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U.S. Senate Republicans seek smaller budget cuts than House plan

WASHINGTON (Reuters) – U.S. Senate Republicans on Wednesday proposed less aggressive budget cuts than their House of Representative counterparts, forgoing a massive revamp of the Medicare health system for seniors and setting up a conflict over defense spending.

The plan from Republican Senate Budget Committee Chairman Mike Enzi proposes $5.1 trillion in spending cuts and interest savings over 10 years compared with $5.5 trillion in the House Republican budget released on Tuesday.

The Senate version would achieve a surplus a year later, in 2025, and assumes nearly $1 trillion in revenue from some expiring tax breaks.

Like the House budget, Enzi’s plan gets the bulk of its savings from repealing the Affordable Care Act, President Barack Obama’s signature healthcare reform law, and by cutting welfare programs and other federal benefits.

“This balanced budget delivers to hardworking taxpayers a more effective, efficient and accountable government,” said Enzi, an accountant from Wyoming.

The Senate version maintains statutory caps on the core defense budget and seeks to prohibit adding more money to an off-budget war funding account without the difficult-to-achieve 60 Senate votes. That puts it in direct conflict with the House plan to add around $36 billion to the fiscal 2016 war budget.

Instead, the Senate budget calls for a mechanism that would allow lawmakers to seek other savings so they can divert more money to both defense and domestic discretionary programs.

Many Republicans in both the House and Senate have said they cannot support a budget that fails to boost defense spending to at least the combined $612 billion proposed by Obama. Some have voiced concerns that a negotiating panel won’t deliver.

If the House and Senate cannot reach a budget compromise, Republicans would lose a rare opportunity to use a procedural tool to attach a repeal or replacement of Obamacare to the budget and pass it with a simple majority in the Senate, now controlled by Republicans 54-46.

Both chambers have included budget language for this purpose, and new healthcare legislation could gain momentum if the Supreme Court strikes a crippling blow to Obamacare’s insurance subsidy mechanisms this year.

Enzi’s plan also fails to adopt the controversial House prescription to turn Medicare into a system of subsidies for private insurance starting in 2024. But it wrings more from the program in earlier years, about $430 billion through 2025, by adopting the same savings goals that Obama has proposed.

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