I'm sure some will argue with the specifics, but no one can argue with the seriousness of the GOP House proposal. -- Congress is currently embroiled in a funding fight over how much to spend on less than one-fifth of the federal budget for the next six months. Whether we cut $33 billion or $61 billion—that is, whether we shave 2% or 4% off of this year's deficit—is important. It's a sign that the election did in fact change the debate in Washington from how much we should spend to how much spending we should cut. But this morning the new House Republican majority will introduce a budget that moves the debate from billions in spending cuts to trillions. America is facing a defining moment. The threat posed by our monumental debt will damage our country in profound ways, unless we act. No one person or party is responsible for the looming crisis. Yet the facts are clear: Since President Obama took office, our problems have gotten worse. Major spending increases have failed to deliver promised jobs. The safety net for the poor is coming apart at the seams. Government health and retirement programs are growing at unsustainable rates. The new health-care law is a fiscal train wreck. And a complex, inefficient tax code is holding back American families and businesses. Steve Moore has the details on Rep. Paul Ryan's plan to cut spending. The president's recent budget proposal would accelerate America's descent into a debt crisis. It doubles debt held by the public by the end of his first term and triples it by 2021. It imposes $1.5 trillion in new taxes, with spending that never falls below 23% of the economy. His budget permanently enlarges the size of government. It offers no reforms to save government health and retirement programs, and no leadership. Our budget, which we call The Path to Prosperity, is very different. For starters, it cuts $6.2 trillion in spending from the president's budget over the next 10 years, reduces the debt as a percentage of the economy, and puts the nation on a path to actually pay off our national debt. Our proposal brings federal spending to below 20% of gross domestic product (GDP), consistent with the postwar average, and reduces deficits by $4.4 trillion. A study just released by the Heritage Center for Data Analysis projects that The Path to Prosperity will help create nearly one million new private-sector jobs next year, bring the unemployment rate down to 4% by 2015, and result in 2.5 million additional private-sector jobs in the last year of the decade. It spurs economic growth, with $1.5 trillion in additional real GDP over the decade. According to Heritage's analysis, it would result in $1.1 trillion in higher wages and an average of $1,000 in additional family income each year. Here are its major components: • Reducing spending: This budget proposes to bring spending on domestic government agencies to below 2008 levels, and it freezes this category of spending for five years. The savings proposals are numerous, and include reforming agricultural subsidies, shrinking the federal work force through a sensible attrition policy, and accepting Defense Secretary Robert Gates's plan to target inefficiencies at the Pentagon. View Full Image • Welfare reform: This budget will build upon the historic welfare reforms of the late 1990s by converting the federal share of Medicaid spending into a block grant that lets states create a range of options and gives Medicaid patients access to better care. It proposes similar reforms to the food-stamp program, ending the flawed incentive structure that rewards states for adding to the rolls. Finally, this budget recognizes that the best welfare program is one that ends with a job—it consolidates dozens of duplicative job-training programs into more accessible, accountable career scholarships that will better serve people looking for work. As we strengthen and improve welfare programs for those who need them, we eliminate welfare for those who don't. Our budget targets corporate welfare, starting by ending the conservatorship of Fannie Mae and Freddie Mac that is costing taxpayers hundreds of billions of dollars. It gets rid of the permanent Wall Street bailout authority that Congress created last year. And it rolls back expensive handouts for uncompetitive sources of energy, calling instead for a free and open marketplace for energy development, innovation and exploration. • Health and retirement security: This budget's reforms will protect health and retirement security. This starts with saving Medicare. The open-ended, blank-check nature of the Medicare subsidy threatens the solvency of this critical program and creates inexcusable levels of waste. This budget takes action where others have ducked. But because government should not force people to reorganize their lives, its reforms will not affect those in or near retirement in any way. Starting in 2022, new Medicare beneficiaries will be enrolled in the same kind of health-care program that members of Congress enjoy. Future Medicare recipients will be able to choose a plan that works best for them from a list of guaranteed coverage options. This is not a voucher program but rather a premium-support model. A Medicare premium-support payment would be paid, by Medicare, to the plan chosen by the beneficiary, subsidizing its cost. In addition, Medicare will provide increased assistance for lower- income beneficiaries and those with greater health risks. Reform that empowers individuals—with more help for the poor and the sick—will guarantee that Medicare can fulfill the promise of health security for America's seniors. View Full Image Getty Images/Imagezoo We must also reform Social Security to prevent severe cuts to future benefits. This budget forces policy makers to work together to enact common-sense reforms. The goal of this proposal is to save Social Security for current retirees and strengthen it for future generations by building upon ideas offered by the president's bipartisan fiscal commission. • Budget enforcement: This budget recognizes that it is not enough to change how much government spends. We must also change how government spends. It proposes budget-process reforms—including real, enforceable caps on spending—to make sure government spends and taxes only as much as it needs to fulfill its constitutionally prescribed roles. • Tax reform: This budget would focus on growth by reforming the nation's outdated tax code, consolidating brackets, lowering tax rates, and assuming top individual and corporate rates of 25%. It maintains a revenue-neutral approach by clearing out a burdensome tangle of deductions and loopholes that distort economic activity and leave some corporations paying no income taxes at all. This is America's moment to advance a plan for prosperity. Our budget offers the nation a model of government that is guided by the timeless principles of the American idea: free-market democracy, open competition, a robust private sector bound by rules of honesty and fairness, a secure safety net, and equal opportunity for all under a limited constitutional government of popular consent. We can reform government so that people don't have to reorient their lives for less. We can grow our economy, promote opportunity, and encourage upward mobility. This budget is the new House majority's answer to history's call. It is now up to all of us to keep America exceptional. Mr. Ryan, a Republican, represents Wisconsin's first congressional district and serves as chairman of the House Budget Committee.
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non starter Healthcare reform will not be repealed. The Affordable Care Act: One Year Later Reforms under the Affordable Care Act have brought an end to some of the worst abuses of the insurance industry. These reforms have given Americans new rights and benefits, by helping more children get health coverage, ending lifetime and most annual limits on care, allowing young adults under 26 to stay on their parent’s health insurance, and giving patients access to recommended preventive services without cost. Many other new benefits of the law have taken effect, including 50% discounts on brand-name drugs for seniors in the Medicare “donut hole,” and tax credits for small businesses that provide insurance to employees. More rights, protections and benefits for Americans are on the way through 2014.
exactly. What one of the stupid things here is that elderly would get vouchers to buy private insurance. But without the health care reform no insurance company would accept elderly as customers, so those reforms are worth less than zero.
The whole premise of Ryan's budget is built on repealing the new healthcare law. Ain’t gonna happen please come back with real suggetions
I disagree. When you build a plan that you know has 0% chance of ever passing Congress and becoming law, it loses some its credibility as a serious proposal. I'd also be curious to see how and why you think removing Medicare and replacing it with subsidizing private insurance plans - which we know is more expensive than Medicare because they exist now - will reduce the deficit.
Especially given the fact that once you repeal health care reform no private insurance company will accept those voutures from the govt. It was poorly thought out on Ryan's part.
at work so too lazy to read the whole thing now but did a CTRL-F and searched for "defense" and it only came up once for addressing Defense Secretary Robert Gates. Any proposal which does not include major cuts to defense can not be taken seriously.
Agreed. I would take it a bit farther (and anger both the left and right), but any plan that doesn't address defense spending, Medicare, Medicare, Social Security AND include some tax increases isn't a serious comprehensive proposal. The reality is that all of those have to be touched if you want to truly fix the budget problem rationally.
My quick and dirty summary removing the most of the partisan snipes: A fair bit about spending caps, rolling back gov't spending and enforcement of budgets. Good stuff, I guess, but a pretty standard talking point which is easy to make when you don't have to pin point which agencies and services you'll defund. Possibly the Defense cuts go here? Offloading Welfare? Medicaid and Foodstamps to the States. Giving the States 'a range of options' usually results in a hit to State budgets. States will need to fund this stuff from the same taxpayers. Lots of jargon about Medicare. I *think* the gist of the proposal is choice amongst pre approved private insurance (I'm guessing this is the 'guaranteed options.'). So they'll somehow ensure coverage is available, at least as good as what congress gets, and offer premium assistance or payment. Not sure how this is a money saver. Seems like Obamacare on steroids in place of Medicare? Full out tax reform, simplification and consolidating brackets makes sense to me. Top rate may be lower then I'd accept -- but coupled with state rates possibly OK. Don't know why it has to be 'revenue neutral.' A discontinuance of incentives for "uncompetitive' (read: non oil based) energy will make some Arabs, Canadians, and Mexicans, as well as benefactors of a continued military presence in certain regions smile. Let the market rule. I think it's more of a political statement then an economic one. Smaller government, strict spending caps, off load what you can to the states, don't 'interfere' with the market in healthcare, energy, finance or otherwise, simplify and lower tax. Not so sure the math works. This is more of a critique designed to touch the talking points against the current government and circumstance then a realistic or honest plan. About what you should expect from an opposition party, I guess. But I do a agree that a comprehensive tax overhaul and review of program duplication would be good. I just don't really trust these guys to do it .
That's sort of how I feel about Dems and GOPers in general. I think we get our best government when the GOP sets the big picture agenda, but the Dems do all the details. For example: GOP saying we must cut $50B of the budget is good. But Dems are the ones that would be able to do it best.
LOL, Krugman just graphed out the assumptions re: unemployment these guys used to make their numbers balance: I guess when we start building the flying car factories in 2015 that will take us down to 0% unemploymetn. The path to prosperity is, once again, lined with....magic!
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Buyer beware--- http://english.aljazeera.net/news/europe/2010/10/2010102011504468626.html UK announces 490,000 job cuts Harshest austerity measures since second world war unveiled as public spending is slashed to deal with country's debts. http://www.dailyexpress.co.uk/posts...y-UK-economy-is-now-only-stronger-than-Japan/ THE British economy is set to lag behind that of France, the USA, and Germany, according to a sobering report released today. Britain's economic growth is set to fall behind that of all the G7 Nations in the next quarter and is only set to outperform tsunami-struck Japan, according to the Organisation for Economic Co-operation and Development (OECD). Elsewhere, the British Chambers of Commerce (BCC) said a poll of 6,000 firms revealed “worrying” evidence about the stability of the British recovery. That said, responsible deficit reduction is a worthy goal, and I kinda like this--- Last line is ambiguous to say the least, but am I the only one reading cap-and-trade in between the lines?
Make no mistake, this bill doesn't save Medicare and Medicaid, it destroys it. CBO: GOP Budget Would Increase Debt, Then Stick It To Medicare Patients The nonpartisan Congressional Budget Office's initial analysis of the House GOP budget released today by Rep. Paul Ryan (R-WI) is filled with nuggets of bad news for Republicans. In addition to acknowledging that seniors, disabled and elderly people would be hit with much higher out-of-pocket health care costs, the CBO finds that by the end of the 10-year budget window, public debt will actually be higher than it would be if the GOP just did nothing. Under the so-called "extended baseline scenario" -- a.k.a. projections based on current law -- debt held by the public will grow to 67 percent of GDP by 2022. Under the GOP plan, public debt would reach 70 percent of GDP in the same window. In other words, the spending cuts Republicans would realize in the first 10 years would be outpaced by deficit increasing tax-cuts, which Ryan also proposes. After that, debt projections under the plan improve decade-by-decade relative to current law. That's because 2022 would mark the beginning of the Medicare privatization plan. That's when, CBO finds, "most elderly people would pay more for their health care than they would pay under the current Medicare system."
It should be interesting to see if the crowd under 55 years of age will allow Medicare ala Paul Ryan to be taken away from them. Good luck having a million dollars extra in your 401(k) after living expenses to take care of one huge illness. Dubya made a similar proposal, but to take social security away from the under 55 crowd. Sadly I wouldn't put in past the over 55 crowd to say: "we got ours jack, let those under 55 fend for themselves." andmany of the under 55 crowd can't think far enough ahead to care, preferring to immerse themselves in daily amusements. Divide and conquer on age divisions has proven quite effective in the private and employment sector as you see such workers as auto workers, federal worker and post office workers and others working in work places in which the older employees are still going to enjoy a good pension, but the younger folks at the same job are not going to. Folks have voted for a party with guys like Governor Perry that have allowed wealth to be transferred to the upper 1% and who have defunded state government allowing state tuitions to rise ten times in the last 25 years when wages have gone up about 2.5 times, ony 1/10 as much. Many of the under 55 crowd don't realize how screwed their generation will be as they cheerfully, ala young libertarians, base their entire economic future on the assumption their health will always be like it is when they are young, they will always make the right moves in the stock or even job markets, their last 15 years of peak earnings will of course not be in one of the reoccurring periods like now in which the entire market is static, and so they are invincible. They don't need no stinking pensions, government backed health care , unions etc. as they are inevitable winners in the market.
Exactly. This sums it up rather nicely. Increasing our debt and destroying medicare isn't really doing anybody any favors.
