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WASHINGTON — Republican Rep. Paul Ryan introduced the second iteration of his “Path to Prosperity” budget plan on Tuesday, a 2013 version of the budget he introduced last year. The two plans share the same name, and they’re likely to garner the same reaction from lawmakers on Capitol Hill.
The budget contains a trove of proposals favored by Republicans but dispelled by Democrats, the biggest of which are the changes to Medicare. The Ryan plan would replace the current Medicare structure with a voucher system in which the government would subsidize the premiums individuals pay for private insurance instead, though the traditional Medicare system is an option for purchase. (This plan is for workers under the age of 55 — current and soon-to-be retirees will be grandfathered into the old system.)
The plan is a modified version of the one Ryan proposed last spring, one Democrats seized on as an “end to Medicare,” a tome the White House and House Democrats have already repeated Tuesday morning.
The proposal also replaces a forthcoming $55 billion cut to defense department spending with cuts to discretionary spending in areas like agriculture, energy, financial services, etc. The cut was mandated by the debt ceiling deal President Obama and Congress agreed to over the summer, but Republicans have vehemently opposed allowing the defense cut to take effect.
One of the plan’s highlights is a simplified, flattened tax code, in which the current code is dispensed with and replaced with two individual income tax brackets of 10 percent and 25 percent. The corporate tax rate would decrease from 35 percent to 25 percent. Such a plan would invariably result in lower government revenues, but Ryan said the plan would make up for that by closing tax loopholes. It’s the lower rate and broader base frequently proposed by lawmakers over the summer, and one that all Republicans on the House Ways and Means Committee — a group that includes Minnesota Rep. Erik Paulsen — approved, Ryan said.
Even with the closed loopholes, Ryan’s plan would reduce federal revenues by more than $2 trillion over the next 10 years, relative to President Obama’s budget proposal. It reduces spending by $5 trillion versus Obama’s budget, most of which comes from repealing the Affordable Care Act health care law ($1.5 trillion in savings) and cutting funds for Medicaid ($770 trillion) and other mandatory government spending ($1.9 trillion).
In all, Ryan’s budget spends $1.028 trillion during the upcoming fiscal year, less than the $1.047 trillion cap approved by Congress last year and built into Obama’s budget. In the long run, it reduces federal spending from 24 percent of the GDP to 20 percent by 2015 and will balance by 2040.
Democrats united
So where does that leave us? House Democrats were united in voting against Ryan’s 2012 budget and certainly won’t support this year’s plan. Only four Republicans defected when the House took up the 2012 plan, but there is a risk that the chamber’s most conservative members will revolt this year — the conservative Club for Growth has already warned that the plan doesn’t cut deeply enough, and should balance within the decade, instead of waiting until 2040.
Democrats see the Medicare argument as a winner, and will likely squeeze as much out of the “Ryan ends Medicare” message as they can. The budget could be a politically risky one for Republican candidates this fall as well.
The House budget committee will consider the bill Wednesday and it could come up for a full House vote as early as next week.
Devin Henry can be reached at dhenry@minnpost.com. Follow him on Twitter: @dhenry
Ryan budget: Path to Poverty
Doubling down on bad ideas won’t make them good ideas.
Let’s see, sacrifice seniors health care, check.
Sacrifice future health care for children and working adults, check.
Put for-profit insurance more squarely between people and their doctors, check.
Buy more bombs but steal money from taxpayers to pay for it, check.
Cut taxes for the rich and corporations and magically expect a balanced budget, check.
etc.
etc.
Oh yeah, steal the last can of Who-Hash from poor people, check.
Is there something in there too about making women second class citizens and the subjugate property of men? Then it would be complete.
And Republicans wonder why their brand is in the gutter.
No that we got ours….
Basically Ryan’s plan says, “Stop investing in the things that made success possible for our generation, because we already got ours.”
What is the Dem alternative?
All day I’ve seen a lot of criticism on the Ryan budget proposal, but I’m not hearing a lot of alternatives coming from the other side on how to save Medicare for those under 40 right now. I’m 33, I’ve been paying into the system since I was 15 years old. In less than 10 years now, Medicare will be bankrupt, and we’re bankrupting it faster with the payroll tax holiday.
I have never heard a Democrat alternative plan to save Medicare for folks like me and younger, nor Social Security. I know people do not like change, no one does, especially when that change involves us altering what has been an implicit promise, and there there is no way to keep it. The unfunded liability right now is over $55 Trillion for Medicare and Social Security, meaning we would need that cash on hand today with growth and interest to make good on our promises.
We all know that isn’t the case, and it’s not going to happen. So, what is the Democrats plan to save Medicare? The bill is coming due fast, and in the next 40 years the cost of Medicare alone is projected to be as much as all tax revenue the federal government takes in (estimating 18% of GDP, which is the average over the past 60 years). We can fix it gradually now, or we can just wait until it collapses upon itself. Either way, it means less benefits for everyone paying in now, more out of pocket costs, and less access to care.
It’s one thing to criticize, but Dems need to have an alternative to be relevant in the conversation, because the status quo is not a winning position.
Just in case someone thought this wasn’t a political document
The lead paragraphs in Ryan’s “Facts and Summary”:
The President and his party’s leaders refuse to take action in the face of the most predictable economic crisis in our nation’s history. The President’s budget calls for more spending and more debt, while Senate Democrats – for over 1,000 days – have refused to pass a budget. This unserious approach to budgeting has serious consequences for American families, seniors, and the next generation.
House Republicans refuse to ignore our generation’s greatest domestic challenge: reforming and modernizing government to prevent an explosion of debt from crippling our nation and robbing our children of their future. We’re advancing a budget that builds upon a bipartisan consensus for principled solutions: real spending discipline and restored economic freedom; patient-centered health care reform; and pro-growth tax reform. The House Republican budget – The Path to Prosperity – offers a clear choice of two futures. We’re putting our trust in the American people to choose a brighter future for generations to come.
Dem alternative?
easy peasy
1) Restructure Part D so Medicare can actually negotiate prices with Big Pharma — George the Third’s gift to the pharmaceutical companies needs to be returned.
2) Follow through with and extend the Affordable Care Act’s “de-privitization” of Medicare by dumping the Humanas and other for profit medicare intermediaries. Their “administrative costs” (read unreasonably high CEO salaries and perks) are too high.
3) Return to the original intention and (belatedly) expand Medicare to cover ALL — young old healthy and unhealthy. Bigger pool, lower risks, health care costs off the backs of business.
Problem solved.
Your welcome.
We should have done this long ago…..
If we had Rep. Ryan’s budget he would not be in the House……he went to college by Social Security survivors benefits. Oh well, he got his”……
Mr. Hamilton has this about right, a political document.
I could not find one tax deduction that Mr. Ryan would remove from the tax code. Mortgage interest deduction? State and local taxes? Child dependent? Or perhaps the massive corporate welfare subsidies and deductions?
Sounds pretty but it’s not a flower.
Here’s the hokum behind Ryan’s Medicare idea
Ryan and others think they’ve solved their problem of previous backlash against the Medicare voucher idea by addditing in the provision to “preserve” traditional Medicare for those who want to keep it.
What they’re not telling you is that with their plan, traditional Medicare will become economically unavailable as the price of it keeps rising, due to insurance companies making sure that they don’t take on many of the sickest, most expensive seniors, leaving them on traditional Medicare . Plus, as traditional Medicare loses more & more of its market share to the private policies, its current leverage to hold down medical prices (11% lower than private insurance) will be lost, forcing even higher Medicare premiums.
The Ryan plan will clearly reduce federal expenditures. However, it will absolutely not, as they claim, hold down overal medical costs. Instead, it will increase them by 40%, and double the out-of-pocket expense to seniors. The Congressional Budget Office told Ryan this a year ago. Ryan claims to “prove” how free market competition will reduce overall costs by pointing to the track record of the privatized Medicare Part D drug coverage. But, he lies about this, failing to state that Part D costs are less than expected not because of privatizing, but simply because drug price increases for everyone slowed dramatically as many blockbuster drugs went off patent and people switched to low cost generics.
Most telling, Ryan et al refuse to talk about the true prototype of their idea, which is the existing Medicare Advantage program. It is the same kind of privatized “premium support” model that he proposes. They don’t talk about it because it has a proven track record of wasting many billions in taxpayer dollars, mostly due to the insurance companies’ success in excluding sick, expensive enrollees. The wasted overpayments to these insurance companies is well documented, and led to the Affordable Care Act’s provision of heavily reducing those profit subsidies.
To solve Medicare’s real financial problem, the answer is to actually expand it to everyone and stop privatizing any of it. This is part and parcel of our country’s overall health care crisis.
Another thing Ryan and the “corporatizers” leave out
is the fact that Medicare came into being largely because insurance companies refused to insure old, sick people. There’s not enough money in it.
And thank you, Mr. Robbinson for expanding upon my original post..
Rus S.
There are Democratic/liberal plans that will ensure the future health of both Social Security and Medicare. We just need the votes in Congress.
In 1983, Social Security was in danger of not having enough in its trust fund to cover baby boomers when they began to retire in the 2000s. Alan Greenspan was among those who fixed it by slightly increasing the percentage of tax withheld and raising the cap on earnings. That’s all we need to do now to keep it fully funded for the next 75 years, and we could be doubly sure it can meet all needs by eliminating rather than just raising the cap and by taxing unearned as well as earned income.
Medicare is expected by the Right to get by with less money, even though the number of persons over 65 increases each year. Even with Medicare, I am just one of millions whose uncovered medical, dental, eye care, drug costs and insurance premiums take about a fourth of my pre-tax income. Medicare can be not just saved but improved by adopting the same revenue enhancements that would save Social Security.
Ayn Rand is dead. So is Milton Friedman. Anti-tax guru Grover Norquist is alive, but he came up with his one big idea (no Republican should ever raise taxes) at the age of twelve and has convinced the Right that, against all common sense and reality, this childlike policy of reducing revenue will make our country richer and stronger.
Making seniors fear full is the new Republican strategy
My 90 year old mother who made a contribution to one of my old high school friends who ran as a republican for the legislature several years ago keeps getting scare mail from conservatives.
Sometimes as many as 75 pieces in one day.
Most of it is laced with things that can be easily debunked by anyone with computer search skills, but of course she has none. The other day she was railing against Obamacare, this from a woman who hasn’t seen a medical bill in 25 years. She’s concerned about healthcare rationing and doesn’t realize we have it now.
Now she will get mail saying the Democrats have done nothing to save Medicare but Ron Paul has, true but not because they didn’t try.
Frankly there are lots of options, one only has to read T.R. Reid’s book to see what it could be like. All from countries that spend half of what we do on medical care and have better outcomes.
On an entirely different topic: Milton Friedman in his later years backed off from what is now right wing rhetoric, so give old Milton a break. Some of the right now consider him to liberal.