House Set to Debate Paul Ryan's 2012 Budget

Obama is also going to announce his own plans for deficit reduction.

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Democrats last week criticized Ryan's budget proposal for ignoring the concept of "shared sacrifice" and for favoring the wealthy in the proposed tax reforms. Ryan's budget calls for simplifying the tax code by eliminating loopholes and some deductions. Also, the plan would lower the top tax rates for individuals and corporations from 35 percent to 25 percent, a measure that Ryan says should increase the nation's competitiveness and lead to growth. Scott Hodge, president of the Tax Foundation, a Washington-based nonpartisan tax research group, says that, disregarding the repeal of the tax increases included in the healthcare reform law, the changes to the tax code alone won't significantly alter the amount of revenue the government takes in. "At the end of the day, it's probably a pretty neutral plan," says Hodge. "It could actually increase the progressivity of the tax code by eliminating many of those deductions that are largely benefitting upper income people. . . . The overall balance of who bears the burden of tax will probably remain the same."

Ryan also received criticism for the plan's jobs numbers, calculated by the Heritage Center for Data Analysis, part of the Heritage Foundation, a right-leaning research institute in Washington. Some say the numbers were overly optimistic. Ryan says his plan would create nearly 1 million private sector jobs next year and as many as 2.5 million in the last year of the decade. The original calculation noted that the proposal would bring the unemployment rate down to 4 percent by 2015, but an updated version issued by Heritage the next day pointed out that the rate would be closer to 5.4 percent.

The plan is now up for consideration on the House floor, and Democrats are planning to introduce their budget this week. President Obama, coming off of last week's "historic" budget deal which barely averted a government shutdown, is scheduled to speak tomorrow on his own plans for deficit-reduction. No doubt this is just the start of the debate.

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