So now it's out, the reckless, extreme budget proposals of Rep. Paul Ryan (R-IL) and he is proposing to cut $6.2 trillion in government spending over ten years compared to the president's FY2012 budget.
On taxes, Ryan proposes a simplified tax system with a top income tax rate of 25 percent.
Of course, We'll have the numbers up on usgovernmentspending.com later today, so you can compare, function by function, the Ryan budget with the president's budget, but it looks to me that the big items are:
- Punt on Social Security. Ryan has no proposal for Social Security. He just says that "in the event Social Security is not sustainable, the President, in conjunction with the Board of Trustees, must submit a plan for restoring balance to the fund."
- Change Medicare for younger workers. "Medicare will provide a Medicare payment and a list of guaranteed coverage options from which recipients can choose a plan that best suits their needs." There will be "additional assistance" for low-income folks and those with "greater health risks".
- Block grant Medicaid and Food Stamps Medicaid will be converted into a "block grant tailored to meet each state's needs, indexed for inflation and population growth." On food assistance: "Convert... SNAP into a block grant tailored to each state's low-income population, indexed for inflation and eligibility beginning in 2015".
- Turn job programs into scholarships. "Consolidate... job-training programs into more accountable career scholarships". Also return Pell grants to pre-stimulus levels.
- Lower Tax Rates. Return taxes to 18-19 percent of GDP, and reduce top federal income tax rate on individuals and corporations to 25 percent. Remove many "tax expenditures."
It's a bold program, and we'll see what happens to the politics in the next few days.
The big takeaway is that there is no proposal on Social Security. And, as I have written, there is no need. Social Security will rise from the present 5ish percent of GDP to a 6ish percent of GDP over the next 30 years. Thus there is no playing with the Third Rail. The big problem is health care entitlements, Medicare and Medicaid, and that is where Ryan has big proposals for reform.