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Ryan Budget Plan Aims to Roll Back Obama Agenda Ryan Budget Plan Aims to Roll Back Obama Agenda
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WASHINGTON — Four months after Republicans suffered a convincing defeat in the presidential election, Representative Paul D. Ryan of Wisconsin, the party’s vice-presidential nominee, unveiled a spending-and-tax plan on Tuesday that relies on the same lightning rod proposals of his 2012 campaign to balance the federal budget in 10 years. WASHINGTON – Senate Democrats and House Republicans on Tuesday outlined vastly different approaches to shoring up the government’s finances, illustrating their divergent fiscal strategies even as both sides insisted publicly that a bipartisan fiscal compromise was possible.
The Ryan plan — called the “Pathway to Prosperity” as it was in last year’s campaign — would cut spending by $4.6 trillion through 2023, largely by rolling back President Obama’s legislative accomplishments while also taking advantage of the savings they created. As part of that compromise effort, President Obama made a rare lunchtime appearance at a weekly gathering of Democratic senators – his first of four meetings with lawmakers on Capitol Hill this week – to explore ways that the two parties could at last overcome some of their differences over the budget and fiscal matters, which have left them bitterly divided for much of the last five years.
While the budget would preserve Medicare cuts Republicans denounced in the 2012 campaign, it would eliminate the subsidized insurance exchanges and Medicaid expansion that make up the core of the president’s health care law. Mr. Obama’s Wall Street regulatory law would be repealed, and high-speed rail programs championed by Vice President Joseph R. Biden Jr. would be rescinded. But in reality, the two parties could not be taking more different paths.
And the plan would transform Medicare into a subsidized system of private insurance plans, a proposal that Mr. Obama strongly opposed and made central to his campaign for re-election. House Republicans, led by Representative Paul D. Ryan of Wisconsin, laid out a tax and spending plan that would cut spending by $4.6 trillion through 2023, in large part by rolling back many of the president’s signature legislative accomplishments. It would repeal the health care overhaul of 2009, eliminate the subsidized insurance exchanges and Medicaid expansion that make up the core of the law, and turn Medicare into a system of private insurance plans financed by federal vouchers.
But while Mr. Ryan once held that the 2012 election would be a referendum on such ideas, he said on Tuesday that the nation’s dire fiscal straits present little alternative but to plow ahead with what he calls “an exit ramp from the current mess — and an entry ramp to a better future.” The budget will be formally drafted Wednesday in the House Budget Committee, of which Mr. Ryan is chairman, then brought to the House floor next week for what promises to be a contentious vote. The Republican proposal would also do away with Wall Street regulatory laws that Mr. Obama championed and cancel the financing his administration sought for a high-speed rail network.
At a news conference on Tuesday morning in the Capitol, Mr. Ryan was asked why his plan included so many elements that voters appeared to reject in November when they elected Mr. Obama over the Romney-Ryan ticket. Senate Democrats, meanwhile, were moving forward with a budget they planned to start debating on Wednesday. In their meeting with Mr. Obama, which lasted more than an hour, several senators said they expressed concerns about cuts in popular entitlement programs like Social Security. And in their budget they plan to exclude changes Mr. Obama has said should be left on the table, like an adjustment to how the inflation rate is calculated that would reduce certain federal retirement benefits.
“So the question is,” Mr. Ryan responded, “the election didn’t go our way — believe me I, I know what that feels like — that means we surrender our principles? That means we stop believing in what we believe in?” In stark contrast to the austerity measures and dismantling of top Obama administration priorities that are included in the Republican plan, the Democrats’ budget went in the opposite direction.
He continued, “We think we owe the country a balanced budget. We think we owe the country solutions to the big problems that are plaguing our nation: a debt crisis on the horizon, a slow-growing economy, people trapped in poverty. We’re showing our answers.” Their proposal would create a $100 billion economic stimulus initiative for job training and repair to roads and bridges, projects that Democrats say they would pay for by closing loopholes in the tax code that benefit large corporations and wealthy individuals. All told, Democrats believe they can save nearly $1 trillion through such tax reform.
Such dire forecasts are not universally held. Many liberal economists believe the tax increases secured in January and trillions of dollars in budget cuts over the past two years have already put the government on a sustainable path at least through this decade. They would save $1 trillion more by trimming spending, with a quarter of those cuts coming from the military.
But with his budget — and a Senate Democratic budget to follow Wednesday — Republicans and Democrats are setting up a clear contrast between rapid deficit reduction that relies on spending cuts only to reach balance and a slower approach that will mix tax increases and more gradual spending cuts to aim for fiscal stability if not a balanced budget. As lawmakers began their budget deliberations, a stopgap measure to finance the government after the end of the month ran into trouble in the Senate as Tom Coburn of Oklahoma and John McCain of Arizona, both Republicans, raised objections to what they called wasteful pork-barrel spending even as the government was trying to absorb $85 billion in cuts.
Democrats said the Republican budget was further proof that Republicans were out-of-touch with ordinary Americans, who already delivered their verdict on the Ryan plan. Democrats immediately seized on the Republican budget as a sign that the party had failed to heed the lessons of the 2012 elections, which denied conservatives the presidency and cut their ranks in both houses of Congress.
“This budget reflects the same skewed priorities the Republican Party has championed for years — the same skewed priorities Americans rejected in November,” Senator Harry Reid, the majority leader, said in remarks on the Senate floor on Tuesday. “We’ve seen this show before.” “This budget reflects the same skewed priorities the Republican Party has championed for years — the same skewed priorities Americans rejected in November,” Senator Harry Reid of Nevada, the majority leader, said in remarks on the Senate floor on Tuesday. “We’ve seen this show before.”
Senate Democrats on Tuesday were already starting to circulate the outlines of their budget, a plan that repudiates many key aspects of the Republican effort, like converting Medicare into a private insurance plan. Senator Patty Murray, Democrat of Washington and the chairwoman of the Senate Budget Committee, said that the House Republican plan was “doubling down on the extreme budget that the American people already rejected.” Mr. Ryan, who was the Republican vice-presidential nominee last year and whose budget became a lightning rod of liberal criticism for its steep cuts to domestic programs, said the election results would not persuade Republicans to give up the fiscal fight.
In stark contrast to the austerity the Republican budget pursues, Senate Democrats will propose investing $100 billion in a new economic stimulus program that would provide job training and set aside money to repair roads and bridges. Democrats said they would pay for the plan by closing loopholes in the tax code that benefit corporations and wealthy Americans. “The election didn’t go our way — believe me I, I know what that feels like,” Mr. Ryan said at a news conference during which he was asked repeatedly why his party was doubling down on proposals that the American people appeared to reject when they voted for Mr. Obama over him and Mitt Romney in November.
The Democrats’ plan would meet their goals with an equal mix of deficit reduction through spending cuts and closing tax loopholes. Those cuts — about $975 billion worth — would include $240 billion in military spending and $493 billion on the domestic side, Democrats said. “That means we surrender our principles? That means we stop believing in what we believe in?” he said, continuing: “We think we owe the country a balanced budget. We think we owe the country solutions to the big problems that are plaguing our nation: a debt crisis on the horizon, a slow-growing economy, people trapped in poverty. We’re showing our answers.”
Notably, the plan will also include special fast-track instructions known as reconciliation that would ensure it could not be filibustered, meaning that Democrats would only have to come up with a simple majority of 51 votes instead of the 60 often required to pass legislation in the Senate.
Mr. Ryan, using trademark partisan barbs at the president and lofty statements of principle, would do with this plan what he did not in his first two: Produce a small budget surplus by the last year of the 10-year budget window. The deficit would fall to $528 billion in fiscal 2014, down modestly from the $616 billion deficit forecast last month by the Congressional Budget Office.Mr. Ryan, using trademark partisan barbs at the president and lofty statements of principle, would do with this plan what he did not in his first two: Produce a small budget surplus by the last year of the 10-year budget window. The deficit would fall to $528 billion in fiscal 2014, down modestly from the $616 billion deficit forecast last month by the Congressional Budget Office.
From there, the deficit’s drop would be steeper; it is projected to be $125 billion in 2015 and $69 billion in 2016, with a $7 billion surplus in 2023.From there, the deficit’s drop would be steeper; it is projected to be $125 billion in 2015 and $69 billion in 2016, with a $7 billion surplus in 2023.
To do it, the budget assumes $1.8 trillion in savings with the repeal of the subsidized insurance exchanges and Medicaid expansion in the president’s Affordable Care Act over 10 years. Medicaid would be cut an additional $756 billion, by turning it into block grants to the states with limited growth. Other so-called mandatory programs — not subject to Congress’s annual discretion — would be cut $962 billion. States would be allowed to put time and access limits on food stamps, for instance, and agricultural subsidies would be cut by $31 billion.To do it, the budget assumes $1.8 trillion in savings with the repeal of the subsidized insurance exchanges and Medicaid expansion in the president’s Affordable Care Act over 10 years. Medicaid would be cut an additional $756 billion, by turning it into block grants to the states with limited growth. Other so-called mandatory programs — not subject to Congress’s annual discretion — would be cut $962 billion. States would be allowed to put time and access limits on food stamps, for instance, and agricultural subsidies would be cut by $31 billion.
Discretionary programs, already squeezed by caps imposed in 2011 and automatic “sequestration” cuts that went into force this month, would be cut another $249 billion. But because military spending would be allowed to rise $500 billion over the current spending caps through 2023, the cuts to domestic programs could be deep. The budget assumes a 10-percent reduction in the federal work force by 2015.Discretionary programs, already squeezed by caps imposed in 2011 and automatic “sequestration” cuts that went into force this month, would be cut another $249 billion. But because military spending would be allowed to rise $500 billion over the current spending caps through 2023, the cuts to domestic programs could be deep. The budget assumes a 10-percent reduction in the federal work force by 2015.
Pell grants, a popular federal higher-education aid program, would be capped at the current level of $5,645 for 10 years. And federal education and job-training programs would be consolidated.Pell grants, a popular federal higher-education aid program, would be capped at the current level of $5,645 for 10 years. And federal education and job-training programs would be consolidated.
Bowing to pressure from Republican moderates and House leaders, Mr. Ryan did scrap plans to implement his Medicare program sooner, again protecting anyone 55 and over from fundamental changes to the health care insurance program for the elderly.Bowing to pressure from Republican moderates and House leaders, Mr. Ryan did scrap plans to implement his Medicare program sooner, again protecting anyone 55 and over from fundamental changes to the health care insurance program for the elderly.
The budget, like last year’s, calls for a dramatically simplified tax system aimed at producing just two tax brackets, 10 percent and 25 percent. But because the top rate jumped in January from 35 percent to 39.6 percent, the drop in marginal tax rates for families with incomes over $400,000 would be even more dramatic than last year. Under the Ryan plan, the corporate tax rate would also fall, from 35 percent to 25 percent — although all those tax changes are supposed to be crafted to bring in the same amount of revenue as the current tax code, a tall order.The budget, like last year’s, calls for a dramatically simplified tax system aimed at producing just two tax brackets, 10 percent and 25 percent. But because the top rate jumped in January from 35 percent to 39.6 percent, the drop in marginal tax rates for families with incomes over $400,000 would be even more dramatic than last year. Under the Ryan plan, the corporate tax rate would also fall, from 35 percent to 25 percent — although all those tax changes are supposed to be crafted to bring in the same amount of revenue as the current tax code, a tall order.
Mr. Ryan framed these proposals in moral terms, saying his budget “recognizes that people do not find happiness in grim isolation or by government fiat. They find it through friendship — through free, vibrant exchange with the people around them. They find it through achievement. They find it in their families and neighborhoods, their places of worship and youth groups. They find it in a healthy mix of self-fulfillment and belonging.”Mr. Ryan framed these proposals in moral terms, saying his budget “recognizes that people do not find happiness in grim isolation or by government fiat. They find it through friendship — through free, vibrant exchange with the people around them. They find it through achievement. They find it in their families and neighborhoods, their places of worship and youth groups. They find it in a healthy mix of self-fulfillment and belonging.”
But Democrats are not likely to see it that way. On Monday, even before the details were out, the Democratic Senatorial Campaign Committee took aim at House Republicans who are expected to vote for the plan next week, then run for the Senate next year.But Democrats are not likely to see it that way. On Monday, even before the details were out, the Democratic Senatorial Campaign Committee took aim at House Republicans who are expected to vote for the plan next week, then run for the Senate next year.
“Really, this is the first in several steps to hold Republicans accountable on the air, on the ground, in the mail and online,” promised Guy Cecil, the group’s executive director.“Really, this is the first in several steps to hold Republicans accountable on the air, on the ground, in the mail and online,” promised Guy Cecil, the group’s executive director.

Jeremy W. Peters contributed reporting.

Jeremy W. Peters contributed reporting.