Budget Chairman Ryan Projects Balance Through $5 Trillion in Spending Cuts, Medicare Shift

Posted March 10, 2013 at 11:26am

The House Republican budget will balance the budget over 10 years in part by cutting spending by about $5 trillion and turning Medicare into a premium support program, Rep. Paul D. Ryan said Sunday.

The Wisconsin Republican, whose previous budget resolutions have been signposts for GOP economic policy priorities, said the fiscal 2014 plan that he will release Tuesday will not need to make dramatic changes from previous proposals because of improved economic circumstances.

“We always got close to balancing the budget but not quite there,” the House Budget Committee chairman said on “Fox News Sunday.”

Ryan said the budget proposal will get $600 billion in additional revenue from higher taxes in the fiscal cliff law (PL 112-240) and would cut the rate of spending growth by about $5 trillion over 10 years.

He said spending would grow at 3.4 percent per year over the next decade, rather than the current 4.9 percent.

As in previous years, Ryan’s plan would change Medicare into a premium support program for people currently under age 55. Under that system, beneficiaries would receive a set amount of money from the government to buy coverage through private insurers or traditional Medicare.

According to lawmakers and staff members, Ryan had considered bringing people closer to the Medicare eligibility age into the premium support program but ultimately stayed with maintaining the current program for those 55 and older.

Ryan’s budget proposal also would repeal the 2010 health care overhaul (PL 111-148, PL 111-152), but it would maintain the law’s $716 billion in Medicare cost cuts. That became a controversial point during the 2012 presidential race when Ryan, as the Republican vice presidential nominee, criticized the Obama administration for the projected cuts in Medicare spending.

Ryan said he would use those Medicare savings to help the program, rather than to fund the health care law.

“We say we get rid of Obamacare, we end the raid and we apply those savings to Medicare to make Medicare more solvent and extend the solvency of the Medicare trust fund,” he said.

The proposal also would turn Medicaid into a block grant system in which states get more flexibility to tailor the programs. Ryan criticized the health care overhaul’s expansion of Medicaid eligibility as “reckless,” saying some providers are already refusing to accept people on the program.

“By repealing Obamacare, and the Medicaid expansions which haven’t occurred yet, we are basically preventing an explosion of a program that is already failing,” he said.

Ryan said the budget proposal also would consolidate several government job-training programs into flexible grants for states and would change qualifications for the food stamp program.

The House Budget Committee will mark up Ryan’s budget proposal on Wednesday. The Senate Budget Committee is expected to bring out a competing resolution under Chairwoman Patty Murray, D-Wash., during the coming week, but no schedule for considering of that plan has been announced.

Paul M. Krawzak contributed to this report.