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House GOP Unveil Latest Ryan Budget

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Money (Source: MyTV33)

Money (Source: MyTV33)

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WASHINGTON (CBSMiami) – The Republican Party put its cards on the table Tuesday morning with a new budget plan from Representative Paul Ryan that would end much of Medicare as it’s known today and cut deep into domestic programs and almost completely eliminate the current tax structure.

It’s a big gamble in a politically charged election year, especially with a swing state like Florida being home to so many citizens who depend on Medicare and many other domestic programs.

House Republicans said the proposal, which pairs deep domestic spending cuts with large tax cuts for wealthy Americans, will let the nation eliminate deficits by the year 2040.

The plan includes proposals to slash spending on Medicaid, food stamps, Pell Grants for college, and numerous other programs that help maintain the social safety net in the country, according to the Washington Post.

Ryan’s plan proposes to fundamentally end Medicare as it’s currently known and switch it over to a voucher-type system which could end up increasing the out-of-pocket costs for seniors and low income residents who utilize Medicare.

The new GOP plan will offer a traditional Medicare style program, but Republicans envision people switching over to the voucher-system to help save more money in the budget. Ryan’s plan also plans to hold spending on Medicare to GDP + 1 percent, but that will eliminate much of his long-term savings.

Previously, the GOP budget pegged spending on Medicare and Medicaid to inflation, but that left beneficiaries the responsibility of having to pay any difference in costs that might come in a given year.

Ryan’s budget will cut spending in 2013 $19 billion below the agree-upon $1.028 trillion in spending that was agreed to by Democrats and Republicans during last summer’s negotiations over raising the debt ceiling.

The tax code changes could be one of the GOP’s biggest lifts in the new budget. The GOP budget document proposes changing the current regressive tax structure to have just two tax rates, 10 percent and 25 percent.

But, Ryan’s proposal could blow a hole in the deficit because so far, it’s not been revealed who would pay what rates and what, if any, tax loopholes would be closed. That means tax breaks, like the child tax credit or the mortgage interest deduction, could be sacrificed to get to the proposed levels.

Democrats in the Senate said the budget was dead on arrival, much in the same way President Barack Obama’s budget was dead on arrival in the Republican-controlled House as well.

Both parties will have to come to an agreement on various levels of the budget, but given the politically toxic situation in Washington and the fact that it’s an election year, the budget debate could be especially brutal in 2012.

One issue that both parties will have to address immediately is proposed across-the-board spending cuts that will be enacted after neither party could agree to cut $1.2 trillion in cuts over the next decade. The cuts will total $55 billion from the military and $43 billion from non-defense programs.

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