Pennsylvania’s Pat Toomey cosponsors Senate plan to end deficits

Posted: May 10, 2011

WASHINGTON - Pennsylvania's Pat Toomey and a group of fellow conservative Republican senators proposed a plan Tuesday that would balance the federal budget within nine years while avoiding for now radical changes to Medicare and Social Security that could be political poison.

The plan was announced as congressional leaders prepared to meet with White House negotiators on raising the ceiling on the government's ability to borrow. GOP officials, including House Speaker John A. Boehner of Ohio, are insisting on deep permanent cuts in future spending in exchange for a vote to increase the debt limit, which the administration says will be needed by sometime this summer.

Toomey, who has emerged as a GOP leader on fiscal policy in his first term, said he hoped to show it was possible to balance the budget without raising taxes or making apocalyptic cuts.

"Deficits are not inevitable; they can be stopped if we in Congress have the will," Toomey said.

In the proposal, federal spending would be lowered to 18.5 percent of gross domestic product by 2021, down from an estimated 25 percent today. The national debt, now projected to reach 69 percent of the economy's total output by the end of this year, would be reduced to 52 percent of GDP by 2021.

Toomey's proposal differs from the House-passed GOP budget plan by Rep. Paul Ryan of Wisconsin, which relied on converting the Medicare program of federally funded health care for the elderly into a system that would give vouchers to subscribers to buy private insurance.

That proposal drew intense fire from Democrats and constituents during the recent congressional recess, and GOP leaders have backed away from it.

The conservatives' proposal would turn the Medicaid program of health care for the poor into a block-grant program for states, just as the Ryan budget would.

Toomey and his cosponsors said they recognized that broader changes in Medicare and Social Security were needed, and said they would vote for the Ryan plan if it came to a vote on the Senate floor - an unlikely prospect in the Democratic-controlled chamber.

Joining Toomey at a news conference were Sen. Jim DeMint (R., S.C.) and freshmen Sens. Marco Rubio of Florida, Mike Lee of Utah, and Ron Johnson of Wisconsin, all Republicans elected last year with strong tea party support. Four other Senate Republicans are also cosponsors but were not at the reveal.

Rubio denied that Republicans were stepping away from Ryan's tough love for Medicare because of the political risks. Without changes, Medicare will have to cut benefits over the next five to 12 years, he said.

"I want to save Medicare," Rubio said. Besides, he contended, the only people who favor cutting Medicare benefits are the Democrats who voted for President Obama's health-care law, which relies on $500 billion in savings from lower payments to health-care providers.

Toomey and other Republicans attacked Democratic candidates nationally in ads for those savings, calling them cuts in coverage. The plan proposed Tuesday includes some of the same projected Medicare savings.

Still, the plan as drafted would spend $6.49 trillion over 10 years on Medicare, more than the $6.46 trillion the president proposes.

The plan also would reduce nondefense discretionary spending to 2006 levels, or $435 billion, then freeze it at that level for six years. After that, nondefense discretionary spending would be tied to increases in the consumer price index.

It says that growth in defense spending would be slowed in accord with recent recommendations by departing Defense Secretary Robert M. Gates, and the projected savings assume the United States is out of Iraq and Afghanistan entirely by 2020.

There also would be annual caps on the growth of mandatory welfare spending.

Toomey and his partners also envision reducing the marginal tax rate to a maximum of 25 percent and cutting the corporate tax rate by 10 percentage points, while eliminating unspecified loopholes.

There were few details in the plan. Toomey said it was still being tweaked and turned into a formal legislative proposal.

The senators' plan joins a growing welter of proposals and budget-writing efforts, including the hush-hush work of the bipartisan "Gang of Six" lawmakers who want to follow the recommendations of Obama's deficit commission.

"You need a scorecard to tell the players," said Sen. Ron Wyden (D., Ore.), a member of the Senate Budget Committee. He said he was unfamiliar with the Toomey proposal but agreed with the deficit commission that plans without increases in revenue were unrealistic.

"You cannot get where this country needs to go just by cutting," Wyden said.


Contact politics writer Thomas Fitzgerald at 215-854-2718 or tfitzgerald@phillynews.com.

Read his blog, The Big Tent,

at www.philly.com/BigTent

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