By Erik Wasson - 04/05/11 10:00 AM EDT
Tuesday will be a defining moment for House Budget Committee Chairman Paul Ryan (R-Wis.).
Three years after introducing a “roadmap” for fiscal discipline that proposed sweeping reforms to entitlements but won only eight co-sponsors, Ryan will unveil a budget resolution with the full backing of House leadership that includes major reforms to Medicaid and Medicare.
While the reforms are toned down from the roadmap and Ryan won’t unveil major cuts to Social Security, overall the budget will cut $6.2 trillion relative to President Obama's 2012 budget proposal, and $5.8 trillion relative to the Congressional Budget Office's current policy baseline. The proposal brings federal spending to below 20 percent of gross domestic product (GDP), reduces deficits by $4.4 trillion and brings down top individual and corporate rates to 25 percent from 35 percent.
“He has been the champion of this and it has been a lonely cause and now he is right in the middle of the debate,” Concord Coalition Executive Director Bob Bixby said of Ryan, who, while only 41, is serving his seventh term in the House.
Ryan’s 2012 budget proposes that Medicaid become a block-grant program, and would change Medicare from a program that guarantees benefits to one that guarantees only a set contribution to a senior’s healthcare costs. It would cap overall spending as a percentage of the economy, and it would not raise taxes.
Yet some conservatives are miffed that Ryan’s plan does not balance the budget within 10 years. They also want deeper discretionary cuts and a plan to reform Social Security.
The Republican Study Committee, which claims 176 members of the GOP caucus, has said it will unveil an alternative budget and may offer it as an amendment on the floor.
“The Ryan budget will not be perfect and, once details are released, we look forward to a spirited discussion of it,” said Heritage Action CEO Michael Needham.
On Tuesday, Ryan will meet his critics from the right head-on with a speech at the conservative American Enterprise Institute.
AEI is a strong proponent of the budget’s plan to convert Medicare to a “premium support” plan under which seniors would have their insurance premiums for private plans paid by the government.
Liberal opponents call this a “voucher” plan, an argument Ryan is trying to rebut. He argued over the weekend that a true voucher system would give seniors money to buy private insurance, while he would send a payment directly to the insurer.
Some Republican members stressed to The Hill last week that the proposal is not a voucher, an indication that Democrats have already succeeded in making that a dirty word.
Even before he released his budget, Ryan acknowledged Democrats would use his proposals as weapons against his party.
“We are giving them a political weapon to go against us, but they will have to lie and demagogue to make that a political weapon,” he said Sunday on Fox News.
House Minority Leader Nancy Pelosi’s (D-Calif.) office, in one of a series of attacks launched Monday, pointed to a March CNN poll in which 87 percent of respondents said they want to see federal funding increase or remain the same for Medicare.
The GOP is countering this message by arguing that reforms could save Medicare. The National Republican Congressional Committee on Monday said doing nothing would bankrupt Medicare, while reforms could let the program live on.
“I think [Ryan] will be working hard to frame his changes to mandatory programs not as cuts, but instead as changes bent on making the system more fair and more efficient,” said Becky Thiess of the liberal Economic Policy Institute.
She said that the reforms are just a disguised way of cutting the programs, and that the result will be higher out-of-pocket costs for the poor and elderly.
Ryan’s budget does not tackle Social Security even though his earlier “roadmap” would have allowed people to invest their payroll taxes in personal investment accounts.
Jon McHenry, a Republican pollster at Ayres, McHenry & Associates, said focusing on Medicare makes good political sense.
“There is no question that the rollercoaster ride the stock market has been on has injected an element of doubt that wasn’t there in 2005,” he said.
Many Republicans still have vivid memories of the spanking the party received in 2005 when President George W. Bush proposed Social Security reforms.
Republicans now believe the recession, which focused voters on cutting back personal spending, and the perception that stimulus spending failed to create jobs have changed the atmosphere for reductions, making the public more willing to accept cuts to Medicare.
Many think Ryan’s budget could also change the debate on the 2011 spending deal, which has dominated the first few months of the new Congress.
If the two sides do not reach a deal by Friday, the government could shut down this weekend. Some think Ryan’s aggressive cuts could help his party’s leaders convince more conservative House members to vote for a 2011 spending compromise that includes less than the $61 billion in cuts they are seeking, though GOP leaders on Monday continued to insist the White House must move further toward them.
Several House freshmen told The Hill last week that they are convinced the entitlement fight is the more important spending battle and that they are eager to move on. Many indicated they had been convinced by Ryan himself, who has presented freshmen with educational PowerPoint presentations.
The ensuing debate will have implications for Ryan’s own political career, too. Ryan has been talked about as a future senator or even a presidential candidate. At the same time, Ryan could also see his star diminished.
“You ask the last two Budget chairmen, [John] Spratt and [Jim] Nussle, and they’ll tell you it’s a tough job. Both of them lost elections as sitting chairmen,” said Steve Ellis of Taxpayers for Common Sense. “You have to do a lot of work, some heavy lifting and there’s no guarantee that committees or Congress will follow your guidance or leave you twisting in the wind.”