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<DIV><FONT face=Calibri>The Democrats offer no alternative except to
complain of the 'extreme depth' of the proposed cuts. </FONT></DIV>
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target=_blank>TOM BARKLEY</A></H3>
<P
style="FONT-FAMILY: Georgia, 'Times New Roman', Times, serif; FONT-SIZE: 1.4em">WASHINGTON
--- House Republicans will propose slashing federal spending by more than $4
trillion over the next decade, by capping spending, overhauling entitlement
programs and revamping the tax system, the chairman of the Budget Committee said
Sunday.</P>
<P
style="FONT-FAMILY: Georgia, 'Times New Roman', Times, serif; FONT-SIZE: 1.4em"><STRONG>Rep. </STRONG><A
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target=_blank><STRONG>Paul Ryan</STRONG></A><STRONG> (R., Wis.) outlined on
"Fox News Sunday" key points of a much-anticipated 2012 budget proposal he is
expected to roll out Tuesday. Mr. Ryan indicated a significant share of the
savings would come from a plan to transform Medicare from a federal program that
guarantees benefits to senior citizens into a "premium support system" like the
healthcare retirement plans used by members of Congress and federal employees.
Under his plan, Mr. Ryan said, Medicare would offer a "list of plans out there
that compete against each other for your business, and seniors pick the plan of
their choosing. And then Medicare subsidizes that plan."</STRONG></P>
<P
style="FONT-FAMILY: Georgia, 'Times New Roman', Times, serif; FONT-SIZE: 1.4em">Mr.
Ryan said the proposal would be similar to one he proposed with Alice Rivlin, a
former Office of Management and Budget director during the Clinton
administration.</P>
<P
style="FONT-FAMILY: Georgia, 'Times New Roman', Times, serif; FONT-SIZE: 1.4em">Mr.
Ryan said speculation that he will propose turning Medicare into a voucher
program is inaccurate. But he confirmed that the proposal would overhaul
Medicaid into a system of block grants given to states, which would be free to
devise their own plans.</P>
<P
style="FONT-FAMILY: Georgia, 'Times New Roman', Times, serif; FONT-SIZE: 1.4em">"We
do increase and grow Medicare and Medicaid spending, but not at the pace they're
growing at because they're completely unsustainable," Mr. Ryan said.</P>
<P
style="FONT-FAMILY: Georgia, 'Times New Roman', Times, serif; FONT-SIZE: 1.4em">With
Democrats in charge of the Senate and the White House, Mr. Ryan's proposals have
little chance of becoming law. But they have a strong chance of defining the
Republican positions in the 2012 election debate over how to reduce the U.S.
debt, how big the federal government should be and what it should do.</P>
<P
style="FONT-FAMILY: Georgia, 'Times New Roman', Times, serif; FONT-SIZE: 1.4em">Mr.
Ryan declined to disclose Sunday exactly how much his fiscal 2012 proposal would
cut, saying Republicans are still fine-tuning their numbers over the weekend.
But reductions over the next decade would exceed the $4 trillion in cuts
proposed by the president's fiscal commission, he said.</P>
<P
style="FONT-FAMILY: Georgia, 'Times New Roman', Times, serif; FONT-SIZE: 1.4em"><STRONG>The
plan would cap overall spending to a percentage of gross domestic product to
"get government back to its historic size," below the current spending level of
about 25% of gross domestic product, Mr. Ryan said. He said a specific limit
hasn't been set yet.</STRONG></P>
<P
style="FONT-FAMILY: Georgia, 'Times New Roman', Times, serif; FONT-SIZE: 1.4em"><STRONG>Mr.
Ryan said his proposal would also call for statutory caps on discretionary
spending.</STRONG></P>
<P
style="FONT-FAMILY: Georgia, 'Times New Roman', Times, serif; FONT-SIZE: 1.4em"><STRONG>Mr.
Ryan said overhauling the tax code by cutting tax rates and "broadening the
base" will be central to his plan, but Mr. Ryan said he doesn't intend for a tax
system overhaul to raise overall revenues.</STRONG></P>
<P
style="FONT-FAMILY: Georgia, 'Times New Roman', Times, serif; FONT-SIZE: 1.4em">"Pro-growth
tax reform is a key ingredient to getting this economy working again," he
said.</P>
<P
style="FONT-FAMILY: Georgia, 'Times New Roman', Times, serif; FONT-SIZE: 1.4em">Mr.
Ryan expressed impatience with the debate over how much to cut from a 2011
spending bill that needs to pass Congress by next Friday to avoid a possible
shutdown of many federal government operations. "I do want to get off shaving
tens of billions of dollars, and get on to talking about trillions of dollars,"
Mr. Ryan said.</P>
<P
style="FONT-FAMILY: Georgia, 'Times New Roman', Times, serif; FONT-SIZE: 1.4em">Without
endorsing Mr. Ryan's specific approach, some Democrats used Sunday talk show
appearances to send a message that they too are prepared to tackle the growth of
the big entitlement programs, including Medicare, as well as reining in programs
that benefit farmers and curtailing corporate tax breaks.</P>
<P
style="FONT-FAMILY: Georgia, 'Times New Roman', Times, serif; FONT-SIZE: 1.4em"><STRONG>Sen.
Mark Warner (D., Va.), a member of a bipartisan group of Senators that's trying
to hammer out a long-term plan to cut the deficit, told CNN's State of the Union
Sunday "let's get out of this small ball. Let's go ahead and take on these tough
issues around spending, around entitlements."</STRONG></P>
<P
style="FONT-FAMILY: Georgia, 'Times New Roman', Times, serif; FONT-SIZE: 1.4em">But
Mr. Warner expressed reservations that Mr. Ryan's plan will rely heavily on cuts
to social programs, and won't address such issues as raising revenue by
curtailing corporate tax breaks.</P>
<P
style="FONT-FAMILY: Georgia, 'Times New Roman', Times, serif; FONT-SIZE: 1.4em">Sen.
John Cornyn (R., Texas), appearing with Mr. Warner, said "we need to look at
everything," but reiterated his position that the U.S. needs to amend the
Constitution to require a balanced federal budget, and said he won't vote to
raise the federal debt ceiling later this spring if the measure doesn't come
with significant steps to rein in spending.</P>
<P
style="FONT-FAMILY: Georgia, 'Times New Roman', Times, serif; FONT-SIZE: 1.4em">The
House Republican proposal comes as the two parties are locked in a battle over
passing a budget for the current fiscal year, with a potential government
shutdown looming Friday. When asked whether Republicans should accept a
compromise with Democrats that would cut $33 billion in the remaining six months
of the 2011 fiscal year, Mr. Ryan said he didn't want to undercut the
negotiating position of House Speaker <A
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target=_blank>John Boehner</A> (R., Ohio). But he said the fact that the
House has passed two budget bills proves that Republicans "don't want to shut
the government down."</P>
<P
style="FONT-FAMILY: Georgia, 'Times New Roman', Times, serif; FONT-SIZE: 1.4em">Mr.
Ryan blamed President Barack Obama for a lack of leadership on budget
matters.</P>
<P
style="FONT-FAMILY: Georgia, 'Times New Roman', Times, serif; FONT-SIZE: 1.4em">"I
find it kind of ironic that the week we're trying to engage the president, the
Democrats and the country with an honest debate about our budget, with real
solutions to fix this country's problems and prevent a debt crisis, the
president is launching his re-election campaign," he said.</P>
<P
style="FONT-FAMILY: Georgia, 'Times New Roman', Times, serif; FONT-SIZE: 1.4em">In
separate appearances Sunday, senior Democrats positioned the GOP's conservative
tea party wing as the obstacles to progress on both short and long term spending
issues, pursuing a strategy of portraying tea party activists as "extreme" on
spending issues.</P>
<P
style="FONT-FAMILY: Georgia, 'Times New Roman', Times, serif; FONT-SIZE: 1.4em">Asked
about the possibility of a government shutdown by the end of the coming week,
Senate Majority Leader Harry Reid (D., Nev.) told <A
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href="https://mail.sdccd.edu/exchweb/bin/redir.asp?URL=http://online.wsj.com/public/quotes/main.html?type=djn%26symbol=CBSA"
target=_blank>CBS</A>'s "Face the Nation" that what happens will be up to
Republican House leaders.</P>
<P
style="FONT-FAMILY: Georgia, 'Times New Roman', Times, serif; FONT-SIZE: 1.4em">"The
Republican leadership in the House has to make a decision whether to do the
right thing for the country, or the right thing for the tea party," Mr. Reid
said.</P>
<P
style="FONT-FAMILY: Georgia, 'Times New Roman', Times, serif; FONT-SIZE: 1.4em"><STRONG
style="FONT-STYLE: normal; FONT-WEIGHT: bold">Write to </STRONG>Tom Barkley
at <A
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href="mailto:tom.barkley@dowjones.com"
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