A group of nine Senate Republicans that includes some tea-party-backed lawmakers unveiled a proposal to balance the budget by fiscal 2020 by reducing spending to 18.5 percent of the gross domestic product from the current 24 percent of GDP and turn Medicaid into a block grant program.
“Deficits are not inevitable,” said Sen. Pat Toomey, R-Pa., at a press conference on Tuesday. “They can be stopped if we in Congress have the will to stop them."
Toomey unveiled his plan with four co-sponsors, freshman Sens. Marco Rubio, R-Fla., Mike Lee, R-Utah, and Ron Johnson, R-Wis., as well as tea-party favorite Sen. Jim DeMint, R-S.C. It comes as Senate Budget Chairman Kent Conrad, D-N.D., is planning to unveil his fiscal 2012 budget resolution, which is expected to cut $4 trillion from the deficit over 10 years. A markup could come as soon as this week, but more likely next week.
The deficit for fiscal 2011, which ends September 30, is projected expected to top 9 percent of GDP, which is among the highest levels hit as a percentage of the economy since World War II.
Toomey said his budget was designed to lay down a marker that the budget could be balanced in 10 years.
The Medicaid provision in the proposal is taken from the House budget passed last month. However, Toomey’s budget does not include the proposal in the House plan to change Medicare into a voucher program.
Toomey—who supports the House plan, drafted by House Budget Chairman Paul Ryan, R-Wis.—said he did not include the Medicare idea because his budget is focused on the next 10 years. Under the House plan, changes to Medicare would not kick in for 10 years, so it will have as little affect on seniors as possible.
Ryan’s “goal is different than the goal we set in this budget,” Toomey said. “His goal is long-term, it's permanent solvency, and he walks through structural reforms that achieve that.”
On spending, the plan reduces non-defense discretionary spending to fiscal 2006 levels in fiscal 2012 and freezes spending for the subsequent six years, after which it would be indexed to the consumer price index. The proposal spends 3 percent less than the House-passed budget resolution.
The Toomey budget would also reduce the debt to 52 percent of GDP by fiscal 2021 from 69 percent expected for fiscal 2011. The plan also recommends reducing the corporate tax rate to 25 percent from 35 percent.
Toomey also said his plan would buy time to do more far-reaching reforms, such as revamping Social Security.
“A permanent solution will require broader reforms than what we have in this budget,” Toomey said. “For instance, ultimately we need to reform the Social Security program, we need to reform Medicare. But this budget represents a necessary first step.”