GOP 2012 Budget Proposal to cut $4T over a Decade

Editor’s Note: And that still isn’t enough; given the projected deficits, $4T over the next 10 years won’t even wipe out half the yearly budget shortfall, let alone put a dent in the fiscal gap.

WASHINGTON (AP) — A Republican plan for the 2012 budget would cut more than $4 trillion over the next decade, more than even the president’s debt commission proposed, with spending caps as well as changes in the Medicare and Medicaid health programs, its principal author said Sunday.

The spending blueprint from Rep. Paul Ryan, the chairman of the House Budget Committee, is to be released Tuesday. It deals with the budget year that begins Oct. 1, not the current one that is the subject of negotiations aimed at preventing a partial government shutdown on Friday.

In an interview with “Fox News Sunday,” Ryan said budget writers are working out the 2012 numbers with the Congressional Budget Office, but he said the overall spending reductions would come to “a lot more” than $4 trillion. The debt commission appointed by President Barack Obama recommended a plan that it said would achieve nearly $4 trillion in deficit reduction.

Ryan said Obama’s call for freezing nondefense discretionary spending actually locks in spending at high levels. Under the forthcoming GOP plan, Ryan said spending would return to 2008 levels and thus cut an additional $400 billion over 10 years.

Speaking broadly about the proposal, Ryan said it would include:

-A “premium support system” for Medicare. In the future, older people would choose plans in the marketplace and the government would subsidize those plans. Ryan said that would differ from the voucher system he has proposed in the past. Those 55 and older would remain under the present Medicare system.

Ryan acknowledged that the “premium support system” would shift more costs to Medicare recipients, especially what he called “wealthy seniors.” He did not define at what level someone would be considered wealthy.

-Block grants to states for Medicaid, the health program for the poor. Ryan disputed reports that the plan would seek savings of $1 trillion over 10 years from Medicaid, but would say only that the details would be in the plan.

“Medicare and Medicaid spending will go up every single year under our budget. They don’t just go up as much as they’re going right now,” he said. Ryan said governors have told members of Congress they want “the freedom to customize our Medicaid programs. … We want to get governors freedom to do that.”

-A statutory cap on actual discretionary spending as a percentage of the economy. While Ryan did not specify the amount during the interview, he said it would be at a lower level than proposed by Obama and would return the government to its “historic size.”

-Pro-growth tax changes, including lower tax rates and broadening the tax base. Ryan said overhauling taxes would boost the economy. The plan will not propose tax increases.

Ryan was a member of the bipartisan debt commission but voted against its final recommendations, saying they failed to reduce spending on health care. The commission also endorsed tax increases along with painful spending cuts as necessary to dealing with the debt problem.

“We’re not going to go down the path of raising taxes on people and raising taxes on the economy. We want to go after the source of the problem, and that is spending,” Ryan said Sunday.

Ryan didn’t mention how the budget plan would address Social Security.

Democratic Sen. Mark Warner of Virginia was skeptical that Ryan’s proposal could achieve its targets without damaging social programs. He also questioned whether reductions in defense spending and seeking more revenue through tax reform would be part of the plan.

“I don’t know how you get there without taking basically a meat ax to those programs who protect the most vulnerable in the country,” Warner said on CNN’s “State of the Union.”

“I’ll give anybody the benefit of a doubt until I get a chance to look at the details,” he said, “but I think the only way you’re going to really get there is if you put all of these things, including defense spending, including tax reform, as part of the overall package.”

Sen. Dick Durbin, D-Ill., part of a six-member group of Republicans and Democrats forging their own budget proposal, said that the lawmakers would be looking for “real balance” in Ryan’s plan and wanting all options considered.

“I think we’ll come at it differently,” Durbin said on “Meet the Press” on NBC. “The idea of sparing the Pentagon from any savings, not imposing any new sacrifice on the wealthiest Americans, I think goes way too far. We have got to make certain that it’s a balanced approach and one that can be sustained over the next 10 years.”

Ryan criticized Obama, telling Fox that the president was “punting on the budget and not doing a thing to prevent a debt crisis, which every single economist tells us is coming sooner rather than later in this country.”

“You have to address the drivers of our debt,” he said. “We need to engage with the American people on a fact-based budget, on stopping politicians from making empty promises to people and talk to the country about what is necessary to fix these problems.”

Read more at Andy Sutton’s Extemporania