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Ryan budget proposal includes PPACA repeal

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(Bloomberg) – Rep. Paul Ryan assumed when he drafted his budget plan that Congress would repeal the Patient Protection and Affordable Care Act (PPACA).

The budget plan unveiled yesterday would lower the top income-tax rate to 25 percent from 39.6 percent now.

The budget also increase defense outlays while cutting non-defense programs — a broad category of spending that covers everything from national parks and housing vouchers to NASA and environmental regulation.

The House Budget Committee chairman’s plan has little chance of being enacted this year. He and Senator Patty Murray, a Washington Democrat who heads the Senate budget panel, reached a deal in December to set top-line spending at $1.014 trillion for the 2015 fiscal year that starts Oct. 1.

Ryan and Murray’s two-year accord ended months of partisan stalemate over spending and revenue. It set the budget at $1.014 trillion for fiscal 2015, up from $1.012 trillion this year.

Ryan’s committee described the new proposal as “an expression of our governing philosophy,” will be considered by the panel tomorrow and reach the House floor next week.

“It’s very important to offer people a choice,” Ryan, R-Wis., said yesterday of the proposal,

Senate Democrats said they plan to campaign against the budget proposal in the November elections.

“House Republican members running against our Democratic Senate incumbents” will “have to defend the Ryan budget,” Sen. Charles Schumer, D-N.Y., told reporters.

White House press secretary Jay Carney said in a statement yesterday that Ryan’s plan would “raise taxes on middle-class families with children by an average of at least $2,000 in order to cut taxes for households with incomes over $1 million.”

In the new proposal, Ryan would keep the $1.014 trillion cap on annual spending from his deal with Murray.

The $1.014 trillion figure doesn’t include “mandated spending” on Medicare and Social Security. “Entitlement program” spending costs 2.5 times as much as “discretionary spending.”

If Ryan included mandated spending in his proposed budget, the budget would show a total of $3.7 trillion in government spending.

Ryan’s plan takes PPACA repeal as a given.

Ryan wants to cut food stamp funding by $125 billion over 10 years, by tightening eligibility rules and shifting to sending states fixed sums of cash, or block grants, rather than trying to meet all eligible recipients’ needs at the federal level.

Ryan would keep the current Medicare system inact for people who are 55 and older in 2013. Those who reach age 65 in 2024 or later would use subsidies to buy private plans through a Medicare exchange.

Ryan does not endorse a specific strategy for cutting Medicaid spending but mentions the idea of shifting to use of block grants.

Democrats say the budget plan is built on fuzzy logic and cuts that would harm the economy.

“As in previous years, Chairman Ryan relies on gimmicks, magic asterisks, and spurious accounting assumptions to presume that his budget will achieve its anticipated deficit savings,” Rep. Steny Hoyer, D-Md., the second highest ranking House Democrat, said in a statement. “His budget simply doesn’t work.”

–With assistance from Kathleen Hunter, Michael C. Bender and James Rowley in Washington.

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