The GOP measure unveiled Tuesday would produce deficit estimates significantly lower than a comparable measure passed by the House a year ago. It claims deficit cuts totaling $3.3 trillion — spending cuts of $5.3 trillion tempered by $2 trillion in lower taxes — below Obama over the coming decade. The deficit in 2015 would drop to about $300 billion from $1.2 trillion for the current budget year.
The measure would cut spending from $3.6 trillion this year to the $3.5 trillion range in 2013 and freeze it at that level for two more years. It would produce a $797 billion deficit in the upcoming 2013 fiscal year, as opposed to $977 billion under Obama's budget.
"The president and his party are ignoring this problem, and if we have a debt crisis the people who are getting hurt first and the worst are the poor and the elderly," Ryan said Tuesday. "We are sharpening the contrast between the path we are proposing and the path of debt and decline that the president has placed us upon."
The Budget Committee is slated to debate and vote on the measure Wednesday in hopes of a vote by the full House next week.
The Senate has no plans to debate a budget and will instead rely on last summer's bipartisan budget and debt pact to govern this year's round of spending bills.
Almost half of Ryan's spending cuts would come from $2.5 trillion in cuts to federal health care programs — including repeal of Obama's signature health care law — over the coming decade. The measure proposes no changes to Social Security.
This year, under pressure from conservatives to cut even more, Ryan increased cuts to food stamps, student loans, welfare, farm subsidies and other programs whose budgets now mostly run on autopilot. A cut of $33 billion over 10 years to farm subsidies would be larger than a bipartisan plan hatched last year and would be difficult for farm state lawmakers to choke down.
On taxes, the measure calls for eliminating a host of deductions and credits in order to produce a far simpler income tax code with just two rates for individuals: 10 percent and 25 percent. But Ryan doesn't say the income levels at which the new rates would apply, nor does he specify which popular tax breaks — like the child tax credit or the mortgage interest deduction — might be spared.
Tax experts say, however, that the only way to get the top rate down to 25 percent — from 35 percent today — is to eliminate popular but expensive tax breaks like the deductions for mortgage interest, charitable contributions and employer subsidies of health care coverage,.
Medicaid would be cut $770 billion below Obama's budget over 10 years and awarded to states as a flexible block grant as would food stamp and housing assistance programs.
The GOP measure also would replace $55 billion in Pentagon spending cuts and $43 billion in cuts to non-defense appropriations set to take effect in January with at least $261 billion in other savings over the coming decade, including curbs to food stamps, federal employee pensions and further cuts to federal health care programs. Committees would develop the savings, which would be bundled together and brought to the floor in May.
The measure would leave in place, however, $12 billion in cuts to other programs, including a less than 2 percent cut in Medicare payments to providers and cuts to farm price supports.
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