Republican congressman Paul Ryan, chairman of the House budget committee, is expected to propose his federal budget for the fiscal year 2012 on Tuesday. He appeared on Fox News Sunday two days earlier with a preview.
According to Ryan, his budget would cut spending by more than $4 trillion over the next ten years. The president’s budget, by comparison, foresees some $1.1 trillion in deficit reduction over the same period of time.
This year alone, the federal government is set to spend $1.6 trillion it doesn’t have on a budget of $3.7 trillion. Unless serious spending reductions are enacted, the Congressional Budget Office estimates that by 2021, the national debt will have swollen to equal 100 percent of GDP.
President Barack Obama’s budget was criticized by fiscal conservatives for its utter lack of entitlement reforms. The major health care and unemployment support programs account for the bulk of federal spending. Their costs are set to skyrocket in years ahead unless their scope is significantly reduced.
Ryan’s budget would transform Medicare for the elderly in a “premium support” program which subsidizes seniors’ health plan of choice.
The growth of Medicaid, the health support program for the poor, would be reduced by block granting spending to individual states, forcing them to rein in spending however they see fit. “We’ve had so much testimony from so many different governors saying, give us the freedom to customize our Medicaid programs; to tailor for our unique populations in our states,” said Ryan. The Republican plan would give them the freedom to do so.
Americans over the age of 55 would be exempt from Ryan’s proposals but he warned that unless entitlements were reformed soon, heavier austerity measures akin to those enacted in Europe would become a necessity. “Then you have cuts to current seniors, tax increases that slow down your economy,” he warned.
By addressing the drivers of the debt now, we do it in a gradual way. We can guarantee the mission of health and retirement security, not just for current generations but for future generations.
“That in and of itself will help us grow the economy today and create jobs,” the Wisconsinite added.
Ryan’s budget would further cap the growth of discretionary spending and reform the tax code. “Pro-growth tax reform is a key ingredient to getting this economy working again.” He volunteered no details but did suggest that taxes could be simplified and corporate welfare in the form of exemptions for specific industries might be cut.