Quick take: Ryan/GOP Budget Breakdown
April 5th, 2011
11:21 AM ET
3 years ago

Quick take: Ryan/GOP Budget Breakdown

Capitol Hill (CNN) – Here it is folks. The American Sauce easy-to-scan bullet points, from my reading of the 78-page ten-year plan from House Budget chief Paul Ryan, R-Wisconsin. Add comments below.

This is important stuff. (Duh.):

Deficit Cuts

- Ryan cuts $5.8 Trillion in government spending over the next ten years, relative to current policy path. It is a cut of $6.2 Trillion relative to the Obama budget.

Balancing The Budget

- Ryan balances the budget by the late 2030s. The government would run deficits until then. Surpluses are forecast to start 2040

- Obama comparison: The Obama budget looks at a ten-year timeline only and because of that, does not indicate the specific future year when his budget would reach balance. Experts debate the usefulness and accuracy of long-range timelines.
“Primary Balance”

- Ryan achieves “primary balance” by 2015. That means revenues equal outlays except for interest on the national debt.

- Obama comparison: Obama comparison: The White House initially said the Obama budget reaches primary balance in the next ten years but the CBO indicates it does not reach primary balance in that timeframe.

Debt

- The Ryan plan says it would cut the debt in half, relative to where it is now, by 2050.

- Obama comparison: Again, the Obama budget does not issue forecasts beyond a ten-year window. It is not clear when his proposal would start to decrease the national debt. Additionally, the president has indicated that while there is no entitlement reform in his budget, he wants to address it directly with Republicans.

Next Year

- Ryan would cut $3.5 Trillion in federal spending. (Obama budget cut $3.7 Trillion)

- Estimates $2.5 Trillion in increased revenue.

- So, cuts deficit to estimate of just under $1 Trillion.

Big Policy Changes

- Ends current Medicare system, replaces with a “premium support” version of Medicare starting 2022. See below.

- Begins significant tax reform, cutting corporate rate and top individual rate from 35% to 25%

- Assumes elimination of the Affordable Care Act or new health care law.

- Ends some subsidies to farmers.

- Makes Medicaid and the SNAP (food stamp) program block grants to states. Caps funding for each (subject to inflation, population).

- Cuts Pell grants to 2008 levels.

Cuts/Pay Freezes

- Cuts discretionary spending to “well below” 2008 levels.

- Targets “hundreds of government programs that have outlived their usefulness”.

- Freezes pay for federal workers for five years.

- Would cut 10% of federal workforce over three years, through attrition.

Earmarks

- Would extend ban on earmarks another year, through FY 2012.

Tax Reform

- Cut top individual rate from 35% to 25%

- Consolidate all six individual tax brackets. (Waiting for more specifics on that, folks.)

- Cut corp. tax rate from 35% to 25%.

- At same time end or reduce many deductions and loopholes for individuals and corporations. (Also waiting.)

- Note: Ryan would extend the Bush tax cuts and the AMT patch.

Medicare

- Starting in 2022, a new Medicare system goes in place.

- New beneficiaries would chose from a number of private health care plans offered through Medicare and guaranteed by the Feds.

- The federal government would directly send those programs a “premium support” payment for each individual who signs up.

- Ryan’s summary describes it as similar to the “Medicare prescription drug program”.

- Means tested: It would give lower subsidies (higher “premium support” payments) to wealthier Americans and provide money to lower-income people to help with out-of-pocket costs.

- Unanswered/Unclear: How much in additional premiums Americans would have to pay for various privatized Medicare plans.

Social Security

- This is a punt with a game plan.

- Ryan says his proposal would “force policymakers to come to the table” and “move the conversation”.

- He would require the president to submit a plan to put Social Security. in balance if it is declared unsustainable. It does not seem to require Congressional action on such a plan.


Filed under: American Sauce • Budget • Government Shutdown • Paul Ryan
soundoff (97 Responses)
  1. Tulsa

    BC000469
    So if a family of 4 is making 20,000 a year, how much do they get back? Howe much does it take to pay for school, food, chlothes, ets? can YOU make it on less? Then why don't you?
    Why don't you give more if you can afford it?
    I would bet the poor work harder than you do.
    I bet you call yourself a "Christian" too, don't you?
    Typical republican hypocrite.

    April 5, 2011 01:11 pm at 1:11 pm |
  2. Concerned

    I feel sorry for this country. I see alot of comments and very little understanding of how dire the situation is. For those who 'complain' about the 'tax cut' proposed in this plan i have a quote–"i pay less in taxes then my secretary"–

    That quote comes from none other than billionare Warren Buffett. Posts here cry about cutting taxes for the rich without any prior knowledge of how little they pay under the current tax code. IF Ryans proposal (and i said IF) does in fact close a majority of the loopholes that the 'rich' (people and businesses) currently use to pay NO taxes, then he will in fact have 'raised' taxes on the rich/corporations by preventing them from using the current loopholes to avoid paying taxes AT ALL.

    Both repubs and dems have allowed the rich/corporations to use tax law/loopholes to their advantage (remember obama/pelosi/reid have controlled everything for 2 yrs). So they are both to blame for the "rich" getting away with using those loopholes to not pay anything (despite a 35% tax rate or higher under the current tax code).

    Perhaps if people did a little more research and relied a little less on party politics/talking points from either side of aisle you would see just how corrupt/incompetent both political parties have become.

    April 5, 2011 01:13 pm at 1:13 pm |
  3. SoccerFan

    This may have been asked.... but does the "Freezes pay for federal workers for five years" include people like Mr Ryan?

    April 5, 2011 01:13 pm at 1:13 pm |
  4. lynell

    My comment is to the CNN anchors who are in a race to the bottom, the last time I checked, the Health Care reform bill which was signed into law was not entitled "Obamacare", yet you hear that over and over again, not from the talking heads who thinks opinion is fact, but from the so-called impartial reporters. Seriously??? How about asking Paul Ryan or other members of Congress difficult questions instead of simply saying yes to whatever they tell you? better yet, how about analyzing what they tell you and finding out the facts? yes it is so much better to eliminate a public option like Medicare, and tell seniors that they should compete for the business of the private insurance co. who gives gobs of money to members of congress.

    April 5, 2011 01:14 pm at 1:14 pm |
  5. Joe

    Setting a long term budget is idiotic. Does anyone really think a budget will last that long without being amended over and over by future congresses? Similarly, putting a voucher system in place for Medicare is pointless. Once voters get angry because their vouchers won't cover their private insurance premiums, Congress will pass extensions adding to these vouchers, completely defeating the original efforts of Paul's plan. Don't believe me? Look up a system called Medicare Advantage.

    April 5, 2011 01:16 pm at 1:16 pm |
  6. Gill Baba

    I believe we should cut our coat according to our size, but we should also remember that America is a big country, a big size country requires an adequate coat to cover its size. It is economically stupid to keep cutting revenue (tax cut) in other to reduce deficits. If this spending cut continues without tax increase U.S will collapse like a 300lbs fat boy that wants to loose 150 lbs in one month. A debtor that refuse to do two or three jobs to pay his debt but insist on cutting back on his groceries to pay his debt will die!

    April 5, 2011 01:16 pm at 1:16 pm |
  7. jim

    I understand that tough cuts have to be made, but how can you justify cutting all these programs for people in the middle to lower classes, then give tax breaks to corporations and the wealthy? Warren Buffet said his companies paid the least amount in taxes in 2010 then they ever have, 17% I believe was the number of what they actually paid. When they are taxed 35% and only pay 17% and your not specific on the loopholes that your going to pull out is ridiculous.

    Both sides of the house should be ashamed that they don't realize cuts and tax increases have to be made, but this is a blatant attack on the middle and lower class. How do these people get elected when they do not care about anybody but the top 2% of people in this country.

    April 5, 2011 01:19 pm at 1:19 pm |
  8. Rick McDaniel

    NO........reducing the top tax rate to 25% is simply the Congress trying to pay themselves with a tax break. NOT ACCEPTABLE, in any way!

    The wealthy have gotten more than enough tax breaks over the last decade. Time for that to stop.

    April 5, 2011 01:20 pm at 1:20 pm |
  9. lynell

    Why doesn't anyone ask these "policy makers" in congress to show proof that the "job creators" who pay no taxes, actually created jobs in the US? that is the line that the GOP continue to repeat and no one challenge them on it. In 2008 when the economy went bust, the so called "job-creators" had a tax cut which the GOP passed without paying for and thousands of jobs were lost, not created.

    April 5, 2011 01:21 pm at 1:21 pm |
  10. GOP = Greed Over People

    Do any of you really think the same GOP that starts wars for profit off the coffins of young Americans, will care if the young and the old die because there is no "safety net' formally know as Medicaid or WIC to save them?

    April 5, 2011 01:21 pm at 1:21 pm |
  11. Dan J

    Wow, talk about selective interpretation! People are reading the tax cuts for the wealthy and barking about it. They fails to notice the next line, where he eliminates all the tax loopholes, thus making the rich and the big corporations actually pay MORE overall!

    But here's a lesson in economics 101: The less the big corporations have to pay in taxes, the more money and spending power they have, and the more they gorw. Which means that they hire more, and pay better. It's a simple concept for anyone with a basic grasp of economics, or anyone over the age of 12.

    April 5, 2011 01:22 pm at 1:22 pm |
  12. Rudy NYC

    This plan is the raw and uncut version of the Bush plan introduced 10 years ago. This plan promises to balance the budget in 20/30 years, which would begin to pay down the deficit.

    The Bush plan started with a balanced budget, and we were paying down the deficit. The Bush plan promised to pay off the deficit in 10 years time. We would all be living comfortably, with higher paying jobs, better health. Paradise.

    Mr. Ryan makes no claim on Paradise. The deficits and budgets are serious business. VERY serious, and accelerating. I will credit Mr. Ryan with being bold enough to present a budget, which unfortunately for the future will be just as forcefully rejected by Democrats as much of the Bush proposals were a decade ago.

    Hey, it is a start. He started with the wrong foot forward, but it is a start.

    April 5, 2011 01:23 pm at 1:23 pm |
  13. Nardfather in San Diego

    There is nothing new here, the usual out of the GOP playbook. I do agree there need to be cuts but lower the tax rates with the cuts will not help. You have to cut money going out and increase money coming in to balance the budget. Also, didn't the republicans run on a job creation platform? They have done zero to create jobs so far

    April 5, 2011 01:25 pm at 1:25 pm |
  14. ACE

    This novice, this rube wants to balance the budget on the back of every poor American.Yet ther is no mention of an increase in taxes.What is wrong with these heartless Rethuglicans, are they looking for a class war.

    April 5, 2011 01:25 pm at 1:25 pm |
  15. Charlie

    I seriously question Ryan's educational and intellectual worth. Not one word said about cutting a defense budget that is SIX times what the rest of the world combined spends. Is U.S. doomed to be a second tier country? Other developed countries with financial probs seem to be able to take care of the sick and poor, but according to Repubs we're ALWAYS broke until they have the checkbook. Real brave attacking the weak and defenseless, but let one of the Koch bros walk in the room and Repubs are scared poopless.

    April 5, 2011 01:28 pm at 1:28 pm |
  16. johnRJ08

    Ryan's assault on Medicare makes no sense. Medicare is one of the most efficient medical coverage plans in the world and operates on just 4% overhead. Yet, his plan would give fixed amount vouchers to citizens and expect them to get the coverage they need from private insurance companies, which remain free to gouge policyholders and deny claims with impunity. The voucher system is a card trick designed to give the appearance that people are being helped when, in actual fact, they will have significantly worse coverage of their medical costs.

    Not that Ryan's budgets eliminates numerous programs which HE deems unnecessary, provides no incentives for development of alternate energy development. He leaves the oil company subsidies intact and provides zero details about the corporate and individual tax loopholes he would eliminate. Those, of course, are key whether or not the wealthy will continue to have ways to shelter and hide their income in order to avoid taxes.

    April 5, 2011 01:30 pm at 1:30 pm |
  17. Larry L

    I thought the Republicans tended to get guidance from their Christian values... Would Jesus create a system where only the families of the wealthy could obtain good health care? I'm thinking if Jesus was around he'd be a Democrat.

    April 5, 2011 01:31 pm at 1:31 pm |
  18. emma

    Ryan's proposal to privatize Social security for people under 55 sets up a situation that would limit health care payments to those who pay into it when private companies do not make enough profit. I am assuming Ryan and his cohorts do not want such a thing to be regulated in any way.

    April 5, 2011 01:36 pm at 1:36 pm |
  19. Vic of New York

    So, by 2050 the budget will be balanced? Assuming I'm still alive (unlikely), how does Mr Ryan assure Americans that Republicans won't give us another "Bush/Cheeney" booby prize?

    April 5, 2011 01:37 pm at 1:37 pm |
  20. Roscoe

    No cuts to military spending? Does Michele Bachman lose her farm subsidies? Does it eliminate or cut down on Congressional health care costs?

    If we're going to be serious about balancing the budget, the military spending has to be cut. If we're going to cut the health care coverage for Americans, Congress has to share the pain.

    April 5, 2011 01:38 pm at 1:38 pm |
  21. Vic of New York

    BTW.... hey, "A real American" stop lying you are really from Nigeria. No real Amirican could possibly be so brain dead. Oh, wait a second, your "Republican"! Never mind.

    April 5, 2011 01:39 pm at 1:39 pm |
  22. notfooledbydistractions

    I suppose the poor, elderly and middle class will just disappear, right? Who is going to pay for all the tax cuts for the top 2%. the rich get richer and the rest of us just fade into oblivion. The US will look more like Haiti or Somalia than the US

    April 5, 2011 01:40 pm at 1:40 pm |
  23. aaron in MN

    The deficit is because of Republicans. Reagan ran it up, Bush 1 ran it up and so did Bush 2. Why do no republicans remember Clinton gave us a surplus when he left office. Republicans run up the deficit through war with all of that money going to military contractors. Dems might be tax and spend but at least spending stimulates the economy where as tax breaks is throwing away almost 60 cents on the dollar. What stimulates the economy, payroll tax holiday(only tax break that stimulates), infastructure spending, state aid and food stamps. TAX BREAKS DO NOT CREATE JOBS. THEY DO NOT DISTRIBUTE THE WEALTH EQUALLY. guess what the tax rate was during the 1920s? 25%! What happened, we had the Great Depression and we had the largest income inequality in the history of this country. this plan is going to break the middle/poor class. It does nothing to stop the rising costs of heath care. This plan will destroy America, at least for the poor/middle. Republicans, look at the facts, the only time the middle class and the upper class has seen their wealth increase is when the top tax rate has been 36% or higher. it has NEVER helped the middle class being under 36%, NEVER. 25% gave us the great depression. CNN is not liberal and nor is MSNBC. They put up a show for liberals but yet they benefit IMENSELY by the current system. I get so pissed that people don't understand the tax rate = income equality. Why should the top 10% collect all of the profits this country produces from ALL OF OUR NATURAL RESOURCES???? It's not fair, we all work while 10% reaps the benefits. Screw you republicans!

    April 5, 2011 01:44 pm at 1:44 pm |
  24. J

    "Estimates $2.5 Trillion in increased revenue."
    "Begins significant tax reform, cutting corporate rate and top individual rate from 35% to 25%"
    "Ryan would extend the Bush tax cuts and the AMT patch."

    Where is this $2.5 Trillion coming from???? Oh wait...

    "Consolidate all six individual tax brackets. (Waiting for more specifics on that, folks.)"

    The math does not add up or we are getting our taxes raised.

    April 5, 2011 01:46 pm at 1:46 pm |
  25. Sissy

    Why are the news organizations and the pundits treating this like a serious proposal instead of labeling it a political ploy to be used as a 2012 talking point. The GOP talks budget cuts until they get into office and then they spend spend spend until they get kicked out. They wait for the Dems to fix the economy without any help from them and then they claim they're the party of fiscal responsibility and get voted back in and wreck the economy once again. When are the voters going to figure this out and start voting for no nonsense solutions. Privatizing government operations simp;y lines the pckets of the GOP buddies and ultimately costs the tax payer even more without delivering the promised services. Didn't the billions blown in Iraq to enrich private companies and wealthy contributors teach us anything?

    April 5, 2011 01:52 pm at 1:52 pm |
1 2 3 4