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Congress' Budget Hunt Hits a Snag

Senate rejects GOP's Medicare proposal but can't decide on any alternatives

Senator Harry Reid and Speaker John Boehner speak about Medicare.

House Majority Leader John Boehner (R) and Senate Majority Leader Harry Reid (D) lead their parties in a face off on Medicare. — — Getty Images

Forced to choose a budget blueprint for next year, the Senate has voted for none of the above.

A controversial Republican proposal that would remake the Medicare program failed, along with the original budget plan of President Obama and two other Republican proposals.

See also: Lawmakers wrestle with huge budget deficits.

"I can't see Republicans and Democrats agreeing on a budget after this exercise," says Brian Darling, a Senate expert at the Heritage Foundation, a conservative-leaning think tank.

That means that despite a projected $1.4 trillion budget deficit, spending won't be reined in, even with a public clamor for the nation to get its red ink under control. The budget plan is a blueprint that sets limits for federal spending.

The plan that Republican leaders have pushed and that the House has passed would cut costs in Medicare by giving seniors a set amount of aid to buy insurance from the private market. It would affect only those who are 54 and younger.

Republicans, including the idea's sponsor, Rep. Paul Ryan of Wisconsin, have said it's crucial for saving the program, which is out of financial balance in the long term. Democrats charge that it would end the Medicare program. They have made headway in public opinion polls with a targeted campaign against the Ryan proposal.

"The Republicans are willing to take on entitlement reform," Darling says of the Senate vote. Five Republicans voted against the rest of the party on the measure, though Sen. Rand Paul of Kentucky did so not because of opposition to the Medicare changes but because he wanted more aggressive budget cutting.

"Republicans are right to stress Medicare is the big enchilada when it comes to an unstable fiscal future," says Isabel Sawhill, a budget expert at the Brookings Institution, a liberal-leaning think tank. "But they are wrong to say the public is ready to embrace radical change."

The votes were cast in the shadow of a special election in upstate New York where Democrat Kathy Hochul won a House seat this week after excoriating the GOP Medicare overhaul proposal. That vote "is handwriting on the wall: Republicans beware of targeting Medicare for major changes," Sawhill says.

Next: Will the Medicare overhaul pass this year? >>

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