CBO Says Ryan Budget to Raise Deficit in Short Term, Cut It in Long Term

While Ryan's plan would realize spending cuts in its first 10 years, some of those cuts would be outpaced by tax cuts that are also part of the plan. So, in 2022, projections based on the current law show that public debt would reach 67% of GDP; under the proposed budget, debt would instead reach 70%. After that, debt projections do improve each decade, relative to current law, as more people age into the new system of premium support payments rather than coverage and the burden of cost for medical care is transferred to them.

Under existing legislation, the extended baseline scenario shows that, for the average 65-year-old beneficiary, costs would be approximately 25% of what they would be in the private insurance market. Under the proposed budget, however, that individual would instead bear 68% of the costs for medical care.

Medicaid beneficiaries would suffer as well. "Federal payments for Medicaid under the proposal would be substantially smaller than currently projected amounts," according to the analysis. "States would have additional flexibility to design and manage their Medicaid programs, and they might achieve greater efficiencies in the delivery of care than under current law. Even with additional flexibility, however, the large projected reduction in payments would probably require states to decrease payments to Medicaid providers, reduce eligibility for Medicaid, provide less extensive coverage to beneficiaries, or pay more themselves than would be the case under current law."