By unveiling a budget blueprint that would erase the deficit in just 10 years, House Republicans sought on Tuesday to make that goal the gold standard and bare minimum for all future budget battles between the two parties.
“When you’re budgeting—just like families and businesses do—you cannot continue to kick the can down the road. You cannot continue to spend money you just don’t have,” said former vice presidential candidate and House Budget Committee Chairman Paul Ryan, R-Wis., flanked by his fellow committee members.
Despite the buildup to this new proposal, Ryan’s latest plan looks remarkably similar to his previous budgets in its substance: the same ones litigated on the presidential campaign trail in 2012 and that Democrats love to cast as draconian.
Ryan would turn Medicare into a fixed-cost program for people 54 and younger, beginning in 2024, by giving them a set amount of money to purchase their own health care or a traditional Medicare plan on the private market. This assumes that the business competition will keep prices low enough to make health insurance affordable for senior citizens.
His budget turns Medicaid and food-stamp funding over to the states—effectively transforming these programs from open-ended entitlements and forms of assistance for anyone in need into programs with set budgets. This would mean that people could only receive Medicaid or Supplemental Nutrition Assistance Program benefits vis-à-vis state governments as long as the federal money lasted.
Ryan wants to wind down government programs such as housing giants Fannie Mae and Freddie Mac. His budget also seeks to repeal the Affordable Care Act and simplify the tax code to include just two tax brackets, 10 percent and 25 percent.
These policies may offend liberals’ sensibilities as they have in past years (the House Budget Committee’s top Democrat, Rep. Chris Van Hollen of Maryland, called Ryan’s new budget “reckless”). In fact, these ideas are basically a rehash from the old-school Ryan playbook.
The biggest policy changes in the new Ryan budget—and the ones that truly help him balance the budget in a decade—instead come from President Obama’s signature policies, like raising taxes on the rich.
The roughly $600 billion in increased taxes from the fiscal-cliff deal negotiated at the end of last year help Ryan achieve his balanced-budget goal. Savings yielded by the Affordable Care Act, another major piece of legislation that originated within the White House, also help erase some of the red ink (though Ryan’s budget assumes the law’s repeal). Ryan’s goal of balancing the budget in 10 years was aided as well by the slowdown in the rate of federal health care spending that the nonpartisan Congressional Budget Office first noted in February in its annual outlook. In 2013, Medicare is expected to grow by just 4 percent, or $21 billion.
Ryan’s budget does nothing to tackle Social Security (though budget resolutions, by law, never do). Its Medicare cuts do not take effect until 2024, which means that Ryan does not tackle the true drivers of the long-term deficit during this decade—a point of criticism that he and House Republicans often lob at Democrats.
The other tweaks that Ryan says he is proposing in order to balance the budget by the end of the decade include cuts to federal employees’ pensions and an additional two-year extension of the Budget Control Act’s spending caps. The cost estimates for those savings will not be available until the end of the week, according to a Ryan spokesman.
Still, this lack of major new policies from Ryan did little to appease Democrats. Van Hollen hosted a 45-minute session with reporters Tuesday to point out the inconsistencies in Ryan’s budget. Chief among his complaints: the way Ryan wants to undo both the Affordable Care Act and slash tax rates, while simultaneously counting savings in the health care law and the new revenue from the fiscal-cliff deal as a way to balance his budget in a shorter time frame. “It’s a total hoax,” Van Hollen said.
Next up in this week’s budget battles is the Senate Democrats’ proposal, set to be released Wednesday. That will serve as a rebuttal to the Ryan plan and the Republicans’ complaint that Senate Democrats have not produced a budget since 2009. That proposal, led by new Senate Budget Committee Chairwoman Patty Murray, D-Wash., will call for $975 billion in new revenue and $975 billion in spending cuts, including $275 billion in health care cuts. The health care cuts would not come from any change in benefits, according to Democrats familiar with the budget.
The two competing budget proposals are not expected to result in a successful budget conference. When asked about this possibility, Van Hollen laughed a little and said: “Miracles can happen.” Instead, the two budget plans will serve as the opening bids in the next cycle of the ongoing fiscal wars and will serve as a reminder of where the parties stand ahead of the debt-ceiling fight this summer.
This article appears in the March 13, 2013, edition of National Journal Daily as New Ryan Budget Looks Strikingly Similar to Old Ones.