House Budget Committee Chairman Paul Ryan today released a budget plan that promises to cut projected deficits by more than $1.6 trillion over the coming decade. While this is a serious and commendable effort, the plan’s policy mix is unlikely to attract bipartisan support.
To its credit, the plan includes substantial savings from Medicare and Medicaid, programs that account for much of the projected growth in the federal budget. A key question: Are the proposed cuts in Medicare and Medicaid sustainable for patients, providers and state governments?
Ryan’s budget would reduce outlays, revenues and deficits compared to either the President’s budget or the Congressional Budget Office baseline. However, even with dramatic domestic spending cuts, debt held by the public would remain higher in terms of GDP than it is today – and higher than recommended by various bipartisan commissions.
Ryan takes an important step towards sensible tax policy by recognizing the need to close loopholes and broaden the tax base. But his plan fails to use any of the savings for deficit-reduction; that misses an opportunity to build bipartisan consensus.
Ryan also fails to look for substantial defense savings and offers no specific proposals to reform Social Security, even though the reform options are actually much clearer for Social Security than they are for Medicare and Medicaid.