There's no question the United States is in financial trouble, running trillion-dollar deficits and carrying $15 trillion in debt. Reforms are necessary but where to start is the stuff of partisan brinkmanship.
The latest salvo comes from House Republicans.
Budget Committee Chairman Paul Ryan, R-Wis., submitted his "Path to Prosperity" last week. Ryan, of course, became the symbol of Medicare reform last year, accused of wanting to throw granny over a cliff. His proposal would have changed Medicare from a government-pay program to a voucher system in which the federal government would provide seniors with a stipend to help defray the cost of health insurance premiums.
The latest plan compresses tax rates to just two brackets -- 10 percent and 25 percent, collapsing the current six brackets that have a top rate of 35 percent. It also scraps the alternative minimum tax and would cut discretionary spending -- including research funds and subsidies for alternative energies -- by $19 billion.
There's just one slight problem: The non-partisan Congressional Budget Office estimates the plan would add $3.127 trillion to the deficit in a decade, assuming no changes to current law, The Hill reported.
It probably doesn't much matter. Ryan admits the spending blueprint has no chance of being signed into law even if it did squeak out of committee by one vote -- including two no votes from Republican members -- and moved toward passage by the full House.
Nevertheless, the conservative Heritage Foundation praised its approach to Medicare, which provides for a 0.5 percent of gross domestic product cap on funding and competition with the private sector, and introduces not only the voucher approach but adjustments based on income, geography and risk.
"The biggest shortcoming of the budget proposal is not starting the reforms sooner. But the market-based bidding and requirements that Medicare compete head-to-head with private plans for patients' dollars closely resembles Heritage's long-term fiscal plan, 'Saving the American Dream,'" the foundation wrote in its critique.
The conservative Republican Study Committee threw its support behind the blueprint, citing the stiff controls on welfare and Medicaid spending, The Hill reported. Rep. Mick Mulvaney, R-S.C., said he won further concessions from Ryan related to oversight.
The Conservative Club for Growth, however, wasn't happy. The club took Ryan to task for failing to balance the budget sooner and for turning off automatic spending cuts to which the White House and Congress agreed last summer as part of the deal to raise the debt ceiling.
"This budget is asking Americans to trust future Congresses to do the hard work later," said Chris Chocola, club president. "It is hard to have confidence that our long-term fiscal challenges will be met responsibly when the same Congress that passed the Budget Control Act wants to ignore it less than one year later. On balance, the Ryan budget is a disappointment for fiscal conservatives."
The White House went on the attack.
"What the Ryan plan fails to do is in any way meet the test of balance that every credible person in this debate has said must be met if we are going to deal with our fiscal challenges in the future," White House spokesman Jay Carney told reporters, adding, "We need to make sure that the effort to get our fiscal house in order -- that the burden of that effort is not borne solely by senior citizens and families with disabled children, or the poor or the middle class.
"And unfortunately, what we see in this proposal is, again, much like its predecessor, essentially a shift of money from the middle class, seniors and lower-income Americans, disabled Americans, to the wealthiest Americans -- the wealthiest among us -- $150,000 on average tax cut, additional tax cut, for the wealthiest Americans; a program that would voucherize Medicare and end Medicare as we know it, and create a system in Medicare where seniors are progressively basically priced out of the market and more and more of the burden of their own healthcare costs is borne by them, a burden that they cannot bear -- many of them.
"So it is not a plan that this president could support. It's not a plan that not just Democrats but responsible Republicans could support … . And it's not one that we think the American people would broadly support because it's not right for the economy and it's not right for the vast majority of the American people."
In a White House blog post, Jeff Zients, acting director of the Office of Management and Budget, said the Republican budget goes way beyond cutting fat.
"It is cutting deep into the muscle that America needs to compete and win in the 21st century," Zients wrote.
"On top of the roughly $1 trillion in cuts in the Budget Control Act, it would be difficult to overstate the radicalism of the domestic cuts proposed by the House budget resolution. In 2013, it would cut annual non-defense funding by 5 percent. By 2014, the resolution would cut this funding by 19 percent in purely nominal terms.
"Over a decade, the resolution would cut over $1 trillion in non-defense spending on top of the reductions the president has already signed into law. The cuts in non-defense discretionary funding are nearly three times as deep as the cuts under the so-called sequester -- cuts that we and most objective analysts have always regarded as unwise and unacceptable."
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