What's in Paul Ryan plan? Surprising numbers from GOP House budget. (+video)
The GOP budget plan Paul Ryan is putting forward in the House is filled with ambitious numbers, big and small. The bottom line: reduce the national debt and the interest payments to service it.
Paul Ryan, in his latest House budget plan, is certainly ambitious in his goals.Skip to next paragraph
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Balance the budget in 10 years. Avoid the military cuts occurring in the current federal “sequester.” Streamline the tax code without raising taxes. Make entitlement programs sustainable. Make the public debt go down, not up.
Representative Ryan urged all those things Tuesday and more, in his role as chairman of the House Budget Committee. The targets in the committee’s new budget plan are in some cases hard to achieve simultaneously.
And they’re controversial. Ryan blended candor with understatement when he said President Obama would “probably not” sign on to all the Republican ideas. The White House didn't disappoint, saying in a statement that the budget's math "doesn't add up" and that Mr. Obama considered the proposal "the wrong course for America."
Here’s a tour of Ryan’s proposal, with each stop headlined by an eye-popping number from the House budget document.
Net interest on national debt in 2023: $630 billion
That’s how much the nation would spend on interest payments alone, during the 2023 fiscal year, even if Ryan’s big spending cuts were enacted and the nation balances its budget.
Without any change from current policies, debt payments in that year would total $857 billion, the Congressional Budget Office (CBO) calculates.
Unless the buildup of debt is addressed, “we are consigning the next generation to an inferior standard of living,” Ryan said Tuesday.
Although they might not phrase the consequences exactly that way, nonpartisan economists including those at the CBO generally agree on the need to address the national debt.
Most economists agree that the core cause of the rising national debt is entitlement spending that’s growing fast, as a share of overall national income, without tax revenue to cover the cost.
Annual rise in Medicare spending per capita: GDP growth plus 0.5 percent
Ryan’s controversial idea of overhauling Medicare isn’t new, but his approach gives a jolt to anyone accustomed to the current system. He says he’s saving Medicare from its current track of “going bankrupt.” Critics say he’s turning a vital piece of economic security for seniors into a voucher program.
Ryan’s new budget plan calls for a shift toward a “premium support” model of Medicare, starting in 2024 for people born in 1959 or later. Seniors would choose among a variety of health plans, and Medicare would provide a premium-support payment that would cover all or part of the insurance.
The pace of Medicare spending would slow, because annual increases would be capped at the rate of GDP growth plus 0.5 percent – well below their long-term trend line. Low-income Americans would get extra help with out-of-pocket costs.
“This proposal would use competition – not bureaucratic fiat – to control costs,” the budget plan says.
Where the CBO forecasts $8 trillion in Medicare spending between 2014 and 2023, the new House budget plan calls for $6.6 trillion in net Medicare spending for that period.
Expanding the federal safety net: zero dollars
A section of the House Republican plan is titled “safety net strengthened.” The Ryan approach is defined by the argument that the current array of antipoverty programs hasn’t put much of a dent in poverty, and that a focus on stronger economic growth would do the most to improve living standards at all income levels.