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House GOP looks ready to shrink US role in Medicare. Is Obama?

House's plan for next round of budget-cutting would revamp the social contract between Medicare recipients and the government. Obama may say on Wednesday how far he'll go on Medicare reform.

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On the Senate floor Tuesday, majority leader Harry Reid spoke of the 2011 budget battle – expected to end with a vote on the compromise deal later this week – and the wrangling that lies ahead over the 2012 budget. "This budget battle has once again illustrated for the American people the fundamental differences between the two parties. In some cases, our priorities are poles apart," he said. "As we work toward finalizing this year's budget, as we start the conversation about next year's budget, and as we engage in the many other debates before us, Democrats will continue to insist on policies that reflect and respect our values."

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Republicans see this as a last chance to overhaul entitlement programs before the bulk of the huge baby-boomer generation starts receiving Medicare and Social Security benefits. They compare this fight with the Clinton-era battle to overhaul the welfare system, led by the last GOP House majority. The 1996 welfare reform law limited the duration of cash benefits and gave states more authority to encourage work and control spending. "Opponents of these reforms said that they would lead to large increases in poverty and despair. Instead, the exact opposite occurred," the 2012 GOP budget document notes.

"This is not a budget; this is a cause," said Representative Ryan at the rollout of his budget plan on April 5. "We owe it to the country to give them an honest debate."

For weeks, Ryan has been telling GOP colleagues that they have to "lead with their chin" on this budget, which would go into effect Oct. 1. Over time, facts will prevail, he says. The American public will become more familiar with the consequences of the nation's fiscal trajectory – and blame those who saw the problem but did not act.

When Ryan last year first proposed his Roadmap for America's Future – including cuts in Social Security benefits – it attracted, at best, 18 Republican supporters. But the 87-member GOP freshman class has swelled the ranks of conservatives eager to take on entitlements and spending. "Every political adviser, even my own, tells you to stay away from these issues," says freshman Rep. Tom Reed (R) of New York. "I said: We're not down here to win elections."

At the heart of the looming debate is a struggle over the size of government and its capacity to fund social programs – particularly Medicare and Medicaid. Using spending caps and triggers, the GOP budget proposal would bring government spending to below 20 percent of gross domestic product by 2015, and to below 15 percent by 2050. That compares with 23 percent in Mr. Obama's fiscal year 2012 budget.

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