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.

WASHINGTON — U.S. Rep. Paul Ryan introduced the House GOP budget plan on Tuesday, kicking off a new round of budget battles on Capitol Hill.

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.

The budget would eventually reduce federal spending to just over 19 percent of GDP, down from 22 percent under current law. That means changes to entitlement spending (the budget would block grant Medicaid to the states, for example) and discretionary spending cuts deeper than those in current law, even though it increases defense spending by about $500 billion over 10 years.

 “Balancing the budget is not simply an act of arithmetic, it’s not just getting expenditures and revenues to add up,” Ryan said Tuesday. “Balancing the budget is a means to an end, it’s a means to a healthier economy, a pro-growth society, a pro-growth economy that delivers opportunity. That is first and foremost why we are doing this.”

The rest of Ryan’s budget is fairly similar to what he’s pitched — and what Democrats have rejected — in the past:

  • 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.

“The fiscal cliff occurred, but we don’t like the tax code that it produced,” Ryan said. “Therefore, we are proposing a new tax code that is more of a pro-growth tax code.”

The budget is so similar to what Ryan and the GOP have pitched over the last few years that Democrats are certain to reject it, and the budget will die soon after the GOP-controlled House passes it next week. Two other major budget frameworks, those from President Obama and from Senate Democrats, are certain to fail as well.

Some more reading on the budget:

  • The Washington Post has a more in-depth breakdown of what’s in the budget proposal.
  • The New York Times shows, graphically, what the GOP’s budget would do to the deficit and federal spending.
  • President Obama is on Capitol Hill this week to talk to lawmakers about the budget. Politico previews the meetings. 
  • Here’s the full Ryan budget proposal [PDF] itself.

Devin Henry can be reached at dhenry@minnpost.com. Follow him on Twitter: @dhenry

Join the Conversation

8 Comments

  1. Since the House of Representatives

    is the only institution that can initiate revenue bills it seems like they are entirely responsible for the budget not balancing. Seems they need to stop spouting off and to to start finding things that the other two branches will accept or own the deficit.

    I am totally puzzled as to why the President is so weak on this issue. But then again he is a weak President.

  2. Ayn Rand Wrote Fiction

    Paul Ryan – an avowed Ayn Rand disciple – believes that government is useful only to protect the interests of most privileged and that the “general welfare” of the nation is of little concern. Since military power is necessary to provide that security blanket and it is the source of great wealth for some of its contractors, it must protected at all costs in the Rand/Ryan ideology.

    That Paul Ryan has any credibility in the Republican Party demonstrates how demented the once honorable GOP has become.

  3. Didn’t they just run on this plan and lose?

    How does Paul Ryan’s budget with a new picture on the cover qualify as “news”?

  4. Tellingly (on a few levels)

    Mr. Ryan had a major Freudian slip, saying “we’re not going to give up on destroying the health care plan for the american people.” Oo la!

  5. It’s been said before

    …and probably more eloquently, but while the “new” Ryan budget may differ in detail from the “old” Ryan budget, it’s still a new coat of paint on the same rusted-out clunker they tried to sell us last year.

    Once more, the package consists of socialism for the rich, capitalism for the poor. It’s morally bankrupt besides, and as we’ve seen in Europe and elsewhere, the notion that “austerity” somehow benefits the society as a whole is a chimera. The “new” Ryan budget, much like the “old” Ryan budget, is based on ideology, not fiscal reality.

    Those that have, get. Those that don’t, dont.

  6. Paul Ryan change agent

    If the Republican Party is trying to change its image, Paul Ryan is not the person to put forth. This guy reaks the GOP and what it stands for. How many elections is the GOP willing to lose before they make meaningful changes that will appeal to the electorate?

  7. Anyone…

    can balance a budget based on unspecified cuts in loopholes and deductions. And, irony upon irony, it keeps the so-called $700m cut in Medicare for which he blasted Obama.

    By staking out an extreme position, it’s another squandered opportunity to enact meaningful, if somewhat painful, spending cuts.

  8. War Mongers

    When will the GOP wake up great idea lets reduce money from what we give our people while increasing a millitary budget that is al ready 7 times larger then the next xclosest budget, I hope America wakes up soon and we get ride of these war mongers for good

Leave a comment