Paul Ryan plans to balance budget in 10 years, reform Medicare

Tom Price and Paul Ryan
Image credit: Ellen Carmichael

House Budget Committee Chairman Paul Ryan (R-WI) rolled out House Republicans’ FY 2015 budget proposal yesterday. The latest iteration of the “Path to Prosperity” seeks to balance the federal budget in a decade, reform Medicare, and repeal Obamacare.

“This is a plan to balance the budget and create jobs, and it builds off a simple fact: We can’t keep spending money we don’t have,” Ryan said in a statement from the House Budget Committee. “This budget provides relief for families. Too many Americans struggle to make ends meet, while Washington continues to live beyond its means. It’s irresponsible to take more from hardworking families to spend more in Washington.

“Today’s proposal—The Path to Prosperity—shows that it’s not too late to tackle our country’s most pressing challenges,” he continued. “By cutting wasteful spending, strengthening key priorities, and laying the foundation for a stronger economy, we have shown the American people there’s a better way forward.”

Senate Budget Committee Chair Patty Murray (D-WA) told reporters in February that she wouldn’t work on a budget this year, citing the two-year budget agreement that she and Ryan reached in December. Her counterpart, however, believes the budget deal settles only short-term issues.

“The Bipartisan Budget Act was a good first step,” Ryan said of the previous budget deal. “But we can and must do more. As the House majority, we have a responsibility to lay out a long-term vision for the country, and this budget shows how we will solve our nation’s biggest challenges.”

The budget, Ryan’s last as chairman of the committee, has little chance of passage. Ryan and House Republican leadership believe that this budget framework will provide a distinction between them and President Barack Obama, who, last month, rolled out his nearly $4 trillion budget proposal.

The most controversial part of the budget are the reforms to Medicare. The program remains untouched for Americans who are already in the proposal. It does, however, offer vouchers to future retirees, giving them the option between enrolling in the Medicare program or purchasing their own private health insurance plan.

The budget document presented by the House Budget Committee explains that Medicare, one of the main drivers of federal spending, is in dire financial dire straits.

“[S]pending for Medicare has grown quickly in recent decades — in part because of rising enrollment and in part because of rising costs per enrollee — and has reached unsustainable rates,” the committee’s “Path to Prosperity” blueprint explains. “Between 1970 and 2012, gross federal spending for Medicare rose from 0.7 percent of GDP to 3.7 percent.”

“In CBO’s latest Long-Term Budget Outlook, mandatory spending on Medicare is projected to reach 5 percent of GDP by 2040 and 9.4 percent of GDP by 2088. Medicare’s trustees project that Medicare’s Hospital Insurance Trust Fund will be bankrupt by 2026,” the committee adds.

Democrats are already demagoguing Ryan’s proposal. Senate Majority Leader Harry Reid (D-NV) used it rehash his attacks on the Koch brothers. “It’s a blueprint for a modern…how would we say this? Koch-topia. Yes, that’s it,” the Nevada Democrat said on the Senate floor. “Call it whatever you want. We might as well call it the Koch budget because that’s what they’re doing, protecting the Koch brothers.”

Whether Democrats will try to use the budget against Republicans like they did in 2010 remains to be seen. Despite attack ads and outright lies against parts of Ryan’s budget proposal, Republicans went onto take 63 seats and control of the House of Representatives.

Vulnerable Democrats will also have to answer for the $200 billions in cuts to the Medicare Advantage program. The popular program was slashed to help pay for Obamacare.


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