House Budget Committee Chairman Paul Ryan released a budget Tuesday that says that balances the budget in 10 years. Ryan invited President Obama and Senate Democrats to come together and share their ideas on how to balance the budget.
The major new development: the last Ryan plan would balance the budget, producing a small surplus in 2023 - a goal not achieved primarily through spending cuts deeper, but with the addition of more than $ 3.2 billion in new tax revenues.
The tax increase is already in force. Ryan (R-Wis.) simply adopts new revenue projections set by the Congressional Budget Office following a year-end agreement to raise taxes on incomes over $ 450,000. But the impact on your budget is huge.
Last year, Ryan, the 2012 GOP vice presidential candidate and chairman of the Budget Committee of the House, proposed big tax cuts that would leave the government taking in $ 37 billion in revenue over the next decade. This year, Ryan adopted a 10-year CBO projection of $ 40.2 trillion in revenues, an increase that lets end the deficit despite spending would grow slightly compared with last year's proposal.
Ryan has recognized the tax increase, which would raise up to 19.1 percent of the collections of the national economy, with oblique references to the CBO "baseline" and the end of the year "tax cliff" fight.
"We do not want to refight the tax cliff. That is the current law," Ryan said when asked about tax increases on "Fox News Sunday." "That will not change."
But the tax increase, combined with the change from one year forward in the 10-year budget window, again produces more revenue than the estimated $ 600 million that the tax treatment would increase in the next decade. Ryan presenting his budget plan, offers an opinion piece published Tuesday in the Wall Street Journal, makes no reference to the cause of their achievement prosecutor.
"On Tuesday, we are introducing a balanced budget in 10 years - without raising taxes. How We Do We stop spending money the government does not have," Ryan writes, adding that he intends to cut $ 4.6 trillion in the next decade compared to the current legislation to match spending with available revenue.
Conservatives complain - the influential Red State blog calls the new Ryan plan "flawed" because it "uses Obama tax hikes to balance" - but, so far, seems resigned to his decision. Democrats are crying foul even as Senate leaders prepare a preliminary draft budget itself would add about $ 1 trillion in new tax revenue cliff.
Republicans, meanwhile, sees the demand for a balanced budget as a powerful new message that overshadow its decision to accept tax increases and give them a fresh edge as they begin another month dance with Democrats to face swollen national debt and raise the federal debt limit later this year.
"We owe the American people a balanced budget," Ryan writes in the introduction to his project spending 91 pages. "The least we owe to foreign creditors over we will control our future."
Ryan proposal, which includes a spending plan of $ 3.5 trillion for the fiscal year starting in October, not end deficit immediately. The gap between spending and revenues in 2014 would be reduced by less than $ 100 billion, from $ 616 million under current law to $ 528 billion.
But Ryan quick projects savings thereafter, mainly from cuts to health care, representing more than half of their total savings. In total, Ryan would reduce spending on Medicare, Medicaid and new subsidies for affordable health care act by $ 2.7 trillion over the next decade. Another $ 700 billion in savings would come from lower interest payments on the national debt lower.
Ryan proposes to cut another $ 1 billion of "other" mandatory programs, including agricultural subsidies, food stamps, student loans and pensions for federal workers, although he does not explicitly detail the cuts. And reduce spending by the agency of $ 250 billion beyond the automatic sequester cuts that took effect this month, while the restoration of $ 500 billion to the Pentagon. That suggests that the unprecedented cuts to domestic agencies, but Ryan, again, no details.
As it did last year, Ryan does not make explicit proposals to control spending on Social Security, instead of calling the White House and Congress to develop separate proposals to "shore up the Social Security trust fund."
And again calls for fundamental reform of the tax code to eliminate the proliferation of tax exemptions and collapse the current confusion in only two tax brackets: a maximum rate of 25 percent and a rate below 10 percent. But the tax rewrite would not generate fresh revenue to reduce the budget deficit.
With $ 41.5 trillion in spending over the next decade and $ 40.2 trillion in revenue, the Ryan budget would add about $ 1.2 trillion to the national debt. But borrowing deficit and contraction could reduce cause reduced debt as a percentage of the economy. When a $ 7 billion surplus emerges in 2023, Ryan predicts that the Treasury would have to pay $ 14.2 trillion to foreign creditors (compared with 11.8 trillion today), or about 55 percent of gross domestic product (in compared to about 76 percent today).
During a news conference on Capitol Hill Tuesday, Ryan defended his decision to keep tax increases and other controversial pot of savings - about $ 700 billion in Medicare cuts enacted to help pay for Obama's health initiative. Ryan and other Republicans excoriated cuts during last year's presidential campaign.
By defunding Obamacare, Ryan said his budget ensures savings will strengthen Medicare, rather than financing a vast new entitlement for the uninsured. As for tax increases, he said, his budget would maintain revenues, but replace the underlying tax system with a simpler code.
"We still believe that with the revenue line that we have, we still have a very good tax code competitive internationally," said Ryan.
Democrats criticized the proposal. In addition to increased taxes, Ryan said the proposal includes deep cuts in new federal employee pensions and two years of spending caps on agency to achieve the goal of a balanced budget.
"The Republican budget is totally unbalanced," said Rep. Chris Van Hollen (Md.), the ranking Democrat on the Budget Committee of the House. "They say they are" reigniting the American dream '- but only for those who have been successful, while others suffocation. For the vast majority of working Americans, just makes it more difficult to ends meet. "
The press secretary of the White House Jay Carney said Ryan mathematics "makes no sense" and that his budget plan exempts wealthy Americans to make no sacrifice at the expense of the middle class.
"Deficit reduction that asks nothing to the wealthiest Americans has serious consequences for the middle class," Carney said in a statement. "By choosing to give the wealthiest Americans a tax cut again, this budget as written or fail to achieve a significant reduction in the deficit, raise taxes on middle-class families more than $ 2,000 - or both . If you choose not to ask for a penny of deficit reduction to close tax loopholes for the rich and well connected, this budget identifies deep cuts in investments, such as education and research - fundamental investment for job creation and the growth of the middle class. And to save money, this budget would become Medicare into a voucher program undercutting guaranteed benefits that seniors have earned and force them to pay thousands more from their own pockets. We tried this approach top to bottom before. President continues to believe that is the wrong way to America. "
Ryan plans to put his plan to a vote in the Budget Committee of the House in the coming days. House leaders predict will easily win the support of enough Republicans to win approval by the full House before the Easter holidays.
The chairman of the Senate Budget Committee Patty Murray (D-Wash.) is working on his own project, the first budget of the Senate since 2009. This framework proposes to replace the kidnapping with $ 1.85 trillion in savings over the next decade alternating, evenly split between tax increases and spending cuts.
Murray budget would be based on the Senate Finance Committee to identify $ 975 billion in tax increases by closing loopholes that corporations and the rich benefit. Of $ 975 billion in spending cuts, about $ 500 billion would come from national programs, including $ 275 billion in savings from federal health programs. Another $ 240 billion would come from the Pentagon, and $ 240 billion more would come from lower interest payments.
His proposal also includes $ 100 billion in fresh spending on infrastructure, education and job training to boost the sluggish economy and help people find jobs.
If the budget is Murray passed the Senate, Congressional leaders see a conference committee-Murray Ryan is the most likely forum for negotiations on a new deficit reduction package. In recent days, Obama has begun an aggressive outreach campaign to build support among Senate Republicans for a "balanced" package of tax increases and spending cuts, a campaign that will continue this week as Obama travels to Capitol Hill on Tuesday, Wednesday and Thursday separate meetings with rank and file Democrats and Republicans in each chamber.
In the introduction to his budget, Ryan seemed to anticipate, and even welcome the opportunity for compromise, in sharp contrast to the combative tone he adopted last spring, when a Republican takeover of the House and Senate seemed a possibility real.
"Last year, Americans chose a divided government. So this year, we have to make it work," wrote Ryan. "We offer this budget in recognition of that need - and will do so in a spirit of good".
.jpg)
.jpg)
