Congressional Republicans are coalescing around a plan for reforming Medicare sponsored by House Budget Committee Chairman Paul Ryan (R-Wis.) and Sen. Ron Wyden (D-Ore.).
Sen. Pat Toomey (R-Pa.), an influential voice on budget issues in the Senate, adopted Ryan’s Medicare plan in the budget proposal he unveiled Wednesday.
Senate Democrats do not plan to schedule a vote on their own budget measure.
Last year, Toomey’s budget eschewed the controversial Medicare reforms included in the House Republicans’ fiscal year 2012 budget. He called for a 10-year, $300 billion fix to eliminate scheduled cuts in doctor payments but otherwise preserved Medicare’s status quo.
Toomey made a point Wednesday of reminding reporters that Ryan’s latest Medicare overhaul has bipartisan support.
“I think the evolution in the discussion about how we reform Medicare has gotten to the point where there is a really, really strong and now bipartisan proposal and so we’ve built that into our system, into our budget,” said Toomey.
Toomey praised Ryan’s plan to create a premium support plan to compete with government-run health insurance for seniors.
“The premium is determined by competitive bidding so it is not all the case that senior citizens would be at risk to escalating prices because the premium would be a function of whatever those prices are,” he said.
Sen. Jeff Sessions (Ala.), the ranking Republican on the Budget Committee, voiced support for Toomey’s plan.
“I think it’s a strong budget, it balances in eight years, which is not easy to do, and would put the country on a sound financial path,” he said.
The Medicare reforms in the Ryan and Toomey budgets are based on a white paper Ryan and Wyden co-authored last year.
Wyden told The Hill last month that he has a few concerns about the Medicare reform included in Ryan’s plan. He does not support Ryan’s call to raise the Medicare eligibility age and said he would not likely support the lower rate at which Ryan’s budget adjusts federal spending to keep pace with healthcare costs.
As did his last budget blueprint, Toomey’s plan for 2013 and beyond would cut the deficit more aggressively than Ryan’s plan.
It would balance the budget within eight years and create a small surplus in 2021 and 2022. Ryan would eliminate the federal deficit by 2040.
“The big difference is I think between this budget and the House budget, this budget balances within 10 years, it does so by holding back on spending a little more aggressively than the House,” Toomey said.
Toomey noted his budget also gives more credit to revenues likely to come into federal coffers as a result of steep cuts to the marginal income and corporate tax rates.
The centerpiece of his plan is tax reform that would lower all marginal income rates by 20 percent and the corporate tax rate from 35 percent to 25 percent. The revenue lost to the tax cuts would be offset by limiting tax deductions and exclusions and closing special-interest tax loopholes.
The federal government collects about 42 percent of its revenue through income taxes, according to the Tax Policy Center. A 20-percent reduction in income tax rates would cost the federal government about $190 billion in one year alone.
Toomey does not propose specific deductions, exclusions and loopholes to eliminate. He leaves that to the authorizing committees, as does Ryan in his budget, which has opened the House Republican plan to criticism that it relies on secret plan to raise revenue.
Toomey suggested Wednesday that individual deductions could be capped and taxpayers given flexibility to choose what they want to write off.
“You would combine the deductions available to an individual in a basket and you limit the value of that basket without specifying which piece, which individual deduction would be limited,” he said.
His plan would repeal the 2010 healthcare reform law and turn Medicaid into block grants, freezing Medicaid spending at 2012 levels through 2017.
It would replace defense cuts that are scheduled to go into effect in the sequestration process set up by the 2011 Budget Control Act with non-defense spending reductions.
Domestic spending on social programs would be reduced to 2006 levels and frozen for seven years, after which time it would be indexed to inflation.
Reforms to welfare programs would save $440 billion and changes to the federal employee health and retirement benefits would save $150 billion.
Senate Budget Committee Chairman Kent Conrad (D-N.D.) has told Toomey that he will not allow a vote his budget plan within committee but Toomey is confident he can force a vote on the Senate floor.
The Senate parliamentarian ruled the Budget Control Act passed last year does not fulfill the Senate’s budget requirement, giving any senator power to offer a budget plan on the chamber’s floor.
“There is a fallback and it allows individual members to circumvent this process and go right to the Senate floor and I intend to do that,” he said.