Ryan: Budget For Real Spending Discipline
March 21, 2012 by Sam Rolley
House Republicans introduced an ambitious, if risky during an election year, budget plan to restructure the way government operates and set the Nation on a course to eliminate its deficits by 2040.
The proposal, authored by Representative Paul Ryan (R-Wis.), would reduce debt by reshaping Medicare and Medicaid while deeply cutting other domestic spending and reshaping the tax code to give Americans lower tax rates.
The plan will be rejected by the Democratic Senate, though The Washington Post reports that it is likely less intensive than most Tea Party conservatives would consider ideal. Ryan’s plan, which he drafted with Democratic Senator Ron Wyden (Ore.), would turn Medicaid spending into a block grant program and cut food stamps and other social welfare programs. The plan, like past GOP budget proposals, also calls for offering seniors retiring in future years payments with which to buy private health insurance coverage along with a traditional fee-for-service option to alleviate Democratic concerns over the restructuring. Many of the budget plan proposals have proven to be anathema to most Democratic lawmakers in the past.
In a recent opinion piece in The Wall Street Journal, Ryan defends his proposals, “Our budget’s Medicare reforms make no changes for those in or near retirement. For those who will retire a decade from now, our plan provides guaranteed coverage options financed by a premium-support payment. And this year, our budget adds even more choices for seniors, including a traditional fee-for-service Medicare option.”
The timing of the plan’s release is expected to make Republican willingness to make deep cuts and change the way healthcare funding is handled a key issue for Democrats in 2012.
Ryan also reiterates the GOP’s desire to simplify the tax code with the plan similar to those offered by both GOP Presidential candidates Mitt Romney and Rick Santorum. It replaces the current six brackets of the tax system with just two tax levels: a 10 percent marginal tax for low-wage earners and 25 percent for those with higher incomes. Corporate taxes would also be slashed from 35 percent to 25 percent, and corporate taxes for overseas profits mostly would be eliminated under the Ryan proposal.
To offset the lower tax rates, which Republicans contend will spur economic growth, the budget proposal allocates $1.028 trillion in Federal spending for fiscal year 2013; the spending allocation will also likely raise a stink among Democrats at $19 billion less than the cap imposed after last summer’s contentious debt ceiling negotiations.
Paul, however, says his plan is the only way to turn around the U.S. economy without making dangerous sacrifices, “Like last year, our budget delivers real spending discipline. It does this not through indiscriminate cuts that endanger our military, but by ending the epidemic of crony politics and government overreach that has weakened confidence in the nation’s institutions and its economy. And it strengthens the safety net by returning power to the states, which are in the best position to tailor assistance to their specific populations.”
Democratic critics say the Ryan plan is a surefire way to make Congressional budget negotiations the same tedious embarrassment that they were last year.
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