Today marks the beginning of a full court press by Paul Ryan on behalf of the fiscal 2013 House Republican budget proposal: multiple television appearances, a Capitol Hill press conference, a Wall Street Journal op-ed, and a speech at the American Enterprise Institute. Last year’s budget faced a vicious Democratic onslaught, including allegations that the plan ended Medicare and an ad showing Ryan pushing an old lady in a wheelchair off a cliff.
This year’s budget preserves the option of traditional Medicare while transitioning away from single payer to premium support for competitive private insurance plans. It repeals — but doesn’t yet replace — Obamacare. It streamlines the tax code, closing loopholes and replacing the existing tax brackets with two low rates of 10 and 25 percent. It shifts toward a “territorial” tax system on business profits earned abroad. It lowers the top corporate tax rate, currently among the highest in the industrialized world. The budget also privatizes Fannie and Freddie.
The bottom line is that the Ryan budget would reduce deficits from 2013 to 2022 by $3.26 trillion relative to President Obama’s budget proposal (the Senate Democrats’ budget hasn’t existed in 1,056 days), according to the Congressional Budget Office. Spending would be $5.3 trillion less and $2 trillion in tax increases would be averted. Public debt will be $1 trillion lower by 2021. By 2050, the debt’s share of the economy could be as low as 10 percent — a far different path than the current trajectory.
One sticking point: the plan adds $240 billion to deficits over the next decade when compared to the CBO baseline. That baseline assumes things that neither party will allow to happen — the full expiration of the Bush tax cuts and reductions in Medicare payments — so it is not terribly realistic. Yet it will emerge not only as a Democratic argument against the Ryan tax cuts but as a point of contention among some congressional conservatives — like the supporters of the Senate Tea Party budget — who want immediate deficit reduction and even deeper spending cuts.