By David Lawder
WASHINGTON (Reuters) - U.S. Senate Republicans on Wednesday proposed less aggressive federal budget cuts than their House counterparts, forgoing a massive revamp of the Medicare health system for seniors and setting up a conflict over defense spending.
Senate Budget Committee Chairman Mike Enzi's plan, like the House of Representatives plan, has little to no chance of becoming law as is. Instead, both mark the onset of the annual congressional budget battle and a test of Republicans' ability to get things done since winning control of both houses of Congress for the first time since 2006.
Enzi's spending blueprint 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 budget surplus a year later, in 2025, and assumes nearly $1 trillion in revenue from some expiring tax breaks that have routinely been renewed.
Like the House budget, Enzi's plan gets the bulk of its savings from repealing the Affordable Care Act, Democratic President Barack Obama's signature healthcare reform law, and by cutting welfare programs and other federal benefits.
The Senate version maintains statutory caps on the core defense budget and seeks to make it very difficult to add money to an off-budget war funding account. That puts it in direct conflict with the House's plan to boost defense spending by adding $36 billion to the fiscal 2016 war operations budget.
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.
In a speech in Cleveland on Wednesday, Obama slammed Republicans' latest budget plans, saying that boosting funding for research, education and infrastructure would be better for economic growth than the tax cuts Republicans envision.
"Republicans in Congress have put forward the same proposals year after year after year regardless of the realities of the economy," Obama said.
Both Republican budgets have drawn criticism from defense hawks who want to match Obama's $612 billion Pentagon and warfighting request. A clash with fiscal conservatives in both chambers who want to adhere to the caps could threaten passage.
"As I have made clear, I will not support a budget resolution that sets defense spending at sequestration levels," Senator John McCain, a Republican who is chairman of the Senate Armed Services Committee, said on Wednesday. "Doing so would be a recipe for disaster for America's national security."
If the House and Senate cannot reach a budget compromise, Republicans would lose a rare opportunity to use a procedural tool to attach legislation to repeal or replace Obamacare and pass it with a simple majority in the Senate, which is controlled by Republicans 54-46, following the November congressional elections.
Both chambers have included budget language for this purpose, and new healthcare legislation could gain momentum if the Supreme Court strikes a blow this year to Obamacare.
Enzi's plan also declines to adopt the House prescription to turn Medicare into a system of private insurance subsidies. It wrings some $430 billion from the program through 2025 by adopting the Obama's Medicare savings goals.