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GOP budget cuts spending, changes Medicare and kicks off fresh budget battles

WASHINGTON — The budget balances in ten years, but Democrats will oppose so much of it that it’s going nowhere.

U.S. Rep. Paul Ryan’s budget balances in 10 years, thanks to both $4.6 trillion in spending cuts (out of $46 trillion-worth of spending over 10-year budget, he said) and by accepting the new revenue that came from January’s fiscal cliff deal.
REUTERS/Gary Cameron
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  • The budget repeals the Affordable Care Act, though it keeps in place more than $700 billion in cuts to Medicare enacted under the law.
  • It would make the customary structural changes to Medicare, in which the government would subsidize the premiums individuals pay for private insurance while making traditional Medicare available as an option (such a plan would begin for retirees in 2024).
  • The budget would simplify the tax code by creating just two tax rates: 10 percent and 25 percent for individuals and 25 percent for corporations. Ryan said lawmakers would have to end certain tax breaks and deductions to make up for the lost revenue under these lower rates. Such tax reform would be even more difficult given the $600 billion tax hike Congress approved in January.