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Focus is Squarely on Budget Crisis… in DC

For the past three months, attention in Sacramento has been affixed on the state’s $26.6 billion budget shortfall, the recently passed cuts that will shrink the deficit in half, Republican’s unwillingness to allow voters to decide on tax extensions, and the Governor’s deliberations on what to do next.

Recently, however, eyes have turned to Washington D.C. as the 2011-12 federal budget has taken center stage.

Over the past several months, instead of passing a yearlong budget bill, Congress has settled for several short-term, stop-gap budget bills — most of them including billions in cuts to health and human service programs. Today, President Obama rejected another short-term plan, a House Republican offer to cut $12 billion in exchange for keeping the government open for 7 more days. He has declared, in essence, it is time for Congress to decide upon a long-term budget.

Simultaneously, Congressman Paul Ryan, chair the House Budget Committee, earlier today reveled a Republican Budget Resolution which reads less like a fiscal road map and more like a political manifesto that envisions an alternative structure to the federal government. Among others, the House Republican plan calls for:

  • rescinding the ACA’s Medicaid expansion,
  • eliminating the entitlement in Medicaid, replacing it with a block grant,
  • radically transforming Medicare from a health insurer for seniors to a system through which members would be subsidized to pick from a list of private insurance plans,
  • cutting the top tax rate for both individuals and corporations from 35% to 25%, and
  • reducing the number of federal income tax brackets.

Yesterday, Democratic governors of 16 states and the Virgin Islands sent this letter opposing the Medicaid block grant proposal, arguing that House Republican plan would “severely undercut our ability to provide health care to our residents and adequately pay providers.”

No Clear Resolution in Sight

Much like the budget situation in Sacramento, it is unclear how D.C.’s budget quagmire will be resolved. Senate Democrats have passed a budget plan that includes $33 billion in cuts, but House Republicans have ignored that option, instead supporting Representative Ryan’s more radical proposal.

With the existing stop-gap budget expiring on Friday, April 8th, many in D.C. are gearing up for the first federal government shutdown since 1995-96.
Will it happen? With the two sides still far apart and the deadline just three days away, it’s looking more and more likely with every passing hour.