House Republicans announced a far-reaching vision for a leaner federal government on Tuesday, presenting a 2012 budget blueprint that would privatize Medicare for future retirees, cut spending on Medicaid and other domestic programs, and offer sharply lower tax rates to corporations and the wealthy.
The proposal represents the most comprehensive philosophical statement by resurgent Republicans since they claimed control of the House in last fall’s midterm elections. It promises to define the party heading into the 2012 presidential election and to shape the policy debate in Washington as both parties grapple with a soaring national debt.
Republicans controlling the House have fashioned plans to slash the budget deficit by about $5 trillion over the upcoming decade, blending unprecedented spending cuts with a fundamental restructuring of taxpayer-financed health care. (April 5)
Compare President Obama’s budget proposal with the House GOP plan.
Drafted by House Budget Chairman Paul Ryan (R-Wis.), the proposal aims to eventually shrink federal spending, measured against the economy, to its lowest level since 1949. Ryan said the plan would create jobs, promote growth, and rebuild an economy ravaged by recession and “relentless government spending, taxing and borrowing.”
“For too long, Washington has not been honest with the American people. Washington has been making empty promises to Americans from a government that is going broke,” Ryan told reporters. “We believe in this country that we ought to have a social safety net. . . . The problem is our social safety net is fraying at the seams.”
Congressional Democrats attacked the plan as an extreme attempt to balance the budget on the backs of the most vulnerable Americans. House Minority Leader Nancy Pelosi (Calif.) blasted it on Twitter as “a path to poverty for America’s seniors & children and a road to riches for big oil.”
Ryan’s budget, titled “The Path to Prosperity,” would spend about $40 trillion over the next decade — $6.2 trillion less than the budget President Obama proposed in February. The bulk of the savings would come from federal health-care programs, starting with a repeal of Obama’s ambitious new initiative to expand coverage for the uninsured.
Starting in 2022, Ryan also would end Medicare as an open-ended entitlement for new retirees and begin slowly raising the age of eligibility from 65 to 67. Instead of getting government-paid benefits, new retirees could choose a private policy on a newly established Medicare exchange. The government would pay “premium support” worth about $8,000 directly to the selected insurance provider, with the wealthiest retirees receiving about a third of that amount.
In an analysis of the budget plan issued Tuesday, the nonpartisan Congressional Budget Office said that “most beneficiaries who receive premium support payments would pay more for their health care than if they participated in traditional Medicare,” with 65-year-olds covering an average of twice as much of their total health-care costs.
Medicaid would come in for even sharper cuts, exceeding $700 billion over the next decade. The GOP plan would end the financing partnership between the federal government and the states, replacing it with block grants that give states less money but free them to manage the program as they wish. Federal distributions would be reduced by more than a third by the end of the decade.