Senate Republicans criticise Biden budget amid banking, market strains
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[March 16, 2023]
By David Morgan
WASHINGTON (Reuters) - U.S. Senate Republicans accused Democratic
President Joe Biden of misleading Americans about his $6.8 trillion
budget plan to reduce deficits and shore up Medicare in a debate that
reinforced an increasingly risky standoff over spending and the
country's debt ceiling.
At a Senate Budget Committee hearing on Wednesday with White House
budget director Shalanda Young, Republicans dismissed the budget plan's
aim of reducing deficits by nearly $3 trillion over the next decade and
instead claimed the proposal would kill jobs, grow the federal deficit
and add to the debt.
Republicans, who control the House of Representatives, have yet to
produce their own budget or to offer concrete deficit-reduction plans,
making Biden's proposal an early step in negotiations over fiscal 2024
spending. Republicans have refused to raise the nation's $31.4 trillion
debt ceiling unless Democrats agree to sharp spending cuts.
"We have to use this debt ceiling issue to pry the nation's maxed-out
credit card from Joe Biden's hands," Republican Senator Roger Marshall
said.
Democrats also showed no sign of budging from their own refusal to
negotiate over the borrowing limit.
"We need to drop the politics, address the debt ceiling without any
strings attached, and soon," said Democratic Senator Patty Murray, who
chairs the Senate Appropriations Committee.
Failure to address the debt ceiling could lead to an unprecedented
default by the federal government that would rattle the global economy
and financial markets, which have been volatile following the collapse
of Silicon Valley Bank and Signature Bank.
New financial strains at Credit Suisse threatened to raise the stakes
even further.
Young insisted that Biden's budget would reduce deficits without
imposing a penalty on working families, through nearly $5 trillion in
tax increases on the wealthy and large corporations to help offset
spending and shore up Medicare.
But Republican Senator Mitt Romney suggested that the president's
deficit reduction forecast was based on federal spending for the
COVID-19 pandemic from previous budgets.
"To say somehow that he's been cutting the deficit is just not
realistic," Mitt Romney told Young.
Added Senator Chuck Grassley, the panel's top Republican: "It seems to
me, the administration misleads the American people on real deficit
reduction."
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Office of Management and Budget (OMB)
Director Shalanda Young testifies before a Senate Budget Committee
hearing on President Biden's proposed budget request for fiscal year
2024, on Capitol Hill in Washington, U.S., March 15, 2023.
REUTERS/Jonathan Ernst
ven as they disagree on spending, leaders of both parties say they
will not cut Social Security and Medicare, which currently account
for about a third of the federal budget. Not touching those, or
failing to cut defense spending, leaves little chance of addressing
the government's budget deficit.
The only heated exchange in the proceedings occurred when Romney
accused Young of being "dishonest" for saying that Republican
lawmakers have proposed benefit cuts for Social Security and
Medicare.
Young said the White House looked forward to seeing a Republican
budget that suggests the programs are off the table. "Have they
changed their position? Maybe," she said.
Republicans who control the House of Representatives are working to
release their own budget in coming weeks, which lawmakers have said
could contain up to $150 billion in cuts for domestic non-defense
spending.
Republicans are determined to avoid tax hikes and to preserve tax
cuts for the wealthy implemented under former President Donald
Trump.
The hardline House Freedom Caucus last week issuing a
counterproposal that includes a near freeze on discretionary
spending and an end to multiple Biden programs.
Young warned that the Republican focus on discretionary non-defense
spending would mean drastic cuts for child care, low-income home
heating and cooling assistance, border operations and foreign
relations. "The list goes on and on," she said.
A presentation by the nonpartisan Congressional Budget Office last
week laid out options for addressing the deficit and projected that
spending cuts would have substantially less effect on the deficit
than increased tax collections.
(Reporting by David Morgan in Washington; Editing by Scott Malone,
Matthew Lewis and Marguerita Choy)
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