April 4, 2011

Ryan to Unveil GOP Budget Plan: $4 Trillion Cut Over 10 Years

Budget will shrink Medicare, Medicaid, Social Security and cut top tax rate

Rep. Paul Ryan, R-Wisc., the new chairman of the House Budget Committee, announced over the weekend on Fox News Sunday that he would unveil a new Republican budget proposal that cuts over $4 trillion from government spending over the next 10 years, and hits everything from Social Security to Medicare, Medicaid, and discretionary spending.

The Wall Street Journal reported that Ryan prepared the budget, to be released Tuesday, and that it essentially ends Medicare as a program that directly pays medical bills. Instead, according to Ryan, Americans currently under the age of 55 would find Medicare converted into a "premium support" system that would pay for coverage up to about $15,000 on a variety of insurance plans for individuals once they reached the eligibility age of 65.

Medicaid would be changed as well, and converted to a series of block grants intended to offer more flexibility to states. Significant cuts are also proposed for Social Security, although with fewer details on how those cuts are to be achieved.

Taxes will be affected, too, with the top tax rate to drop from 35% to 25% for both individuals and corporations. A temporary tax change is also planned that would allow U.S. multinational corporations to repatriate as much as $1 trillion in profits at a tax rate that has been greatly reduced.

Democrats point out that such extensive cuts will put millions in jeopardy financially. Medicare premium subsidies, they add, will not grow as quickly as the costs of health care, so seniors would end up less able to deal with medical needs. Rep. Chris Van Hollen, D-Md., who is the top Democrat on the House Budget Committee, said, "All this does is shift the risk and burden of rising health-care costs to seniors on Medicare. You're on your own with the insurance industry."

Sen. Mark Warner, D-Va., who appeared on CNN's State of the Union, voiced concern that such massive cuts would damage social programs. He said, "I don't know how you get there without taking basically a meat ax to those programs who protect the most vulnerable in the country."

Sen. Dick Durbin, D-Ill., who is one of a group of six Democrats and Republicans working on an alternate budget proposal, said on NBC's Meet the Press, "I think we'll come at it differently. The idea of sparing the Pentagon from any savings, not imposing any new sacrifice on the wealthiest Americans, I think goes way too far. We have got to make certain that it's a balanced approach and one that can be sustained over the next 10 years."

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