WASHINGTON – The House gave final approval Thursday to legislation to avert a federal shutdown and keep the government funded through September, and passed a Republican budget blueprint that enshrined the party's vision of a balanced budget that would substantially shrink government, privatize Medicare and rewrite the tax code to make it simpler and flatter.
With a final flurry, Republican leaders sent the House home before noon Thursday for a two-week recess, confident that they had outmaneuvered President Obama and the Democrats in the running fiscal fight from the last redoubt of Republican control in Washington.
The funding plan for the rest of the year, which passed by a vote of 318 to 109, locks in across-the-board spending cuts that will usher in the most austere government outlook in decades. It underfunds key elements of the president's health care law, as the administration builds up health insurance purchasing exchanges. And it makes permanent four formerly temporary gun-rights provisions just as Senate Democrats prepare a final push on gun control legislation.
Four months after Mr. Obama was re-elected, the separate House budget plan – the third drafted by Representative Paul D. Ryan of Wisconsin, the House Budget Committee chairman and former vice-presidential nominee – reaffirms the blueprint for governance the president ran against. It would convert Medicare into a system of private insurance plans financed by federal vouchers and roll back many of Mr. Obama's signature legislative accomplishments, repealing the health care overhaul of 2009, eliminating the subsidized insurance exchanges and Medicaid expansion that make up the core of the law. It would undo the Wall Street regulatory law passed in the wake of the 2008 financial crisis bank and cut spending by $4.6 trillion through 2023, the year the plan purports to bring the budget into balance. It passed 221 to 207, with all Democrats and 10 Republicans voting no.
That balance, however, rests on some significant assumptions. To make spending align with revenues, the plan assumes the current level of taxes will continue, even as it repeals the tax increases in the president's health care law and eliminates the alternative minimum tax. The plan directs the tax writers on the House Ways and Means Committee to overhaul the tax code, leaving only two tax brackets, 25 percent and 10 percent, as well as a 25 percent corporate tax rate, down from 35 percent.
But the budget does not detail the tax deductions, credits and loopholes that would need to be eliminated or cut back to finance such deep tax-rate reductions, effectively leaving tax writers a $6 trillion hole to fill – one that Democrats say is mathematically impossible without raising the tax burden of the middle class.
Still, as a political document, the budget makes an uncompromising statement in the wake of the Republicans' electoral losses. Unlike his first two budgets, this one ends with a small federal surplus – a crucial talking point for Republicans, especially because the Senate Democratic version does not come close to balance.
"The president has an opportunity during this critical debate to come forward and make this part of his legacy," Speaker John A. Boehner of Ohio declared of that final year with a balanced budget. "We can't continue to spend money we don't have. It's as simple as that."
Mr. Ryan said his budget and the Democratic version likely to pass the Senate by Saturday "clarifies the divide between us."
"We want to balance the budget. They don't," he said Thursday. "We want to restrain spending. They want to spend more."
"We offer modernization, reform, growth and opportunity," he continued. "They want to cling to the status quo, more taxing, more spending, more borrowing."
Representative Chris Van Hollen of Maryland, the ranking Democrat on the Budget Committee, called the document "an uncompromising, ideological approach to our budget issues."
"We've just been through a major national campaign where both candidates, Mitt Romney and Barack Obama, agreed on one thing: the people of this country faced a fundamental choice in the direction we were going to take," Mr. Van Hollen said. "The American people voted, and they resoundingly rejected the direction this budget has taken for the third year in a row."
Still, for the first time in three years, passage of the spending bill and House budget could begin an orderly process toward a bipartisan deficit reduction deal. With a week to spare, Congress had averted a government shutdown, a small victory after nearly three years lurching from budget deadline to budget deadline.
Once the Senate blueprint is passed, lawmakers will return from their spring recess in April and try to resolve the vastly different visions of taxing and spending that the House and Senate will have enacted.
If they can, the two chambers appropriations and tax-writing committees will go to work on the legislation needed to turn those broad blueprints into legislative reality. If they can't, the House and Senate may slide back toward more budget brinkmanship, first in July when Congress must raise the government's statutory borrowing limit, then in September, when lawmakers must come together on a spending plan for the next fiscal year.
Correction: March 21, 2013, Thursday
This article has been revised to reflect the following correction: An earlier version of this article misidentified the current top corporate tax rate. It is 35 percent, not 25 percent.
This article originally appeared in The New York Times.