Ryan to unveil budget plan that cuts $6 trillion in 10 years
April 4th, 2011
11:23 PM ET
10 years ago

Ryan to unveil budget plan that cuts $6 trillion in 10 years

Washington (CNN) - House Budget Chairman Paul Ryan, R-Wisconsin, will unveil a highly anticipated 2012 Republican budget proposal Tuesday that would cut about $6 trillion over 10 years, according to GOP sources familiar with the document.

The plan, the most detailed economic guidepost for the new House GOP majority, would also mean dramatic changes to those political lightning rods - entitlements.

The GOP budget blueprint calls for a controversial overhaul of Medicare, the health care program for seniors. And it imposes deep cuts in Medicaid, which provides health benefits to low-income Americans.

The current Medicare program would be dismantled, starting in 2022. The government would no longer directly pay bills for seniors in the program. Instead, recipients would choose a plan from a list of private providers, which would be subsidized by the federal government.

In an op-ed in The Wall Street Journal, Ryan says that reform "will guarantee that Medicare can fulfill the promise of health security for America's seniors."

Ryan often calls Medicare a major driver of America's debt, and another central goal of his proposed changes to the program is to help reduce the debt and deficit.

GOP sources familiar with the plan stress anyone 55 or older now would not be affected by the changes.

On Medicaid, Ryan's plan calls for deep cuts and another fundamental change: The federal share of the Medicaid system would become block grants to the states.

CNN is told 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.

Two House GOP lawmakers briefed on the proposal told CNN that they and others on the House Budget Committee believe it's a mistake not to tackle Social Security.

As for so-called discretionary spending, Ryan says he would bring down spending on domestic government agencies to below 2008 levels.

GOP sources have told CNN his plan is to cut spending back to 2006 levels. It's unclear how much that would slash, but it would be more than the $61 billion in spending cuts House Republicans approved earlier this year.

Ryan says his savings proposals are "numerous and include reforming agricultural subsidies, shrinking the federal work force through a sensible attrition policy, and accepting Defense Secretary Robert Gates' plan to target inefficiencies at the Pentagon."

The budget would also cut the corporate tax rate from 35% to 25%, but at the same time do away with tax loopholes for corporations. Those loopholes helped General Electric find a way to pay no taxes last year, sparking outrage. Ryan says his proposal would help prevent that.

"It maintains a revenue-neutral approach by clearing out a burdensome tangle of deductions and loopholes that distort economic activity and leave some corporations paying no income taxes at all," said Ryan in his op-ed.

Ryan's plan also provides for a permanent extension of all the Bush-era tax cuts. Under a compromise with President Barack Obama, were extended last year through 2012.

A GOP source said even with the major cuts and changes in Ryan's proposal - essentially a blueprint that guides spending decisions and does not go to the president for his signature - it would not bring the budget into balance for many years.

House Republican leaders have been signaling for some time that they plan dramatic and controversial changes to entitlement programs bring down the budget deficit and debt. Ryan said Sunday he knows his budget is giving Democrats a "political weapon" against Republicans.

Already Democrats have been issuing statements attacking the plan.

"It is now clear that the Republican budget is not bold, but the same old ideological agenda that extends tax breaks to millionaires and big oil companies while cutting our kids education and health security for seniors," said Rep. Chris Van Hollen, the top Democrat on the House Budget Committee.

A spokesman for the House Democrats' campaign arm told CNN that Democrats are already planning to target up to 50 House Republicans, challenging them for supporting Ryan's plan, which they were arguing would "dismantle Medicare for seniors" even before details on the plan were unveiled.

One news release focused on freshman Texas Republican Blake Farenthold, who narrowly won election last fall.

"House Republican leaders are now full-speed ahead on a partisan plan that would dismantle Medicare for seniors," said Jesse Ferguson of the Democratic Congressional Campaign Committee. "Now is the chance for Rep. Blake Farenthold to stand up and say he won't end Medicare as we know it because it's too important to seniors. If Rep. Blake Farenthold can't stand up for Texas seniors now against ending Medicare, then he never will."

Knowing that the proposed changes will be politically risky and elicit an onslaught of criticism, Ryan and Republican Whip Kevin McCarthy of California have 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 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. "By the time my kids are my age, just those three programs - Social Security, Medicaid and Medicare - will consume all federal revenues. There will be no room for anything else in the federal budget."

When Ryan proposed a version of his Medicare overhaul idea last year, known as his "road map," Democrats skewered it and tried to use it as a campaign weapon against Republicans across the country.

Obama has often said it is important for Washington to address entitlement spending. But the president has not offered any specific proposals, and Republicans suggest he is unwilling to back this rhetorical call with specifics because he wants the GOP to take the first risky steps.

Multiple GOP sources admit the timing of Ryan's 2012 budget proposal is tricky. It is being released in the middle of down-to-the-wire, contentious negotiations with Democrats about a spending measure to keep the government running for the rest of this 2011 fiscal year.

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.

Filed under: Budget • Congress • House • Paul Ryan
soundoff (36 Responses)
  1. Aaron

    This is just another Repub scam to give more money to wealthy. They want to cut benefits to anyone not wealthy, then reduce taxes on corporations. Wisconsin needs to recall Ryan. He's obviously just another lackey for the billionaire Koch brothers.

    April 4, 2011 11:32 pm at 11:32 pm |
  2. jefflz

    It is a Republican/Tea Party dream to destroy every social safety net this country has ever created. These same people have no trouble spending trillions on useless military gear and illegal wars that have been detrimental to the entire globe. A country that serves only the top 1% of the economic ladder will have the same destiny as every third world country that practices the same philosophy. These misguided economic Neanderthals must be stopped by the White House/Senate if they can find the courage to stand up and fight for once.

    April 4, 2011 11:37 pm at 11:37 pm |
  3. Dan

    Thank Jesus the Republican saved all those tax cuts for the billionaires first!

    April 4, 2011 11:41 pm at 11:41 pm |
  4. anahadwolves

    Amazing! Make the tax cuts for millionaires permanent, reduce taxes for corporations yet cut back Medicare and Medicaid for the most vulnerable among us? What an egregious worm Rep Ryan as is the rest of his pack of Republican jackals. Any competent adult who buys into this charade and votes Republican should be ashamed.

    April 4, 2011 11:54 pm at 11:54 pm |
  5. Republicans Are The American Taliban

    This sounds like a great plan...if we wanted to return to 1800's.

    April 4, 2011 11:58 pm at 11:58 pm |
  6. al in memphis

    Isn't some of these items right out of Obama state of the union address.

    April 4, 2011 11:59 pm at 11:59 pm |
  7. Prof Magyar

    This is the craziest thing I've ever heard of. Medicare/Medicaid are much more efficient with regards to their budgets and number of people served. Private insurance companies have administrative expenses that are far highere than Medicaid/Medicare. Besides, this isn't an issue of the dollars Medicaid/Medicare consume, this is a question of how we deliver and pay for health care in this country. Secondly, I certainly welcome the idea of making the Bus era tax cuts permanent for my own personal reasons; but how on earth would allowing me and others to accumulate more wealth do any good for those in lower income brackets? It pains me to see this country rotting from within, but at least I am on the road to accumulating enough to be comfortable. I just hope that it won't cost too much to pay armed patrols to guard wealthy neighborhoods from those that don't have enough food, clothing, or shelter.

    April 5, 2011 12:02 am at 12:02 am |
  8. ThinkAgain

    It's all about cutting the social safety net and programs that help the lower and middles classes ... cutting funding to programs like WIC and HeadStart ... programs that protect our air, water, food supply, etc. .... agencies that monitor safety in the workplace and don't allow companies to add anti-freeze to toothpaste or lead to toys ....

    All the while extending tax cuts to the wealthy which has been proven to NOT create jobs here in the US ... providing vouchers for private religious education ... and in general, further pushing our country towards the oligarchy run by corporations and "Christians" that is the end game for the Republicans.

    Interesting that they didn't "reveal" this plan before the elections last November ... But of course they couldn't, since their whole election strategy hinges on stirring up their “base” with lies, hatred, fear and division so they will once again vote against their own self-interest. If the GOP had let the cat out of the bag – and if they actually TOLD folks up front just how hard they want to mess with us – it'd give even the slowest among us (I'm talking to you Fox watchers!) time to figure it out and send them packing!

    Wake up, folks! The GOP is going in for the kill!

    April 5, 2011 12:04 am at 12:04 am |
  9. Roger47

    The last time Republicans "overhauled" Medicare, it was to create an option that was run by insurance companies, cost more for the taxpayers, and created a "donut hole" that resulted in many seniors having to go without medication at the end of each year. Why should we expect this to be a good thing?

    April 5, 2011 12:10 am at 12:10 am |
  10. usualone

    States are often inequitable in treatment, and therefore if the states handled Medicare, the seniors will not be treated as fairly in one state as another. The burden would fall on the states that are already saying they are in dire straits.

    April 5, 2011 12:36 am at 12:36 am |
  11. Entitlements for farmers

    Entitlements. Really Ryan, many of us has been paying for these "entitlements" long before your stupid Astec was born. Stop! the Corporate welfare 1st, then the bush tax-cuts for the rich! Then we can talk about your reformation of these so called "entitlements". PLEASE WAKE UP PEOPLE, BEFORE THESE FOOLS DESTROY THIS COUNTRY!!!

    April 5, 2011 12:40 am at 12:40 am |
  12. Bill

    If Paul Ryan is serious about this, here's one stand he can take:

    Eliminate the free lifetime healthcare for congresspersons.

    This was a benefit that congress gave itself not that many years ago, and when you think about it, most congresspeople can afford healthcare better than 99 % of the US populace.

    Let's see the Republicans show they really mean it, by cutting off a benefit to "the privileged class".

    April 5, 2011 01:03 am at 1:03 am |
  13. Jim Oakey

    My comment is regarding so-called entitlements, specifically Medicare and Social Security). It is true that some folks receive one or both of these programs and have contributed nothing or next to nothing to it. To these people, these programs are entitlements. To the vast majority of us on these programs (retirees), calling them entitlements is not only a wrong use of the nomenclature, but a personal slap in the face. I am 65 years old and just started Medicare this year – I've been on Social Security since my retirement a year and a half ago. I have a heart condition that is caused by the use of Agent Orange during my tour of duty in Vietnam (1966-1968) with the Marine Corps. I doubt that I will live to see 70 years of age. I contributed to both Social Security and Medicare through mandatory payroll deductions for over 40 years. To those who think that Medicare is free – think again. Over $110 a month is deducted of my Social Security to help subsidize Medicare. I realize that $1,300 a year is inexpensive for health insurance – but when you add that $110 a month to the 40 plus years of payroll deductions, it results in a significant amount of money. To call both of these programs entitlements to people like me (most retirees) is utterly rediculous and wrong.

    April 5, 2011 01:07 am at 1:07 am |
  14. Bill

    Balance the budget ? Didn't the last Democratic President do this ?

    And the Republican President came into office, and immediately took us into deficit spending again !

    Where was the Republican fiscal conservatism then ?

    April 5, 2011 01:09 am at 1:09 am |
  15. Tanbiker2

    Let's all hope that a gun goon loony will soon attend a Paul Ryan political rally and solve the problem he is trying to create.

    April 5, 2011 01:18 am at 1:18 am |
  16. bobden

    How about cutting entitlements for congress. Cut pay, close the perks like free medical care, free lunches, free...

    April 5, 2011 01:41 am at 1:41 am |
  17. davidgarcia

    I believe this is correct. I also believe this is the kind of plan that we are likley to end up with, though somewhat less generous as it will be forced on us by our creditors who won't give a hair about healthcare for seniors and the needy. Read "Wise Medical Insurance" articles if you dont have insurance.

    April 5, 2011 02:00 am at 2:00 am |
  18. Brian Dodge

    Cutting Medicare will cause higher death rates among the elderly; this will lower demand for Social Security. That's why their plan doesn't need any direct cuts in SS – they'll happen naturally as more old farts die without medical care.
    The Republicans seem to have discovered "demand side economics"!

    April 5, 2011 02:17 am at 2:17 am |
  19. kurt

    the dems are trying to do to the u.s. what we did to the u.s.s.r. . finacially run it aground. they're still angry over the death of the socialist workers "paradise".

    April 5, 2011 02:20 am at 2:20 am |
  20. J.V.Hodgson

    What a big surprise,This will not even get onto 1st base even as a bunt!!But true colors show plenty of give aways to the rich and nothing for those less well off.
    I have some difficulty differentiating between his Composite plan from multiple private insurers than the current bills exchanges, what about Limits on Liability claims and pre-existing condition exclusions and kids on parents policies?
    By the way I see nothing in this that does one iota to help Jobs.

    April 5, 2011 02:27 am at 2:27 am |
  21. Spending our Way to the Scrap Heap of History

    So do the Democrats think the federal government can spend $1.6 TRILLION more than they take in FOREVER? They have knowingly and purposely EXPANDED government when revenues were down and driven the deficit, and our national debt, through the roof. They can't come up with ways to cut spending.

    BUT they have LOTS of ways to RAISE TAXES to feed the ever growing federal beast. Even if they could confiscate ALL of the money of the "rich" that they despise so much, the Democrats still couldn't eliminate the huge yearly deficits. Just as they have driven businesses overseas with their over regulation, they will drive wealthy taxpayers out of the country.

    This country used to be the land of the free and the home of the brave. The Democrats and their entitlement society mentality have turned it into the land of the freebie and the home of the deadbeat. People think they no longer have to work for what they get, but are entitled to the fruit of others labor.

    Unless this mentality is purged from our country, we are doomed to fail. Life isn't fair and there are no "level playing fields". Get over it, roll up your sleeves and work for what you want. Stop expecting the government to house, cloth and feed you. You are not entitled to government theft of others wealth or income.

    April 5, 2011 03:11 am at 3:11 am |
  22. Mike

    This can't happen soon enough.

    April 5, 2011 04:19 am at 4:19 am |
  23. Johnson

    Alot of the is BS and they know it. It is funny how all the blank checks under Bush were ignored by the GOP and now somehow we seem to be in a crises when a Dem takes office, the GOP is trying to make the American People believe that they are fiscally conservative and that everything is the fault of President Obama. These people are fools.

    April 5, 2011 05:27 am at 5:27 am |
  24. Hotdog

    Until both parties agree to cuts in Government spending including the Defense Department and raising taxes especially on the top 1% that holds the wealth in the USA and large corporations then it means nothing.

    April 5, 2011 05:53 am at 5:53 am |
  25. johnmenacherjr

    That does it! I see the light get rid of all things middle class including the middle class. Dont ever believe a repug from Wisconsin . They get yuo everytime.

    April 5, 2011 06:12 am at 6:12 am |
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