April 27, 2015 / 9:56 PM / 4 years ago

Republicans reach deal for budget plan, target Obamacare

WASHINGTON (Reuters) - Republican budget negotiators on Monday reached a compromise deal for the first joint House-Senate budget in six years, one that seeks to boost military spending while calling for deep cuts to social programs to eliminate deficits in a decade.

U.S. House Speaker John Boehner (R-OH) speaks at a news conference on Capitol Hill in Washington March 19, 2015. REUTERS/YURI GRIPAS

But congressional aides said the deal, to be formally unveiled on Tuesday, will stop well short of directing appropriations committees to actually implement those cuts.

Instead, it will focus on the use of budget procedural tools on repealing or replacing President Barack Obama’s signature health reform legislation, the aides said.

Passing a budget will allow Republicans the opportunity to use budget “reconciliation” procedures to dismantle “Obamacare” with only a simple majority vote in the Senate, rather than a near-impossible 60 vote margin that would require some Democratic support.

As reported by Reuters last week, the compromise budget will exclude Representative Paul Ryan’s longstanding proposals to convert the Medicare health program for seniors to a system of subsidies for largely private health insurance.

The House of Representatives had included the Medicare reforms in its budget for a fifth straight year, calling for the changes to start in 2024. But the more cautious Senate did not include the proposals, adopting similar savings goals for the program as Obama proposed.

The Republican budget will nominally maintain statutory “sequester” spending caps for the military and domestic federal agencies for the 2016 fiscal year starting Oct. 1. But at the same time it skirts the caps by providing an additional $38 billion in military spending via a special off-budget account for war operations.

The final language is expected to drop Senate language that would have required such war funding to be offset with other savings.

While the budget will help guide the process of crafting spending bills for the next fiscal year, most of it is non-binding and represents a policy manifesto for Republicans who now control both chambers of Congress.

Once the budget is passed, the fiscal debate will shift to a separate effort to find other savings or revenue increases to ease the sequester spending constraints that were enacted in a 2011 budget law.

If Congress fails to lift the spending caps, military and domestic agency spending next year would stay flat at about $1 trillion, the same level as a decade ago. This also would make passage of spending bills more difficult, raising the risk of a government shutdown on Oct. 1.

Reporting by David Lawder; Editing by Kevin Drawbaugh and David Gregorio

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