Rep. Ryan unveils GOP's $4.6T plan to cut the deficit

Susan Davis, USA TODAY | USATODAY

Show Caption Hide Caption Paul Ryan unveils House budget plan House Budget Committee chairman Paul Ryan unveiled a budget Tuesday that he says balances the budget in 10 years. Ryan invited President Barack Obama and Senate Democrats to come together and put forth their ideas on how to balance the budget. (Marc

House GOP budget would balance spending and revenue in 10 years

Blueprint calls for a full repeal of President Obama%27s health care law

Plan changes Medicare for future retirees

WASHINGTON — House Republicans unveiled a budget Tuesday that would balance the nation's books in 10 years without raising taxes but by eliminating President Obama's health care law, revamping Medicare for future retirees and creating just two tax brackets for individuals -- 10% and 25%.

By cutting $4.6 trillion in current spending over the next decade, the budget would achieve balance between what the government spends and what it collects in revenues by 2023.

"For the third straight year, we've delivered," House Budget Committee Chairman Paul Ryan, R-Wis., said Tuesday at a news conference. Since taking control of the House in 2010, the GOP has approved a budget each year. The House is scheduled to approve Ryan's budget next week. The GOP budget is non-binding and does not have the force of law, but it serves as a philosophical document on the party's views on the size and role of the federal government.

The conservative blueprint stands no chance of gaining traction with Senate Democrats or Obama, but the plan is a starting point for renewed debate about how to balance the budget. Senate Democrats, for the first time since 2009, will unveil a competing budget Wednesday.

Senate Democrats will call for raising $1 trillion in new revenues while cutting $1 trillion in federal spending, but they have not offered any specifics ahead of Wednesday's release. Senate Budget Committee Chairwoman Patty Murray, D-Wash., will preview the budget to her Senate Democratic colleagues at a Tuesday meeting that Obama is scheduled to attend on Capitol Hill. The 50/50 ratio of taxes to cuts is on par with the president's call for "a balanced approach" for deficit reduction.

Key elements of the GOP budget include:

A balanced budget achieved in a decade by not allowing the government to spend more than it collects in revenue, which Republicans set at 19.1% of gross domestic product. By their measure, the federal government will spend $4.6 trillion less over the next decade that the government is currently on track to spend.

A 3.4% annual increase in spending each year, but Republicans estimate the economy will grow by a faster margin to help balance the books.

Cuts the growth of the public debt to an estimated $14.2 trillion by 2023 instead of the nearly $20 trillion estimated by the non-partisan Congressional Budget Office.

Authorizes construction of the 1,700-mile Keystone XL oil pipeline and estimates it would create 20,000 new jobs.

A full repeal of Obama's health care law.

Support for new laws to limit medical malpractice liabilities.

A fundamental overhaul of the Medicare system for future retirees. Starting in 2024, seniors would be given a federal subsidy to purchase health care from the private market, instead of the guaranteed benefit system that currently exists. It also calls for wealthy seniors to pay more for premiums.

Ryan's plan also keeps in place $716 billion in Medicare cuts in payments to providers included in the president's health care law to achieve balance. As a vice presidential candidate in 2012, Ryan opposed these cuts and attacked Obama for it in his convention speech.

A transfer of power to states to determine how Medicaid and other funds should be spent on programs, including food stamps.

An increase in defense spending over current law.

A plan to transform the tax code to simplify it from seven individual tax brackets to two, as well as a repeal of the Alternative Minimum Tax.

A 25% corporate tax rate.

A requirement that the president and Congress offer respective proposals for the long-term solvency of Social Security.

The outline is similar to the two previous budgets offered by House Republicans. Ryan acknowledged that their Medicare proposal is politically sensitive.

"The other side will demagogue this issue. But remember: Anyone who attacks our Medicare proposal without offering a credible alternative is complicit in the program's demise," he wrote in a column published in Tuesday's Wall Street Journal.

In a statement, the White House criticized the Ryan plan as one that would disproportionately hurt the middle class and protect the wealthy. The White House also made clear they would oppose Ryan's Medicare overhaul. "This budget would turn Medicare into a voucher program undercutting the guaranteed benefits that seniors have earned and forcing them to pay thousands more out of their own pockets," they said. "The president still believes it is the wrong course for America."

Senate Democrats are likewise on track to vote on their budget next week. The president has not yet sent his budget request to Congress. It is not expected until early April.

The two chambers are unlikely to reconcile the competing budget plans, but approval in the House and Senate by April 15 will ensure that lawmakers can still collect their paychecks.

A law passed earlier this year mandated that lawmakers approve a budget by the April deadline or their salaries would be held in escrow until a budget was passed or the current Congress ended in January 2015.