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Senate candidates trade jabs on budget

Merkley: Foe backs 'draconian' cuts; Wehby: Balance requirement 'sensible'


Oregon’s major-party candidates for U.S. senator are trading jabs over how the other stands on federal budget questions.

Democratic incumbent Jeff Merkley says Republican rival Monica Wehby supports a budget plan that is even more austere than one put forth by House Republicans but rejected by the Senate in 2011.

The newest plan is backed by the Koch brothers, who are behind a campaign affiliate that has indicated it will spend millions against Merkley’s second-term bid. Merkley’s campaign now says that Freedom Partners, the independent expenditure group backed by the Kochs, has increased its planned advertising buy against Merkley from $3.1 million to $3.6 million. That’s far more than Wehby has raised for her campaign.

One expert says both plans would force cuts of 25 percent or more in entitlement programs, such as Social Security and Medicare, and federal discretionary spending on domestic and military programs.

Unless Congress is willing to slash such spending — it was unwilling to do so a couple of years ago — the expert says the latest plan is unrealistic.

Merkley also voted that year against a constitutional requirement for a balanced budget, which Wehby says she would have voted for. Merkley says he would vote no again, as did the Republican senator he once worked for.

GOP budget plans

On May 25, 2011, Merkley voted no on a House Republican budget that would have cut $5.8 trillion in spending and $4.2 trillion in taxes over 10 years. The Senate rejected that budget, 57-43, with five Republicans joining the majority Democrats.

On July 22, 2011, Merkley again voted no on a House Republican budget that would have pared federal spending from 22.5 percent to 19.9 percent of the gross domestic product over 10 years. Social Security, Medicare and Medicaid would have been exempted from the cuts. The Senate also rejected that budget, 51-46.

The latest plan would set the federal budget at 18 percent of gross domestic product, which an expert says “is not a realistic number.”

“Federal spending has rarely dipped below that number in recent years,” says Harry Stein, associate director of fiscal progress at the Center for American Progress Action Fund, a liberal-leaning group based in Washington, D.C.

In his group’s study of the 2011 budget that House Republicans proposed, he says, “if you did an across-the-board cut to implement it, it would require a 25 percent cut to everything,” including Social Security and Medicare.

If there were exemptions for those programs, he adds, “everything else would have to get more massive cuts.”

Stein said a Social Security exemption would have forced cuts of 33 percent in other programs.

18 percent

The budget plan proposing an 18-percent cap would be even more austere.

“This is even more draconian than the Paul Ryan budget,” says Andrew Zucker, Merkley’s deputy campaign manager. He referred to Ryan, the Wisconsin representative who led the House Budget Committee in 2011 and was the GOP nominee for vice president in 2012.

The 18-percent figure was chosen apparently because that is the average annual federal revenues for about a half century. But Stein says that underfunds actual spending, because the average covers years before Medicare and Medicaid were instituted in the 1960s.

Medicare is the federal health insurance program for people 65 and older, and some people with disabilities. Ryan’s budget had proposed to convert it into a voucher program enabling seniors to obtain private coverage, but that drew sharp criticism.

Medicaid is the joint federal and state program of health insurance for low-income people. In Oregon, it’s known as the Oregon Health Plan, although the greatest share of Medicaid actually goes to nursing-home care for low-income older people.

What’s happened

Later in 2011, Congress approved automatic across-the-board cuts, known as the “sequester,” if a panel failed to recommend more selective spending cuts. Some cuts took effect in 2012, after that panel failed to agree on a report, but House Republicans balked at passing appropriations bills that conformed to the automatic cuts.

“They would not support cuts when they got specific,” Stein says. “Cutting the budget to 18 percent of gross domestic product would be much more extreme. There’s no willingness to do anything on that scale without really taking the ax to Social Security, Medicare and Medicaid.”

Near the end of 2013, however, Congress approved a two-year budget deal reached by Ryan and Washington Sen. Patty Murray, who led the Senate Budget Committee.

Merkley and Oregon Sen. Ron Wyden were in the majority on the Senate’s 64-36 vote of approval for the deal, which the Koch brothers opposed but nine Republicans supported on Dec. 18.

The Congressional Budget Office, in a report issued July 15, says an improving economy is helping bring down annual federal budget deficits. In 2009, the deficit was 10 percent of the gross domestic product, but it dropped to 4 percent in 2013, 3 percent this year, and a projected 2 percent for next year.

However, the office advises that annual deficits are likely to grow again in a few years as interest rates rise from now-historic lows, and spending on Social Security and health care programs increases as the population ages.

Another difference

Meanwhile, on Dec. 14, 2011, Merkley and Wyden voted against Senate Joint Resolution 10, which proposed a constitutional amendment for a requirement for a balanced federal budget. The Senate rejected it, 53-47, along party lines; a constitutional amendment requires a two-thirds majority for referral.

“The senator’s refusal to take this sensible approach to reduce the debt was a shortsighted decision that ensured future generations will shoulder the burden of our unprecedented national debt,” Wehby is quoted July 17 in The Oregonian, which is running a series on seven Senate votes each has chosen over Merkley’s six years.

But Merkley says he would vote the same way, given that such a budget would force deep spending cuts affecting older people and families without touching tax breaks for businesses and high-income households.

Merkley once was an intern for U.S. Sen. Mark Hatfield, the lone Republican to oppose a similar proposal in 1995, when it failed by one vote to reach the 67 required to pass the Senate.

Merkley and Wehby already have traded jabs over Wehby’s support of tax cuts even deeper than proposed by Mitt Romney in his failed 2012 presidential bid.

Wehby’s former campaign manager, Charlie Pearce, was a top aide to Romney's campaigns in 2008 and 2012. Pearce is now managing Dennis Richardson’s bid for governor.

peterwong@PortlandTribune.com

(503) 385-4899

twitter.com/capitolwong