2012 Republican Vice-Presidential Nominee
U.S. Representative from Wisconsin
Ryan position on the Budget
Ryan first burst into national prominence in May 2008 following the introduction of his Roadmap for America's Future Act of 2008 (H.R.6110). The proposal was a landmark budget proposal that was anchored to the concept of fiscal conservatism and small governance. Credited by some as the primary instrument in the reshaping of mainstream and Congressional Republican conservative fiscal ideology, it was also embraced wholeheartedly by the nascent tea party movement.
The Act proposed to reform federal health care, Social Security, the tax code and the budget process. The proposed bill, however, failed to gain enough traction among Congressional GOP leaders and subsequently failed to move past the House Committee on Ways and Means and the House Budget Committee. The latter proved to be especially surprising, as by then, Ryan was the ranking Republican member in the committee. Nevertheless, the proposal unexpectedly propelled Ryan into a leadership position among Congressional Republicans.
In January 2010, Ryan released a revised version of his Roadmap (H.R.4529), which focused on tax reduction and privatization of Medicare and Social Security. Two days after the release of H.R.4529, President Barack Obama called the plan “as an entirely legitimate proposal,” while speaking to Ryan during a Q&A session at a Republican Congressional retreat in Baltimore. The bill once again fell during the committee stage, failing to move out of six House committees (Education and the Workforce, Energy and Commerce, Rules, Budget, Judiciary and Ways and Means).
Nonetheless, the proposal solidified Ryan’s leadership of the party’s fiscal conservatives, and in 2011, he leapt ahead of his more established Republican colleagues to become the chair of the House Budget Committee.
Ryan re-introduced a modified version of the Roadmap once again the following year. This time, the Wisconsin Representative’s bill, H.CON.RES.34, not only cleared the committees, it also passed the House (235-193). However, the legislation failed to pass the Senate (40-57).
Remarkably, the plan received some stinging criticisms from some Republicans, most notably from former Speaker of the House Newt Gingrich, who termed it as “radical” and likens it to “right wing social engineering.” But the plan had already captured the hearts and minds of the majority of Republicans in the country, and it received the backing of almost all prominent members of the party, as well as conservative opinion makers. After almost four years, Ryan has almost single-handedly reinvented the fiscal ideology of the Republican Party.
In March 2012, Ryan introduced a new version of his plan, and the H.CON.RES. 112 was passed by the Republican-controlled House six days later (228-191). As anticipated, the bill was defeated in the Democrat-controlled Senate (58-41).
Following the bill’s defeat, Ryan prepared a new plan for 2013, one that was aimed at charting and focusing the party’s collective effort towards next year’s budget proposal, in tandem with the 2012 presidential election. The plan, named The Path to Prosperity: Restoring America's Promise (though more frequently referred to as the Ryan Plan), consists of these major elements:
♦ Providing for the Common Defense
• Provides $554 billion for national defense spending for the next five years, bringing it back to pre-2008 levels.
• The defense budget is slated to be cut by $55 billion, or 10 percent, in January of 2013 through the sequester mechanism enacted as part of the Budget Control Act of 2011. This reduction would be on top of the $487 billion in cuts over ten years proposed in President Obama’s budget.
♦ Restoring Economic Freedom
• Federal Budget: Cut $5 trillion from the federal government budget over the next 10 years
• Reduce federal spending from the current 24% to 20% of GDP by 2015.
• Repeal Dodd-Frank.
• Winding down government guarantees and subsidies for Fannie Mae and Freddie Mac, with an eye towards its eventual elimination
• Pell Grants: Cut back to pre-2008 levels
♦ Repairing the Social Safety Net
• Healthcare: Repeal President Obama’s controversial Affordable Care Act
• Medicaid: Shift the federal share of Medicaid to the states, by providing states with block grants that are indexed for inflation and population growth
• Supplemental Nutrition Assistance Program (Food stamps): Shift the federal share of SNAP to the states, by providing states with block grants that are indexed for inflation and population growth
• Medicare: Privatized, voucher based; pegged at GDP+1%
♦ Pro-Growth Tax Reform
• Tax: Slashing income taxes to 10% and 25% by cutting all tax deductions.
• Prevents the Bush tax cuts from expiring in 2013, making the cuts permanent.
• Repeal the Alternative Minimum Tax - reduces the corporate tax rate from 35 percent to 25 percent
♦Lifting the Crushing Burden of Debt
• Relative to President Obama’s budget, the Ryan budget estimates more than $3 trillion in lower deficits over the next ten years.
• The non-partisan CBO estimates that this budget will balance and begin to produce annual surpluses by 2040, and it will start paying down the national debt thereafter.
Ryan’s proposal to convert the current structured Medicare benefits into a fixed, albeit unformulated, voucher program raises concerns over its flexibility and coverage. There are questions about how these vouchers will fulfill the varying levels of health care required by individuals.
The plan also does not directly address the cost issue of Medicare. It merely sends the management of Medicare to state level via block grants, and idealistically forecast that market forces will ultimately bring the cost of health care down – despite historical data that conflict with the assertion.
♦ Spending cuts
There are concerns over the plan’s proposed nondefense budget cuts over the next decade and thereafter. The Center on Budget and Policy Priorities argues that “a deficit-reduction plan that lacks significant revenues would almost certainly deeply cut federal funds that support states and localities,” and the “Ryan budget would heavily shift costs to states,” and in the process, facilitate “deep cuts in funding for a wide range of other state and local services.”
The Center projects that the plan would
• cut federal funding for the federal-state Medicaid program by 34 percent by 2022
• cut non-defense “discretionary” (i.e. non-entitlement) funding by 22 percent in 2014 and later years… About one-third of this category of funding goes for grants to state and local governments to support services that states and localities provide, such as education, law enforcement, water treatment facilities, and disaster response.
• would reduce discretionary state and local grants to an estimated 0.6 percent of GDP, less than half the average of the last 35 years.
“Cuts of such magnitude would force states and localities to reduce the quality and reach of their basic public systems - their schools, clean water facilities, and law enforcement activities, for example — or raise new revenue or cut other programs to continue meeting these needs. Either way, the result would be a huge cost shift from the federal government to states and localities.”
Source: Center on Budget and Policy Priorities
♦ Federal Budget Deficit
Despite the plan’s extreme nature, the CBO projects that the federal budget would only be balanced in 28 years (by 2040). In addition, there are also questions on the specific details of the plan’s proposed cuts, which was not incorporated into Ryan’s Path to Prosperity.
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