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WASHINGTON — Representative Paul D. Ryan of Wisconsin on Tuesday will lay out a tough, election-year budget that purports to come into balance by 2024, in large part through steep cuts to Medicaid and food stamps and the full repeal of President Obama’s health care law, just as millions begin to see its benefits.
But even with those cuts, Mr. Ryan, the House Budget Committee chairman, is counting on a boost of economic growth to balance the budget, a boost he says will be gained by reducing the deficit. Many economists believe such dramatic spending cuts — especially those affecting the poor — would have the opposite effect, slowing the economy and lowering tax receipts.
“This budget stops spending money we don’t have,†writes Mr. Ryan, the Republican party’s vice-presidential nominee in 2012 and a possible presidential contender in 2016. “A balanced budget will foster a healthier economy and help create jobs. This will ensure the next generation inherits a stronger, more prosperous America.â€
The budget resolution, which will be formally adopted by Mr. Ryan’s committee on Wednesday, will serve more as a 2014 Republican campaign manifesto than a legislative agenda. Spending levels for this fiscal year and next were fixed into law in the budget plan approved in December.
Senate Democrats do not intend to draft their own budget, and if Republican leaders cannot muster the 217 votes to pass the Ryan plan, it may never come to a House vote. Those votes would not be easy to get. Democrats will oppose it almost unanimously, and some Republicans may shy away, too — either because it does not cut spending enough or it cuts it too much.
Still, the plan — Mr. Ryan’s third comprehensive spending and tax blueprint — will set the battle lines for the midterm elections. Democrats have launched a pre-emptive attack on it, while most Republicans are ready to embrace its ambitious policy prescriptions.
“Is this year’s House Republican budget, with its even more extreme budget cuts, really just a bad April Fools’ Day joke?†asked Representative Steny Hoyer of Maryland, the House Democratic whip.
The budget violates some tenets that both parties have tried to observe since the budget fights of 2011 and 2012. Those fights preserved a practice of cutting defense and nondefense programs almost equally while sparing the poorest Americans from the worst of the belt-tightening.
Mr. Ryan’s plan dispenses with such niceties.
In his plan, military spending through 2024 would actually rise by $483 billion over the spending caps established in the 2011 Budget Control Act “consistent with America’s military goals and strategies,†while nondefense spending at Congress’s annual discretion would be cut by $791 billion below those strict limits.
In all, Mr. Ryan says, spending would be cut by $5.1 trillion over the next decade. More than $2 trillion of that would come from repealing Mr. Obama’s health care initiative, the Affordable Care Act, a political move that has become much more difficult with the closing of the first enrollment period. As many as 10 million Americans have gotten health insurance through the law, either through private policies purchased on insurance exchanges, through expanded Medicaid or private policies purchased through brokers but subsidized by the law.
As with past budget proposals, Mr. Ryan seeks to eliminate the Affordable Care Act’s Medicaid expansion, then turn the health care program for the poor into block grants to the states — saving $732 billion over the decade. He would also cap and block-grant food stamps, starting in 2020, cutting that program by $125 billion in five years. The budget relies on imposing new work requirements on food stamp and welfare recipients.
Such an approach “empowers recipients to get off the aid rolls and back on the payrolls,†Mr. Ryan writes.
Mr. Ryan renews his controversial call to eventually convert Medicare to a “premium support†program whereby seniors could receive subsidies to purchase private insurance instead of taking the government’s fee-for-service coverage. Mr. Obama and other Democrats savaged that proposal in 2012, but Republicans said they had little choice but to renew it.
“The Medicare plan is the same. The conference has already voted on it twice,†said Representative Reid J. Ribble, Republican of Wisconsin and a budget committee member.
The savings from that Medicare change barely show, since the new voucher system would not be available to retirees before 2024. Medicare would still be cut by $129 billion over the next 10 years.
But the toughest cuts would come from domestic programs that have already been reduced steadily since 2011, when Republicans took control of the House. Mr. Ryan’s 2024 domestic spending figure would be lower in nominal dollars than such spending was in 2005. Adjusted for inflation, it would be a 29 percent cut from today’s levels, and 28 percent below the average level of Bush administration spending.
Mr. Ryan does not shy away from hot button issues. Federal subsidies for the National Endowments for the Arts and Humanities, as well as the Corporation for Public Broadcasting “can no longer be justified,†he says.
All funding would be eliminated for the Clean Technology and Strategic Climate Fund, set up to combat global warming, because such efforts are “not a core U.S. foreign policy function.â€
Amtrak subsidies and AmeriCorps would be eliminated, along with money for biological and environmental research at the Energy Department’s science laboratories.
Mr. Ryan again calls for a dramatic overhaul of the federal tax code but, pointedly, does not adopt the detailed proposal laid out in February by Representative Dave Camp, Republican of Michigan, the Ways and Means Committee chairman. Mr. Ryan says the individual income tax system should have just two rates, 25 percent and 10 percent, while the corporate tax rate should be set at 25 percent.
Mr. Camp tried to adhere to those same rules, but after three years of effort, he found he had to impose an additional 35 percent marginal tax rate on most types of income earned by affluent Americans if his tax reform was to raise the same amount of revenue as the existing tax code.
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