Ryan Budget Would Cut $6 Trillion

The New York Times reports:

House Republicans on Tuesday unveiled a far-reaching budget proposal that cuts $5.8 trillion from anticipated spending levels over the next decade and is likely to provide the framework for both the fiscal and political fights of the next two years.

The ambitious plan, drafted principally by Representative Paul D. Ryan, the Wisconsin Republican who chairs the Budget Committee, proposes not only to limit federal spending and reconfigure major federal health programs, but also to rewrite the tax code, cutting the top tax rate for both individuals and corporations to 25 percent from 35 percent, reducing the number of income tax brackets and eliminating what it calls a “burdensome tangle of loopholes.”

The proposal arrives in the midst of an intensive struggle over this year’s budget, with a real chance that an impasse could lead to a shutdown of much of the federal government starting this weekend. Congressional leaders were meeting on Tuesday morning with President Obama at the White House, and federal officials were taking steps to arrange an orderly shutdown of many government operations should no compromise emerge, and Republicans in Congress were offering a brief reprieve to keep the government open for one more week — but only if Democrats would accept another cut of $12 billion from the current year’s spending.

On Tuesday morning, as Speaker John A. Boehner made his way to the White House, the other leaders of his Republican conference held a terse news conference in which they announced that the White House had already rejected their short-term offer, and suggested that prospects for a compromise were dimming. "The White House has increased the likelihood of a shut down," said Eric Cantor, the House majority leader. Mr. Cantor said that the House leaders had not decided whether to actually move forward on its short-term plan, but that they would continue to press for significant cuts. "We are changing the dynamic here," he said.

“This budget improves incentives for job creators to work, invest and innovate in the United States,” said a summary of the proposal, which Republicans are calling the “Path to Prosperity.”

The introduction to the proposal said the spending blueprint disavowed what it called the “relentless government spending, borrowing and taxing that are leading America, right at this moment, toward a debt-fueled economic crisis and the demise of America’s exceptional promise.”

Republicans say their proposal would reduce the size of the federal government to 20 percent of the overall economy by 2015 and 15 percent by 2050 while President Obama’s plan introduced this year would not hold the size of government below 23 percent of economic output.

Democrats, however, say the emerging proposal amounts to a conservative ideological manifesto showing that Republicans intend to cut benefits and programs for the nation’s retirees and neediest citizens while protecting corporate America and the wealthiest people from paying their share of taxes. They will be certain to challenge the budget plan and make its bold efforts to reshape Medicare and Medicaid — the health care programs for older Americans and the poor — a theme of their political argument to regain control of the House and hold the White House in 2012.

The budget resolution is not a binding law even if approved by Congress; if adopted, it would direct the relevant Congressional committees to draft spending legislation putting in place its dictates. Because Democrats control the Senate, the proposal is unlikely to be adopted. Even so, it will become the marker for Republican economic policy and Republican lawmakers and candidates are likely to be tested on where they stand on its many components.

Republicans say their driving goal in the budget is to avoid what they see as a coming national debt crisis, which the budget describes in terms that portray rising federal debt as a dire threat to the well-being of the United States. The budget warns that the amount the nation owes will soon be greater than the entire economy.

“This is not the future of a proud and prosperous nation,” the budget says. “It is the future of a nation in decline — its best days come and gone.”