House Budget Committee Chairman Paul Ryan unveiled a budget Tuesday that would slash federal spending by $5 trillion more than the budget President Barack Obama released last month, in large part through sweeping cuts to safety net programs.
As HuffPost's Michael McAuliff reported, Ryan's budget will never become law because Senate Democrats will not take it up. But the "Path to Prosperity," as the plan is called, draws a sharp contrast with Obama's budget and may put GOP candidates in the delicate position of siding with or against provisions of what is essentially a political document. Ryan (R-Wis.) insisted his plan won't hurt them.
Here are the basics of the Ryan budget to look out for on the campaign trail:
1. Medicare
Ryan's budget would cut Medicare by $205 billion compared to Obama's budget and would repeal the health care reform law. Seniors would have the option of switching to a government-financed “premium support” system that would allow them to buy private insurance on the open market. The government would be left to cover the sick who were rejected by private insurers. ThinkProgress reports:
The budget states that enrollees would be "guaranteed a plan that is at least the value of the traditional fee-for-service Medicare option," but private insurers could still attract a healthier population by simply ratcheting down services that sicker beneficiaries rely on (like chemotherapy) and building up coverage for healthier applicants (like preventive services). Should they succeed, traditional Medicare costs will skyrocket, forcing even more seniors out of the government program.
2. Medicaid
The Republican blueprint calls for $770 billion in cuts to Medicaid, which would be converted to a block grant program run at the state level. Medicaid is currently a matching program, which means that states receive federal funds when they add more recipients. Ryan proposes controlling costs by sending the funds for both Medicaid and food stamps as block grants and giving the states discretion over how to spend the funds -- in a provision he described as "welfare reform, round 2."
"We don't want to turn the safety net into a hammock that lulls able-bodied people ... into complacency and dependence," he said Tuesday.
3. Health Care Reform
Ryan wants to repeal President Obama's health care reform law, which he says would save $1.6 trillion.
But repealing the law would mean reinstating some $455 billion in Medicare funding, including $132 billion for Medicare Advantage companies, many of which have a history of billing the government for far more than they paid out and duping seniors into signing up for bogus services. And the Ryan plan would slash subsidies designed to help people fulfill the Affordable Care Act's requirement to purchase health insurance coverage and would leave millions of Americans uninsured. Because the Ryan budget offers no plan to control medical costs or insurance premiums, the government's health care savings would come at the expense of individuals.
4. Tax Reform
The Ryan budget would lower the top individual income tax rate from 35 percent to 25 percent. It would set just two income tax rates of 10 percent and 25 percent and a corporate rate of 25 percent. Ryan argued that the plan would be "revenue neutral" and make up for tax cuts by eliminating many deductions and loopholes.
His plan would result in $3 trillion in tax cuts for the wealthy and corporations.
5. Defense Spending
Under Ryan's budget, some of the savings from deep cuts in entitlement programs would be funneled into military spending. ThinkProgress reports:
The Ryan budget protects defense spending from automatic cuts agreed to in last year's debt deal, then boosts defense spending to $554 billion in 2013 -- $8 billion more than agreed upon in the deal. At the same time, it asks six Congressional committees to find $261 billion in cuts. That includes $33.2 billion from the Agriculture Committee, meaning food stamps and other social safety net programs are likely to face cuts, all while the Pentagon remains untouched.
Released the day of the Illinois Republican primary, Ryan's budget has already become a political lightening rod. Democrats put a mocking video online before the budget was even released. Ryan has not endorsed any of the GOP presidential candidates, but he consulted with each of them before releasing the budget, according to The Hill.
"I have spoken to all of these guys, and they believe we are going in the right direction," Ryan said.
Newt Gingrich, who slammed Ryan's "radical" budget as a piece of "right-wing social engineering" last year, has already embraced the election-year version of the plan as "courageous." Mitt Romney, Rick Santorum and Ron Paul did not immediately comment.
Here is what the GOP candidates had to say about Ryan's budget last year:
