Ryan’s $5 trillion cuts set midterm debate

Rep. Paul Ryan (R-Wis.) on Tuesday unveiled a budget that proposes to cut $5.1 trillion over a decade in a bid to erase the federal deficit, setting the stage for another election-year battle over the size of government and the future of Medicare and Medicaid. 

The nearly 100-page blueprint will likely be the last formal budget proposal from Ryan, the Republican chairman of the House Budget Committee, who wants to move to the more powerful Ways and Means Committee next year. [READ BUDGET HERE.]

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Ryan is handing his fellow Republicans a campaign platform in November, but Democrats will again try to turn it into a political weapon by casting the GOP as a party of austerity whose aim is to gut the social safety net.

The former vice presidential nominee released his proposal over the private misgivings of some in his party and despite having struck a bipartisan budget agreement in December that sets spending levels for the next fiscal year.

Ryan defended that decision on Tuesday afternoon, saying he was adhering to the GOP’s stated desire to present alternatives to President Obama’s policies, not just a sustained critique.

“We believe it is not enough for us to just be an opposition party. We need to be a proposition party,” Ryan told reporters.

Still, the release of this year’s proposal was notably more low key than in previous years. Ryan did not hold a press conference or do a round of TV interviews promoting his budget. Instead, he circulated the proposal on Tuesday morning and held a conference call with reporters several hours later.

Ryan pointed out that the budget is “very similar” to the proposals he has written each of the last three years. But he highlighted the increases he calls for in defense spending, which amount to $273 billion more than President Obama proposed in his budget and nearly a half trillion dollars more than the current budget path over a decade.

“The president does not provide the resources necessary to meet our national security strategy. His cuts would do grave harm to our military,” Ryan said.

“We think this is irresponsible. We think it’s too bad that President Obama is taking another step back, and so we will show a clear contrast on where we think we ought to go on protecting national defense.”

If Ryan’s budget in 2014 was similar to his previous proposals, so was the Democratic reaction. Rep. Chris Van Hollen (Md.), Ryan’s counterpart on the Budget Committee, labeled it a “declaration of class warfare.”

This year’s proposal, Van Hollen told reporters Tuesday, is “the worst … that we’ve ever seen.”

“It’s a direct attack on job creation, [and] it’s a recipe for America’s economic decline,” he said, referring to the plan’s domestic spending cuts. “Our economic competitors — those in China, those in Europe — will be popping their champagne bottles if we adopt this particular budget, because it’s a surefire way to undermine our global economic competitiveness.”

While Ryan repeated his proposals to overhaul Medicare and Medicaid, he shied away from offering or endorsing specific plans to rewrite the tax code, replace ObamaCare or reform anti-poverty programs. The budget did not adopt the major tax reform plan from Rep. Dave Camp (R-Mich.), after Ryan said Camp asked him not to include it, because it was only a draft that did not represent the position of the full Republican conference.

And Ryan said he would introduce anti-poverty proposals on his own later this year, instead of including them in the party’s budget.

The lack of specificity underscores the GOP’s reluctance to adopt major new proposals in an election year, as well as the party’s struggle to unify around a way forward on tax reform or healthcare, where a replacement for the Affordable Care Act is still in the works.

While Ryan adheres to a bipartisan budget agreement that set a $1.014 trillion spending cap for fiscal 2015, he proposes deeper cuts to discretionary accounts after that in order to keep the GOP’s promise to balance the budget within 10 years. 

House Republicans are having a tougher time finding the votes to pass Ryan’s plan this year than in previous years, in part, because he sticks to that roughly $1 trillion spending level for 2015, which 62 conservatives opposed in December. And because of a worsening long-term deficit outlook from the Congressional Budget Office, Ryan had to cut deeper to achieve balance and, for the first time, he used a friendlier economic projection method known to some as “dynamic scoring” to help make the numbers work. That move drew sharp criticism from Democrats, who said it was a “gimmick” that showed Republicans could not succeed in erasing the deficit, even with dramatic spending cuts.

Even so, Ryan’s fourth framework as Budget Committee chairman contains broad similarities to last year’s effort to revamp tax and spending programs, which was opposed by 10 House Republicans. The GOP can lose 16 votes this time around, assuming all Democrats continue to oppose the Ryan budget.

Ryan on Tuesday voiced confidence the budget would secure the needed support from Republicans, despite any reservations.

“Our colleagues, who we have visited with frequently, are pleased to support this budget because of its overall goals,” he said. “The good clearly outweighs any other concerns that they had.”

Ryan notes in the budget that spending would continue to increase over the next 10 years under his plan but at a slower pace than it is currently on. While current spending is projected to increase annually by 5.2 percent, the Ryan budget would slow that to 3.5 percent. 

The proposal contains Ryan’s now-familiar plans to partially privatize Medicare through an option premium support system, while block-granting Medicaid to the states.

One significant omission is familiar from Ryan’s previous budgets: immigration reform. While the president’s budget calls for an overhaul of immigration laws as a way to strengthen the economy and reduce the deficit, Ryan does not touch an area that remains divisive in his party, despite his own personal push for the issue over the last year.

Mike Lillis contributed.

 

RYAN BUDGET DETAILS

SPENDING

• Cuts $5.1 trillion over 10 years to erase federal deficit

• Counts $175 billion in savings from broader economic projection method known as “dynamic scoring”

 

MEDICARE

• Converts to an optional “premium support” system for people aged 54 and younger as of 2013

• Redirects $700 billion in ObamaCare cuts to Medicare Advantage toward deficit reduction

 

MEDICAID

• Converts program to block grants for the states

• Repeals expansion in ObamaCare

 

TAX REFORM

• Calls for overhaul of tax code that collapses seven individual income brackets into two and lowers top corporate and individual rates

• Does not endorse Rep. Dave Camp’s (R-Mich.) tax reform proposal

 

DEFENSE

• Returns Pentagon spending to pre-sequester levels by 2017

• Spends $273 billion more than in President Obama’s budget over 10 years

• Spends $483 billion more than current path over 10 years

 

OBAMACARE

• Repeals the law

• Calls for replacement but does not include specifics

 

WELFARE

• Turns Supplemental Nutrition Assistance Program into block grant for states

• Incorporates and expands on reforms in farm bill

• Does not detail new anti-poverty program

 

BANKING

• Cuts funding for Dodd-Frank Wall Street reform law

 

ENERGY/ENVIRONMENT

• Cuts spending for programs combating climate change

• Calls for expanded domestic oil production

 

TRANSPORTATION

• Eliminates operating subsidy for Amtrak

• Cuts funding for Transportation Security Administration

• Says highway trust fund spending should be aligned with revenue but does not propose new revenue source

 

IMMIGRATION

• Does not address