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In Focus: GOP puts Medicare,
Medicaid on chopping block

By ANDREW TAYLOR The Associated Press

House Republicans set up a politically defining clash over the size and priorities of government Tuesday, unveiling a budget plan that calls for both unprecedented spending cuts and a fundamental restructuring of taxpayer-financed health care for the elderly and the poor.

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House Budget Committee Chairman Paul Ryan, R-Wis., holds up a copy of his ‘‘Path to Prosperity” budget plan Tuesday during a news conference on Capitol Hill. Ryan’s plan would produce a $995 billion deficit next year, compared to President Obama’s projected $1.1 trillion deficit.

The Associated Press

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RYAN, SLEEVES ROLLED UP, WILL MAKE A SALES PITCH BASED ON MATH

WASHINGTON — This is the essential question for Rep. Paul Ryan: Can this man really manage the hardest sales job in American politics?

Ryan, R-Wis., is the lanky, wonky chairman of the House Budget Committee. This week, he steps into a spotlight he’s been seeking for years: point man for a historic Republican effort to reshape very popular, very expensive aid programs such as Medicaid and Medicare.

Ryan is detailing those plans as he announces his proposed budget for fiscal 2012. In a news conference Tuesday morning, he was moved almost to shouting, saying he had finally proposed a “fact-based budget.” “The sooner you act to fix it, the better off everybody is,” Ryan said, laying out the heart of an appeal for Americans to cut their own future benefits.

So far, the sales pitch appears to be classic Ryan. He will make his case with earnestness, with rolled-up sleeves, and a hope that a quiet explanation of budget math can swing the country in a way that previous politicians could not.

“We have a choice of two futures,” Ryan says in a slickly produced video released to explain his spending plan. Appearing in shirtsleeves, Ryan outlines two scenarios: rocketing debt, if the status quo is maintained, or shrinking spending under his “Path to Prosperity” plan. “It is up to our generation to pick this path,” Ryan says. “The question is: Will we do it or not?”

– The Washington Post

The plan would slash federal spending by $5 trillion or more over the coming decade. It would leave Social Security untouched but shift more of the risk from rising medical costs from the government to Medicare beneficiaries. It also calls for sharp cuts to Medicaid health care for the poor and disabled and to food aid for the poor.

Dubbed the "Path to Prosperity," the proposal by House Budget Committee Chairman Paul Ryan, R-Wis., also calls for dramatically overhauling the complicated and inefficient U.S. tax code. It would scrap numerous tax breaks and loopholes in exchange for reducing the top income tax rate for both individuals and corporations from 35 percent to 25 percent.

Democrats launched a furious counterassault on the health care proposals.

"They're ending Medicare as we know it. They take away the Medicare guarantee for seniors," said Rep. Chris Van Hollen, D-Md. "All the risk of increased costs will be borne by seniors."

A Congressional Budget Office analysis released late Tuesday also showed Ryan's budget would leave in place roughly $500 billion in Medicare cuts that were part of President Obama's new health care law. Republicans blasted those cuts in their successful campaign to take back control of the House. A spokesman for Ryan said the savings would be plowed back into Medicare.

But the GOP budget would also repeal Obama's plan to gradually close the Medicare prescription drug coverage gap, known as the "doughnut hole."

Despite its huge cuts, Ryan's plan still can't claim a balanced budget by the end of the decade because of promises to not increase taxes or change Medicare benefits for people 55 and over. After six years, annual deficits are projected to fall to the $400 billion range, enough to stabilize the nation's finances and prevent a European-style debt crisis that could force far harsher steps, Ryan said.

Under the arcane congressional budget process, the GOP plan is not actual legislation. It does provide a theoretical basis for action, but with Democrats controlling the Senate, the GOP plan serves more to frame the debate heading into next year's election than represent a program with a chance of passing Congress and becoming law.

"For too long, Washington has not been honest with the American people. Washington has been making empty promises to Americans from a government that is going broke," Ryan said. "The debt is projected to grow to truly catastrophic levels in the near future, leading to an economic collapse and a diminished future."

The GOP plan would still add $5 trillion to the deficit over the coming decade, though it promises to reach so-called "primary balance" by 2015, meaning that the budget would be balanced save for interest payments on already accumulated debt. The national debt now exceeds $14 trillion and the White House projects this year's deficit at $1.6 trillion.

Democrats said the GOP plan focused its cuts on seniors and the poor to pay for continued tax cuts enjoyed by the wealthiest.

"Everyone agrees we must cut spending and tighten our belt, but House Republicans have chosen to do so on the backs of America's seniors, not the oil companies making record profits and getting tens of billions in taxpayer subsidies," said Rep. Steve Israel, D-N.Y. "Forcing seniors to pay higher health costs is not the right way to balance our books and it's not the only way to do it."

Ryan's plan would produce a $995 billion deficit next year, compared with the $1.1 trillion projected in Obama's budget proposal. Republicans moved quickly to advance it, scheduling committee action today and a vote by the full House for next week.

The GOP plan stands in stark contrast to Obama's February budget, which attracted criticism for failing to address federal health care programs whose costs are far outpacing other inflation. Obama's budget ignored most of the most controversial recommendations of his deficit commission, such as raising the Social Security retirement age and curbing future benefit increases.

The GOP plan would fundamentally restructure the nation's biggest health programs in a bold stroke that could make Obama's insurance overhaul look like baby steps.

Obama's law expanded coverage to about 30 million people who don't have it now. Ryan's plan not only would repeal Obama's expansion, but it would recast Medicare and Medicaid, which currently help pay medical bills for some 100 million Americans.

People now 54 and younger wouldn't get to go into the same Medicare program as their parents and grandparents upon retirement. Instead, they would get a voucher-style federal payment to purchase coverage from a choice of regulated private plans.

Poor people would no longer have a right under federal law to get health care through Medicaid. Instead, Washington would send each state a lump sum to spend on medical care, nursing homes and other health services for the poor and disabled.