Paul Ryan's 2012 Budget: A Preview

Posted: Apr 04, 2011 10:02 AM
President Obama's disastrous 2012 budget ignores his own deficit commission's recommendations and adds $9.5 Trillion to an already unsustainable national debt by 2022.  The soon-to-be-unveiled GOP alternative, by contrast, is bold, politically risky, and necessary.  CNN has an excellent piece on House Budget Committee Chairman Paul Ryan's proposal, which will reportedly save more than $4 Trillion over ten years:

House Budget Chairman Paul Ryan said Sunday he will unveil a Republican budget for 2012 this week that proposes dramatic changes to Medicare, Medicaid and other political lightning rods.

The plan, to be released Tuesday, calls for a controversial overhaul of Medicare, the health care program for seniors, and would impose deep cuts in Medicaid, which provides health benefits to low-income Americans, Ryan told "Fox News Sunday."

Starting 10 years from now, in 2021, elderly Americans would receive government help in paying health insurance premiums instead of enrolling in the government-run Medicare program, Ryan said. He rejected the label of "vouchers" for the payments, calling them "premium assistance" payments instead.

The plan is modeled after one Ryan proposed last year with Alice Rivlin, budget director under President Bill Clinton.

Democrats are sure to demagogue the plan, particularly by targeting what they'll try to cast as draconian cuts in benefits to senior citizens -- which do not exist in the Ryan budget:

His proposal would only affect people younger than 55, with those 55 and older continuing to receive Medicare benefits under the existing system, Ryan said.

The proposal was intended to provide help to low-income senior citizens while requiring wealthier senior citizens to pay more for their health coverage, he said.

Do yourself a favor and memorize that underlined, italicized, bolded sentence, because Democrats will do their darndest to obfuscate this point to scare senior citizens.  Speaking of which, somewhat disappointingly, the GOP budget will not address Social Security reform -- a politically precarious endeavor that hurt Republicans in 2005.  Ryan's proposal will, however, move to simplify the tax code -- a long overdue effort:

In addition, Ryan said, his proposal would change the tax code to lower rates but eliminate some exemptions and broaden the tax base. Asked for specifics, he instead repeated the Republican mantra that the nation needed to cut spending to balance the budget and reduce deficits, not raise taxes.

Sources told CNN that the House GOP budget plan does not call for significant change to the Social Security program. Republicans argue that while Social Security is a factor in the nation's fiscal crisis, it doesn't contribute as much to the soaring debt as Medicare.  However, two House GOP lawmakers briefed on the proposal told CNN they and others on the House Budget Committee believe it's a mistake not to tackle Social Security.

The forthcoming blueprint will also reportedly slash federal discretionary spending to 2006 levels, which would make the current CR debate seem like relatively small potatoes:

As for discretionary spending, one of the sources -- who would not speak on the record before the plan is publicly announced -- said Ryan's proposal promises to roll back spending to 2006 levels. It's unclear how much that would slash, but it is expected to be far more than the roughly $61 billion in spending cuts House Republicans passed in February.

Multiple GOP sources admit the timing of Ryan's 2012 budget proposal is tricky. It will be released in the middle of down-to-the-wire, contentious negotiations with Democrats about spending for the rest of fiscal 2011.

CNN is told GOP leaders considered delaying the release of Ryan's budget until this year's spending differences are resolved.

However, they decided to go ahead with it because they hope showing major cuts and reforms planned for next year will help calm rank-and-file conservatives who are unhappy their leadership is compromising too much on spending cuts now.

That last bit, I think, is a strategic masterstroke.  The Ryan budget and the debt ceiling votes are the big ticket fights that will require enormous political courage.  The sooner a reasonable compromise on the 2011 CR is forged, the better.  The decision to release the Ryan plan ahead of the CR compromise (trust me, it's coming) should go a long way to allay conservative and Tea Party concerns that Republicans aren't serious about cutting spending.  By all accounts, the 2012 budget will be ultra serious.  Democrats know this, and are lying in wait to spring a public opinion trap by shrieking about "brutal" and "devastating" cuts.  (Remember, these are the people who think cutting 4 percent of the 2011 budget deficit is "extreme.")  In order to counter the inevitable onslaught of Democratic scare tactics, Ryan and other GOP leaders are equipping their members with the facts to explain why major, systemic changes to entitlement programs aren't just preferable, they're absolutely essential:

Ryan, along with Republican Whip Kevin McCarthy, has been holding sessions two or three times a week with House Republicans to try to arm them with facts and figures about the gravity of the debt problem and why it needs to be fixed.

CNN was allowed into one of these meetings last month, and heard Ryan lay out for his GOP colleagues in stark terms what he calls the "tidal wave" of debt the country is facing.

"The Congressional Budget Office has this economic model where they measure the economy going forward, and they are telling us that the entire economy crashes in the year 2037 because their computer simulation can't conceive of any way in which the U.S. economy can continue," Ryan told the GOP group.

Read that portion in bold again, take a deep breath, and steel yourselves for an epic battle.  The stakes, quite literally, couldn't be much higher.  I'll leave you with Chairman Ryan in his own words, from yesterday's Fox News Sunday.  Meet the face of mean-spirited, elderly-hating, cold hearted, Republican extremism: