Today House Republicans unveil their proposed federal budget for fiscal 2013. Democrats have already unleashed a “Medicare March” series of attack robocalls rather than a detailed alternative. “Republicans are on a maddening push once again to end Medicare and raise health-care costs for seniors, while giving more special tax breaks to big oil companies and millionaires,” says Rep. Steve Israel (D-NY), who chairs the House Democrats’ congressional campaign committee.
House Budget Committee Chairman Paul Ryan is ready for the latest installment of his “Path to Prosperity” to become a political football. Ryan started hitting back the night before its release. “Make no mistake, years of empty promises from both political parties got us into this mess,” he said in a videotaped message. “But when it comes to the federal budget, the Democrat-led Senate hasn’t even proposed one in three years.”
Last year, Ryan’s budget was the only one to clear a single chamber of Congress. But it stalled in the Democratic Senate and then featured prominently in attack ads alleging that Medicare would be abolished. The conventional wisdom held that the House GOP’s spending cuts helped cost the party a special congressional election in a traditionally Republican district in New York.
This time around Ryan has teamed with liberal Sen. Ron Wyden (D-OR) to propose an alternative that would preserve the option of traditional Medicare but also encourage the purchase of private health insurance and the reduction of medical costs through market-based competition. Far from abolishing Medicare, the concept of shifting from single payer to a premium support system — if not the details of this specific plan — has in the past attracted the support of centrist Democrats.
The budget is to include a tax reform plan. Authored with House Ways and Means Chairman Dave Camp (R-MI), it would replace the six existing individual income tax brackets with just two low rates: 10 percent and 25 percent. That would be the closest the country has come to a federal flat tax since the bipartisan tax reform signed into law by President Reagan in 1986.
Under Ryan-Camp, the corporate tax rate would be cut from 35 percernt to 25 percent. The Alternative Minimum Tax, which has been increasingly gobbling up middle-class incomes because it is not indexed to inflation, would be scrapped. Spending levels would be lower than those set by the debt ceiling deal last summer.
Ryan contrasts his budget with the president’s approach, which he argues contains more of everything: more taxes, more spending, and more debt. “Despite imposing roughly $2 trillion in tax increases on hardworking taxpayers the debt still skyrockets under his plan, and it will put us on par with countries like Greece,” Ryan said in his video. “That will mean sudden cuts to benefits, sudden tax increases, and really a fundamental change to the American way of life as we know it.”
While many leading Democrats have been reluctant to propose reductions in anything other than the defense budget, Ryan does have some spending cut competition. Last week, Sens. Rand Paul (R-KY), Jim DeMint (R-SC), and Mike Lee (R-UT) introduced a Tea Party budget that aims to reduce spending and the debt even faster.
The conservative senators’ budget includes a proposal to essentially enroll Medicare recipients in the Federal Employee Health Benefits Program, which chooses from a wide variety of private insurance plans, starting in 2014. Sen. Lindsey Graham (R-SC) is another supporter of this measure, which also gradually raises the age of eligibility.
This needn’t produce a conflict. Last year, the conservative Republican Study Committee proposed an alternative to the Ryan budget in the House. Sen. Pat Toomey (R-PA), like Rand Paul, did so in the Senate. Most of their supporters backed Ryan’s handiwork too. But given the reality of divided government, none of these plans is likely to become law. What they all can do is chart a course showing that serious and significant spending cuts are possible.
The Republican presidential candidates will weigh in on the congressional GOP budget proposals, and the reaction is likely to be broadly (if somewhat cautiously) supportive of Ryan. No denunciations of “right-wing social engineering” are expected this time around. There is growing awareness that the time for addressing the country’s fiscal problems is getting short.
For some, it is the height of campaign season and “Medicare March.” Others have their eyes on preventing a march off the fiscal cliff.