WASHINGTON — U.S. Rep. Paul Ryan introduced the House GOP budget plan on Tuesday, kicking off a new round of budget battles on Capitol Hill.
Ryan’s budget balances in 10 years, thanks to both $4.6 trillion in spending cuts (out of $46 trillion-worth of spending over 10-year budget, he said) and by accepting the new revenue that came from January’s fiscal cliff deal.
The budget would eventually reduce federal spending to just over 19 percent of GDP, down from 22 percent under current law. That means changes to entitlement spending (the budget would block grant Medicaid to the states, for example) and discretionary spending cuts deeper than those in current law, even though it increases defense spending by about $500 billion over 10 years.
“Balancing the budget is not simply an act of arithmetic, it’s not just getting expenditures and revenues to add up,” Ryan said Tuesday. “Balancing the budget is a means to an end, it’s a means to a healthier economy, a pro-growth society, a pro-growth economy that delivers opportunity. That is first and foremost why we are doing this.”
The rest of Ryan’s budget is fairly similar to what he’s pitched — and what Democrats have rejected — in the past:
- The budget repeals the Affordable Care Act, though it keeps in place more than $700 billion in cuts to Medicare enacted under the law.
- It would make the customary structural changes to Medicare, in which the government would subsidize the premiums individuals pay for private insurance while making traditional Medicare available as an option (such a plan would begin for retirees in 2024).
- The budget would simplify the tax code by creating just two tax rates: 10 percent and 25 percent for individuals and 25 percent for corporations. Ryan said lawmakers would have to end certain tax breaks and deductions to make up for the lost revenue under these lower rates. Such tax reform would be even more difficult given the $600 billion tax hike Congress approved in January.
“The fiscal cliff occurred, but we don’t like the tax code that it produced,” Ryan said. “Therefore, we are proposing a new tax code that is more of a pro-growth tax code.”
The budget is so similar to what Ryan and the GOP have pitched over the last few years that Democrats are certain to reject it, and the budget will die soon after the GOP-controlled House passes it next week. Two other major budget frameworks, those from President Obama and from Senate Democrats, are certain to fail as well.
Some more reading on the budget:
Devin Henry can be reached at dhenry@minnpost.com. Follow him on Twitter: @dhenry