House Republican budget would slash $5.8 trillion over the next decade

House Republicans on Tuesday unveiled their 2012 budget proposal, a document they hope will rebrand the GOP as the party of sensible solutions to government overspending with leaders willing to make hard choices.

The budget outlined by budget committee chairman Rep. Paul Ryan (R-Wis.) takes considerable political risks -- particularly in its proposal to remake Medicare and Medicaid, the core of the social safety net for the poor and elderly.

But Ryan also passes on other politically dicey solutions to reducing deficits and debt. His plan all but dodges changes to Social Security, an area Ryan acknowledged Tuesday was more ripe for bipartisan agreement. The plan offers no measures that would increase revenue. And Ryan acknowledged that it would not produce a balanced budget until some time in the 2030s.

Instead, the budget resolution is largely reliant on cuts and entitlement reforms to slash $5.8 trillion in spending over the next decade. If compared to President Obama's spending plan, the reduction would jump to $6.2 trillion.

Ryan freely admits he's taking a sizable gamble — and dragging his party along with him — by going after entitlements, a proven American political minefield. But he said he wants to use the proposal to engage the Obama administration in a debate about how to solve the nation's fiscal woes.

"This is not a budget, this is a cause," Ryan said Tuesday, a dozen of his House colleagues at his side. "We can all do something else with our lives. We are here to fix this country's problems.

"We cannot keep fearing what the other party can do to us if we try to solve this problem," he said.

With their bid to radically downsize the federal government, Ryan and the GOP have provocatively taken Washington's fiscal battle to an entirely new level, one that likely will play out into the 2012 elections.

In doing so, House Republicans hope Americans will reward their party for having the temerity to take on bedrock entitlement programs as part of an effort to shrink the size of government. But Democrats already have pounced on Ryan's efforts, charging he's out to endanger the nation's most vulnerable.

The chances of Ryan's budget becoming law as written are virtually nil, as it seems engineered to be as unpalatable as possible to the Democrats who control the Senate. The plan repeals Obama's healthcare law, a nonstarter for Democrats in both chambers.

"Pulling the rug out from under seniors who have paid into Medicare and Social Security their entire lives is wrong, and extreme plans that dismantle benefits seniors have earned will not pass the Senate," said Sen. Debbie Stabenow (D-Mich.).

But the coming conflict over two disparate visions of the federal government's role in American lives could make the current fight over the 2011 budget look like just so much small change. If Republicans are truly committed to Ryan's blueprint, then an impasse over next year's budget at some point appears almost inevitable.

Senate minority leader Mitch McConnell (R-Ky.) praised Ryan on the Senate floor Tuesday.

"Congressman Ryan is presenting a plan, in other words, to address our most pressing problems head-on at a moment when the president and other Democrat leaders simply refuse to do so themselves," McConnell said. "Anybody can say that our nation's problems need to be addressed — but history will show that Chairman Ryan is one of those who actually stepped up to do it."

Ryan has been a longstanding proponent of entitlement reform, and Democrats tried last year during the congressional midterm elections to impart his views to the entire GOP. For the 2012 elections, it seems that effort won't be as necessary as the House Republican leadership appears to fully support Ryan's plan.

That plan would transform Medicare from a government insurance program to one in which seniors would chose from private, federally subsidized coverage. Americans 55 and older would stay in the current system.

It would radically reshape Medicaid, the program in which states and the federal government split the cost of providing health coverage to low-income Americans, by turning it into a block-grant program in which states would design their own Medicaid programs.

It would eliminate funding for the president's healthcare initiative and clean energy programs. It caps domestic outlays and attempts to ensure that federal spending can constitute no more than 18% of the nation's gross domestic product.

"This brings the size of government down and enforces it with a cap," Ryan said.

It seeks to maintain the George W. Bush-era tax cuts, currently set to expire at the end of 2012, and it would also reform the tax code, consolidating tax brackets and lowering the top rate for individuals and corporations from 35% to 25%.

The document does not offer detail on such tax reforms, including which corporate tax breaks might be eliminated. Ryan has said such a decision will be left to the Ways and Means Committee.

But while Ryan has talked about the need to revamp Social Security, his document is similarly short of specifics, even as it suggests that at some point the eligibility age should be raised. The plan suggests that if Social Security became insolvent, the president and Congress would be forced to come up with a plan. It offers no details beyond that.

Acknowledging that other entitlement reforms were unlikely to find bipartisan support, Ryan said his approach on Social Security was an attempt to "set the table" for discussions.

"Social Security is the area in which I hope we still have bipartisan agreement, so what we're trying to do in this budget is advance that idea," he said.

When asked why he wasn't more aggressive in cutting defense spending, which constitutes about one-fifth of the federal budget, Ryan said Defense Secretary Robert Gates had identified almost $180 billion in savings by reducing inefficiency.

"We think Bob Gates is doing a pretty good job," Ryan said.

Ryan's plan did not go far enough to please the most conservative wing of his own party.

A spokeswoman for Sen. Rand Paul reminded reporters that the Kentucky Republican had come up with his own budget plan.

"It remains the only congressionally introduced budget plan that actually balances the budget, and in five years, at that," said Moira Bagley, Paul's spokesperson.

kathleen.hennessey@latimes.com

james.oliphant@latimes.com

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