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House Republicans will release their 2012 budget plan today (Tuesday), proposing more than $4 trillion in cuts over the next decade and trimming billions of dollars from Medicare expenses.
House Budget Committee Chairman Rep. Paul D. Ryan, R-WI, prepared the spending outline for the fiscal year beginning Oct. 1.
Ryan told Fox News Sunday that U.S. President Barack Obama was "punting on the budget and not doing a thing to prevent a debt crisis, which every single economist tells us is coming sooner rather than later in this country."
He said the plan went beyond the recommendations of President Obama's debt commission because they kept spending too high to significantly reduce the deficit.
Ryan's proposal reshapes the Medicare program to tackle its soaring costs. Medicare cost $396.5 billion in 2010 and is projected to rise to $502.8 billion in 2016.
"You have to address the drivers of our debt," Ryan told Fox News Sunday. "We need to engage with the American people on a fact-based budget, on stopping politicians from making empty promises to people and talk to the country about what is necessary to fix these problems."
The Republican proposal converts Medicare into a "premium support system" for Americans under the age of 55. Once they reach the eligibility age of 65, they would choose from an array of private insurance plans. The U.S. government would pay about the first $15,000 in premiums, with payment amounts varying based on participants' economic and health status. No one who is now 55 or older would be affected by the proposed changes.
Medicare currently pays most healthcare costs for 48 million elderly and disabled Americans, but politicians in both parties have said that can't continue for the government to successfully rein in spending. In order to make any progress on the budget deficit, something has to be done about entitlement programs Medicare, Medicaid and Social Security, which make up 60% of the budget.
"There is nobody saying that Medicare can stay in its current path," Ryan said. "We should not be measuring ourselves against some mythical future of Medicare that isn't sustainable."
Ryan said this plan would encourage competition among healthcare providers and keep costs down. He said his proposal was different than the voucher program heavily criticized by Democrats, and instead offers the government subsidy to the plan, not the consumer.
"It doesn't go to the person, into the marketplace," said Ryan. "It goes to the plan. More for the poor, more for people who get sick, and we don't give as much money to people who are wealthy."
The Republican budget plan also changes Medicaid into a block grant program that gives state governors more flexibility in handling the money. Medicaid is expected to cost the government $275 billion in 2011, and the Congressional Budget Office (CBO) projects that number to double by 2021.
Ryan said spending for Medicare and Medicaid will still increase each year with his plan, but at a slower rate than it does now.
The GOP plan is not expected to propose much about Social Security spending, another touchy area in Congressional budget negotiations.
People familiar with the proposal said it will call for a tax system overhaul, cutting corporate and personal taxes to a top rate of 25%, down from 35%. It also is expected to allow a temporary change for U.S. multinationals to bring home up to $1 trillion in profits currently held overseas at a reduced tax rate.
The plan also cuts discretionary spending to 2006 levels, and puts a cap on government spending relative to the size of the economy. The ratio hit 25% of gross domestic product (GDP) in 2009, and President Obama's budget proposal capped spending around 23%. Ryan said he wanted to set a cap closer to 20%.
The plan will face heated opposition from the Democrat-controlled Senate. Democrats favor tax revenue increases to reduce the budget deficit, and criticize proposals that hurt Americans relying on government aid.
"All this does is shift the risk and burden of rising health-care costs to seniors on Medicare," said Rep. Chris Van Hollen, D-MD, the top Democrat on the House Budget Committee, about the Republican budget plan. "You're on your own with the insurance industry."
The CBO said a similar Medicare plan Ryan proposed last year would lead to weaker benefits and steeper premiums.
Ryan said Democrats would likely use his proposals as a "political weapon to go against [Republicans]."
"But they will have to lie and demagogue to make that a political weapon," Ryan said.
While Republicans get ready to pass their 2012 budget proposal, they have yet to reach an agreement with Democrats over the 2011 budget and are quickly approaching the April 8 deadline.
U.S. Sen. Charles E. Schumer, D-NY, told ABC News' "This Week" that progress was being made, but he could not guarantee lawmakers would prevent a government shutdown.
Schumer has been criticized for pushing for a government shutdown since reporters overheard him last week advising colleagues to call Republican spending cuts "extreme and draconian."
"The subtext of this is, the only way we can avoid a shutdown is for (House Speaker John) Boehner to come up with a reasonable compromise and not just listen to what the Tea Party wants," Schumer said during a phone news conference, apparently unaware reporters were on the line.
The House passed a budget in February outlining $61 billion in cuts, and Democrats have said they will agree to $33 billion in cuts. But the two parties have yet to reach a deal on the amount or the areas to trim.
Democrats want Republicans to reduce spending on Agriculture, Treasury and Justice Department programs instead of discretionary accounts. Democrats argue that discretionary spending includes programs that shouldn't be cut, like tuition aid, cancer research, and veteran assistance, but Republicans are resisting.
"We want real spending cuts," House Speaker John A. Boehner, R-OH, said last week. "We are dealing with the discretionary part of the budget."
News and Related Story Links:
- NPR:
Republican Budget Makes $4 Trillion-Plus In Cuts - Fox News:
Rep. Paul Ryan Previews GOP Budget - The Wall Street Journal:
GOP Budget Aim: Cut $4 Trillion From Spending - ABC News:
Interview: Sens. Schumer, Sessions - Money Morning:
Are You Worried About a U.S. Government Shutdown? - The New York Times:
House Republicans Propose $4 Trillion in Cuts Over Decade - Fox News:
Senate Dems Pin 2012 Hopes on Budget Battle
Attackers of Ryan's plan will cite "tax cuts for the rich". True, the rich have greater disposable income, an this plan would give them even more. But would they save and invest it, or spend more on luxuries? The plan needs to be fined tuned to encourage savings. Exempt from all taxes money saved into an account , to be taxed later when it is withdrawn. Not only would this create a flood of money to invest, but it would encourage us all to save for our old age, father than become or remain dependent on entitlements like Social Security and Medicare, which like all government programs, have balooned out of sight. In short, exempt savings and watch us all put our money and our nation to work.
Will America fall victims to the Republicans again. House Budget Committee Chairman Rep. Paul D. Ryan, R-WI, is but one more Republican interested in padding the pockets of his rich friends by taking more money from the real Americans. Why would anyone listen to a Republican, they have given us the likes of "I am not a crook" Tricky Dicky Nixon, "the man credited with deregulating banking" (fast-forward to 2008) Ronald Reagan, "trim the fat" recession leader George Bush, and his son "The Great Recession" Georgey Boy Bush. Republican politicians do their best to remove regulations and lower taxes for the ultra-wealthy who steal money from the companies they run and from the American people who's taxes pay to correct the economic attrocities those greedy few have visited upon us. I say, "Fire a Republican, Hire an American!" Any politician in favor of reducing the taxes on the uber-wealthy and reducing medicare benefits for the elderly in order to "balance the budget" should be removed from office and replace by an American. Then we can tax those such as the CEO of Goldman-Sachs, who, failing to meet his fourth quarter goals, announced $Billion dollar bonuses to himself and his cronies (that's money stolen from the owners of the bank, the 401k's and pension funds of Americans). Taxing those white-collar criminals is about the only way we have left of returning some of those stolen funds to the American people. Tax the crooks and use those dollars to fund the programs designed to benefit the 95% of our population, the American People.
David, the days of the GOP being the party of the fat cats and the Dems being for the little guy are long gone. You cite Goldman-Sachs and their big bonuses as an example of greed. Check out who got the bid campaign contributions from Goldman-Sachs. Its your champion of the "averge Amaerican", BHO. Now please take a look at my earlier comment. We will all benefit from directing more money into job-creating investment. People will save more when interest earned in high, and borrow to create jobs when interest paid is low. Taxes on interest spread these two amounts apart, IN THE WRONG DIRECTION, by reducing interest earned and increasing interest paid. So eliminate the tax on interest. Is that hard to understand? It beats the Bush era idea that reducing taxes on the "fat cats" that have more left-over, or disposable income, will bring more investment. This idea favors neither fat cats nor Joe Six-packs. It favors investment from anybody, and savings as well. Then maybe we won't be as dependent on the government through entitlements.
Come on David, get with the program.
The Republicans must really think people are stupid.
This proposal of theirs simply helps a happy few get rich off Americans' tax dollars. And what will follow is very little, if any, regulatory authority over how these private health care providers administer their programs. There will be fewer Americans who have access to quality health care, and those who do have it will pay high premiums and probably be dropped as their health deteriorates.
Does no one think consumers will take better care of their own money than will bureaucrats and bought and paid for politicians? Checkout health care industry contributions in recent campaigns… for the general good, of course.
Everyone talks about cutting "entitlements". The fact of the matter is that Social Security is in good shape. What the politicians did over the years is use the money in the trust fund for their pet projects that is defense spending and useless wars. They replaced that money with IOUs. The Social Security Trust fund has been paying the freight since the Vietnam War. Now that the chickens are coming home to roost they want to default on the IOUs by telling the sheeple the system is broke. Try that trick on a foreign bond holder of US treasuries and see what that will get you.
As a matter of fact President Regan conviced the sheeple that he would fix the future shortfall by uping the retirement age for full benefits to age 67.
No one talks about defense spending. Why does the US need bases, over 7 hundred to be exact, all over the world?
Why are US troops in Japan and Germany 66 years after WWII?
What are we doing in Iraq, Afgahnistan, and now Lybia? We spend more on defense than all major industrial nations on the planet. Is the US a world empire or a republic?
Why do does the US send 5 billion in aid to Isreal every year? That amounts to $1000 for every Israeli annually. How about cutting that largess out of the budget and use the money in America where it is sorely needed.
As for reducing the taxes on the wealthy because they will create jobs that experiment has been tried now for 12 years since Bush Jr. and it hasn't worked. Been there done that!
I have read some of the comments and feel this, the GOP and big business interests want us all to pay the taxes, fight the wars, work for nothing and leave them alone so that can run the country into the ground and live the American Dream. Congressman with signs" pays my way and I will screw the people in every way possible"
Trying to end fraud, corruption, ineffeciency, collusion and incompetence in our federal government is an exercise in futility. I applaud Mr Issa actually trying to do something, but the governement is too monolithic. The only thing? that will reduce the size and services of government will be a total financial collapse; resulting in a complete restructuring of our? federal system more in keeping with the principles of the founding fathers- than the centralized Socialist behemoth we now have.
If am not wrong then i think Long Term Care, Dentures, Hearing Aids and Cosmetic Surgery are the things which does not come under the Medicare !