Ryan touts $5T in savings in his budget

| Sunday, March 10, 2013, 9:48 p.m.

WASHINGTON — House Budget Committee Chairman Paul Ryan said his 2014 budget proposal to balance the government's books in a decade assumes the repeal of Democratic President Obama's health care law and would slow annual spending growth to 3.4 percent.

The proposed budget that will be introduced this week will save about $5 trillion over 10 years, about the same amount that two previous Ryan budgets had proposed saving by 2040, the Wisconsin Republican said on “Fox News Sunday.”

Ryan, the Republican vice presidential nominee in 2012, said new tax revenue of more than $600 billion that Congress and the president agreed to in January will help achieve a balanced budget in 10 years.

“Instead of growing spending at 4.9 percent” annually, “we grow spending 3.4 percent,” so “the result is a $5 trillion” cut in the increase of spending over 10 years, he said.

Ryan's plan assumes that the Democratic-controlled Senate joins the Republican-run House in repealing the health care law that is set to be implemented next year. Ryan said his plan would save $770 billion over 10 years by taking money designated for expanding Medicaid, to provide more insurance to low-income people, and give it to states as block grants to “customize” coverage.

“By repealing Obamacare and Medicaid expansions that have not yet occurred, we are preventing the explosion of a program that is already failing,” Ryan said.

The health care law would expand Medicaid to cover people with incomes of as much as 133 percent of poverty. The federal government would pay the expansion's entire cost until 2017 and 90 percent after that.

Some states with Republican governors or legislatures have balked at agreeing to the expansion of the Medicaid program, which is financed by state and federal funds. Eight Republican governors seeking re-election next year, including New Jersey's Chris Christie and Ohio's John Kasich, have proposed the Medicaid expansion in their states.

Still, the House wants to “give the states the tools they are asking for” to “make these benefits work for their populations,” Ryan said.

His proposed budget would end the health-care law's “raid on Medicare” and use the money — $716 billion over 10 years — to shore up the Medicare trust fund, Ryan said. The program is projected to be insolvent by 2024.

“Obamacare does damage to Medicare,” he said.

The non-partisan Congressional Budget Office said in a 2012 letter that Medicare spending would increase by $716 billion by 2022 if Congress repealed the health care law.

Ryan said his budget, like his plan last year, would propose giving new Medicare beneficiaries, now younger than age 55, the option of purchasing private insurance with a government subsidy instead of the traditional Medicare plan.

The blueprint Ryan and his panel are set to propose puts him at loggerheads with Obama, with whom he had lunch March 7.

“We come from very different perspectives,” Ryan said.

Obama has reached out to Republicans in an effort to forge a deal on spending and entitlement overhaul. The president also dined March 6 with about a dozen Republican senators.

One of the senators at the dinner, Tom Coburn of Oklahoma, said he was optimistic that Obama is “tremendously sincere” about tackling the long-term spending issues posed by entitlements.

“I don't think this is just a political change in tactic,” the Republican said on NBC's “Meet the Press.”

Ryan said that Obama's depiction of Republican spending proposals as “draconian cuts” to “impugn people's motives” hasn't helped his relations with Republicans in Congress. “If that kind of rhetoric resumes, then we will know” that the outreach “was for show,” he said.

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