Ryan: “We Want to Avoid a Debt Crisis”
The Republican chairman of the House budget committee says his spending plan would levy taxes “in a fairer way.”
Wisconsin congressman Paul Ryan defended the Republicans’ deficit reduction plan on Sunday which would slice $5.3 trillion from President Barack Obama’s budget over the coming decade through tax reforms and sweeping program cuts.
“We have the most predictable economic crisis, a debt crisis, coming in the country and to ignore it is wrong,” Ryan said during an appearance on CBS News’ morning talk show Face the Nation.
The Republican chairman of the House budget committee accused the president of making the situation “worse” and pointed out that the United States Senate “hasn’t passed a budget for a thousand days. They’re not even trying to solve this problem,” he lamented.
The Republican proposal, which Ryan authored and presidential candidate Mitt Romney endorsed last week, aims to shrink the deficit by more than $3 trillion over the next ten years.
Ryan introduced a similar budget last year which was lambasted by Democrats in Congress and the White House because it would have privatized federal health support for seniors while reducing the tax burden on businesses and high-income earners.
Nancy Pelosi, the Democratic leader in the House of Representatives, said that she would not “reduce the deficit or subsidize tax cuts for the rich on the backs of America’s seniors and working families.”
The president complained that the Republican approach would leave seniors “at the mercy of the insurance industry.” He proposed to “strengthen” the Medicare program instead by empowering an advisory board to achieve $100 billion in savings over the same period that Medicare costs are projected by the Congressional Budget Office to increase by $300 billion.
The Medicare trust fund is expected to fall into deficit in 2024. $100 billion in short-term cuts without fundamental reform of the program would only delay its inevitable collapse.
Ryan on Sunday said that he wanted to “get rid of the board and put fifteen million seniors in charge of their own Medicare instead of having these fifteen bureaucrats make those decisions.”
Even if his latest proposal allows retirees to stay on Medicare while offering them the option of a subsidy to buy private health insurance, Democrats have characterized Ryan’s plan as an attack on seniors again.
Vice President Joe Biden on Friday urged retirees in the state of Florida, which could prove critical in determining the outcome of November’s presidential election, to look into their “hearts” and ask themselves, “who do you believe is genuinely committed to preserving the dignity of people in terms of their health care and their basic, basic ability to live?”
For all the condemnations of Ryan’s plan, he would have the federal government spend nearly $4.9 trillion in 2022 which is just 13 percent less than the president’s proposed spending that year. That is compared to over $3.6 trillion in federal outlays this year.
As a share of gross domestic product, Ryan’s budget would trim outlays from more than 23 percent this year to just under 20 percent in 2022.
Neither the president’s plan nor Ryan’s actually balances the budget over the next decade.
Ryan does not propose reform of the Social Security system which pays pensions for seniors (even if the program’s trust fund is projected to be depleted between 2036 and 2040) but does call for decentralization of Medicaid which finances health care for the poor. Republicans would block grant Medicaid payments to state governments and enable them to rein in costs however they see fit.
Personal tax rates for high-income earners would be reduced from 35 to 25 percent in order to stir investment and job growth. As Ryan points out, eight out of ten small businesses in America file their tax returns as individuals. A tax increase, which President Obama supports for people making over $1 million per year, would impede their ability to expand, according to Republicans.
Ryan on Sunday argued that he would simultaneously clean up the tax code by removing exemptions and loopholes and “bring at least as much revenue into the government as we’re bringing in now but in a fairer way so everyone pays the same tax rate when they make the same amount of money instead of picking winners and losers in Washington.”