WASHINGTON -- Rep. Paul Ryan, the Republican chairman of the House Budget Committee, unveiled his latest plan to slash spending Tuesday, returning to his controversial proposal to cut Medicare in part by privatizing the system that provides health care to the elderly.
His budget plan -- which Congress will not enact, but which offers an election-year blueprint for the GOP to tout as evidence of fiscal responsibility -- would set just two income tax rates of 10 percent and 25 percent and a corporate rate of 25 percent, while eliminating many deductions and loopholes. Ryan promised the tax reforms would be "revenue neutral."
But the flash point is likely to be the Wisconsin lawmaker's proposal to begin offering retirees the option of switching to a privatized Medicare system in which beneficiaries receive "premium support" from the government permitting them to buy insurance on the open market. Democrats hammered that proposal last year as ending Medicare as we know it. Ryan cast it as saving the program and controlling costs through competition.
"We propose to save and strengthen Medicare by taking the power away from bureaucrats," said Ryan as he rolled out his proposal Tuesday on Capitol Hill. "We believe competition and choice should be the way forward."
Ryan's budget would cut Medicare by $205 billion compared to President Barack Obama's budget, according to the documents he handed out.
"A Republican budget to end Medicare is a Republican budget to end Medicare, no matter what you call it," said Eddie Vale, a spokesman with the Democrat-aligned Protect Your Care. "Paul Ryan can claim a tweak here or a tweak there from his last budget that ended Medicare. He can try to latch onto a new co-sponsor. But no window dressing can change the fact that, at its heart, his budget is a plan to end Medicare by ending the way the program has worked successfully for decades and throwing seniors out onto the mercy of the private insurance companies."
Also likely to generate opposition are plans to to dramatically cut other safety net programs, including food stamps and Medicaid, both of which would be converted to block grant programs that would be run at the discretion of individual states. Medicaid would lose $770 billion compared to Obama's budget, according to Ryan's documents.
"The 1996 welfare reform was very successful in getting toward an upward-mobile society, in getting people off of dependency and on to lives of self-sufficiency," Ryan said Tuesday.
"We propose welfare reform, round 2," he added, charging that aid programs were encouraging people to sponge off the government. "We don't want to turn the safety net into a hammock that lulls able-bodied people ... into complacency and dependence."
Another major component of Ryan's plan is repeal of the health care reform law, which he asserts would save $1.6 trillion.
Ryan's plan aims to cut the federal budget by $5 trillion more than the plan released by Obama last month. Ryan also argued that although the Congressional Budget Office did not conclude that his plan would balance the federal budget soon, it actually would because his tax cuts would spur the economy.
"We also propose, as one of our hallmark issues to get to economic growth and job creation, to reform the tax system," Ryan argued.
His plan will never become law because the Democratic-controlled Senate will not take it up. Senate Budget Committee Chairman Kent Conrad (D-N.D.) said Tuesday that Congress had already passed a budget, in effect, by passing last year's deal to raise the debt limit and cut spending.
"I want to emphasize that we do have a budget," Conrad said in a news conference just before Ryan's.
"Those who say we do not have a budget have either failed to pay attention to what they voted on, or they are deliberately trying to mislead the public," Conrad said. "The Budget Control Act was passed by the House of Representatives. It was passed by the United States Senate on an overwhelming bipartisan vote. It was signed into law by the president. It is now the law of the land. And it established the key components of the budget for both 2012 and 2013."
That leaves Ryan's plan as essentially a political document, which he insisted will not be a drag on his party's members in next fall's elections.
"I think all of our candidates have campaigned on these various ideas," Ryan said, mentioning in particular whichever candidate emerges from the GOP presidential primary. "Our nominee owes it to the country to give them a choice of two futures. We're helping him do that."
Ryan said the choice on President Obama's side was a path toward "debt and decline,' while on the Republicans' side it was a path of growth.
Democrats began to exploit the political minuses of the plan even before Ryan released it, putting a video online that mocked the GOP's "Young Guns" campaign effort to promote many of 2010's first-time congressional winners.
"Coming to a theater near you: Young Guns 2 - The Return of Coupon Care," says the spot done by the Democrat-linked Americans United for Change. "They're back and less popular than ever... Paul Ryan -- a.k.a. The Medicare Mangler. a.k.a. The Safety Net Shredder. a.k.a. The Badger State Benefit Bandit. And Eric Cantor -- the Congressman who still sleeps at his old GW frat house."
Michael McAuliff covers Congress and politics for The Huffington Post. Talk to him on Facebook.
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