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ANALYSIS-Ryan's budget plan could help Obama in 2012

05 Apr 2011 20:30

Source: reuters // Reuters

* Seniors likely to be upset

* Cuts in healthcare programs unpopular

By Steve Holland

WASHINGTON, April 5 (Reuters) - U.S. Republican Congressman Paul Ryan may have handed President Barack Obama a political gift with a 2012 budget plan that would result in cuts to popular benefits for the elderly and the poor.

Ryan's budget plan, announced on Tuesday with great fanfare, would provide $6 trillion in savings over the next decade, but part of the path to get there would include cuts to the government-run Medicare and Medicaid programs. [ID:nN05190461]

Republicans who control the U.S. House of Representatives say the cuts are needed to reduce the federal deficit and prevent the U.S. debt load from spiraling out of control.

But senior citizens, who traditionally turn out in large numbers in U.S. elections, are expected to resist any proposals to reduce the healthcare benefits they receive through these programs.

"The House Republican budget proposal should be accompanied by a 'Grandma Beware!' sign," said Ron Pollack, executive director of Families USA.

Seniors who abandoned Obama's Democrats in the 2010 congressional elections may be inclined to give him a second chance when he runs for re-election in 2012, and many of them live in Florida, typically a must-win state for Republicans in presidential elections.

"What we do know is on the surface it ought to be a gift for Democrats," said Norman Ornstein, a political analyst at the American Enterprise Institute. "We know that polls tell us first of all that cuts in Medicare and Medicaid are extremely unpopular."

Many Republicans hailed Ryan as a courageous leader for offering his plan, while not embracing the details.

Former Massachusetts Governor Mitt Romney, who is planning a run for the Republican presidential nomination in 2012, applauded Ryan for "creative and bold thinking" and said he set the right tone for "finally getting spending and entitlement programs under control."

Tim Pawlenty, the former Minnesota governor who is also expected to run for the Republican nomination, said Ryan was "someone offering real leadership in Washington." The more immediate issue, he added, is dealing with efforts to raise the U.S. debt limit beyond $14 trillion in coming weeks.

OBAMA THE MEDIATOR?

Obama has attempted to position himself as something of a mediator between Democrats and Republicans squabbling over the federal budget, an effort that may be aimed at rebuilding a relationship with independent voters who believed he had gone too far to the left in his first two years.

White House spokesman Jay Carney said Obama agreed with Ryan's overall goal of cutting the deficit but believed it wrongly protected tax cuts for wealthier Americans.

"He believes that the plan that Congressman Ryan put forward today fails the test of balance that is essential to make sure that there is shared sacrifice in the decisions we make," Carney said.

The issue allows Republicans to seize on Obama's inability so far to push ahead with any plan that would take on the politically sacred programs that are most responsible for driving up the U.S. debt and deficits.

And it gives Republicans a new issue to discuss since a drop in the U.S. unemployment rate could lessen the economy's importance in the 2012 campaign. The jobless rate fell to a two-year low of 8.8 percent in March, the Labor Department said last week.

"If you're a Democrat or Obama you have to worry about what this does to your image, as far as being a leader willing to tackle the big issues," said Ari Fleischer, who was a press secretary for Republican President George W. Bush. "There is a risk in inaction just as much as there is a risk to action."

While both sides profess a desire to confront the issue, the longer it takes to get going, the less likely it is to be resolved with the 2012 election on the horizon.

Republican strategist Scott Reed said Ryan had successfully taken ideas presented by Obama's own fiscal commission to help him form his plan.

"The fact that Paul Ryan has now redefined the fiscal debate in this country shows Obama has failed to lead," he said.

(Editing by Paul Simao)