Congressional Budget Office analysis of the Ryan budget proposal concluded that it would result in “substantially smaller” payments to the states and “would probably require states to decrease payments.”
All three Arkansas Republicans disputed the characterization that Ryan’s plan would privatize Medicare, saying it would offer Medicare under the format currently used for providing health insurance to federal employees, including members of Congress.
For those over age 55, Griffin said, “we are keeping the promise to seniors that nothing changes.” But for those under that age, he said, “then something must change” or the system will go bankrupt and no one will have Medicare.
According to the most recent U.S. Census Bureau figures, 14.3 percent of Arkansas’ population in 2009 was 65 or older, compared with 12.9 percent of the U.S. population.
As for those who are 55 or younger - including all four House members - Womack said the plan offers a “fair and reasonable” way to deal with budget realities. “My generation is probably going to have to work a little longer, work a little harder.”
The Congressional Budget Office analysis concluded that, under the Ryan plan, most elderly people who would be entitled to premium-support payments would pay more for their health care than they would pay under the current Medicare system. By 2030, the analysis said, a participant would be paying 68 percent of the cost of health care compared with 25 percent under the current system.
Another key issue addressed in the Ryan budget proposal is agriculture spending. He has called for $30 billion in cuts over the next decade. Although he took aim at two programs - direct payments to farmers and the federal crop insurance program - he would leave the final decision on what to cut to the House Agriculture Committee, which will soon begin drafting the next farm bill.
Crawford, a member of that committee, said he would workto maintain direct payments. It’s an issue farmers have been anticipating, so they’ve been visiting his office “in great numbers” this year.
Because the decisions will be made by the Agriculture Committee, Crawford said, “there’s a very good chance we can preserve the direct payment if we find other places in other parts of the farm bill to implement those cuts.”
Arkansas ranks eighth in terms of all federal farm subsidies, receiving $9.6 billion in subsidies from 1995-2009, according to U.S. Agriculture Department statistics compiled by the Environmental Working Group, which advocates for reducing agriculture subsidies.
During that same time, direct farm payments to Arkansas totaled $1.8 billion.
Crawford’s eastern Arkansas district - which includes the largest rice-producing area in the nation - accounted for 63 percent of Arkansas’ total subsidies.
“Farmers understand that everybody has to chin the bar,” he said. “My concern is that we don’t ask farmers to carry more of the load than we ask anybody else. To the extent that this is fair, OK, weunderstand that we have to cut.”
The same principle may apply when it comes to transportation funding.
Decisions on what to spend and what to cut will have to be weighed against “the return on investment that this country needs to seize” when it comes to improving infrastructure, Womack said.
Despite the difficult budgetary decisions that lie ahead, all four Arkansas House members agreed that the priority is reducing the debt.
“We’ve got to keep our eye on the ball here, which is - if we fail to address this national debt, we’ll see job loss and economic problems like we have never seen before,” Griffin said.
Front Section, Pages 1 on 04/15/2011