WASHINGTON – Republicans and Democrats have locked horns over the fiscal year 2012 budget and the federal deficit, with the fate of entitlement programs hanging in the balance.
Two-thirds of the federal budget is spent on Medicare, Medicaid, Social Security and national security, making these programs the lynchpin for budget battles.
In April, House Republicans passed a fiscal year 2012 bill sponsored by House Budget Chairman Paul Ryan (R-Wis.) that would end direct Medicare payment to healthcare providers, instead providing health insurance vouchers to seniors. The vouchers would amount to about $15,000 annually, calling for seniors to pay more out of their own pockets.
The Senate has yet to vote on the Ryan proposal, which Republicans are calling "the Roadmap to Prosperity."
President Barack Obama's fiscal year 2012 plan, also introduced in April, would make budget cuts "using a scalpel, not a machete," according to the president.
Obama said Ryan's plan "would end Medicare as we know it."
Obama's plan to reduce Medicare spending includes steps to cut fraud and abuse and a push for lower prescription drug prices. For Medicaid reductions, Obama said the federal government should work with governors "to demand more efficiency and accountability" from the program.
Obama said the Affordable Care Act should cut Medicare spending by $500 billion by 2023 and cut an additional $1 trillion in the following decade through various health reform provisions. He also called for tax increases for America's most wealthy. Republicans are opposed to tax increases of any kind.
A May 11 report from the Kaiser Family Foundation increased the controversy, claiming Ryan's plan for Medicaid could force as many as 44 million people out of the program over the next 10 years.
The budget battle comes as the nation reached its debt ceiling on May 16, pulling that into the partisan fireworks as well. Treasury Secretary Tim Geithner has found stopgap measures to handle the federal debt through August 2. After that, the nation will no longer be able to meet its obligations.
"As I have said before, Congress must meet its responsibility to protect the nation's full faith and credit by increasing the debt limit," Geithner said at a May 17 speech in New York City. "It simply is not an option for Congress to evade the basic responsibility to protect America's creditworthiness."