Ryan Says Congress Should Aim for ‘Down Payment’ on Deficit

Tuesday, 19 Mar 2013 01:34 PM

 

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House Budget Committee Chairman Paul Ryan said the most lawmakers can hope for for this year is reaching a budget deal that amounts to a “down payment” on deficit reduction.

In an interview with Bloomberg Television, Ryan said there is room for compromise over issues such as Medicare, where he said limited changes could be made that “don’t offend either party’s political philosophy” and can nevertheless “generate big savings.”

Aside from his proposal to partially privatize Medicare, his budget plan calls for incremental changes such as charging wealthier beneficiaries higher premiums, something President Barack Obama has also endorsed.

Ryan, a Wisconsin Republican, reiterated his party’s opposition to additional tax increases, saying lawmakers already raised tax rates on top earners’ income as part of a January budget deal.

“We want to get a down payment on deficit and debt reduction,” he said. “We think that’s good for the economy, we think that’s good for the credit markets, we think that’s good for confidence — and that is where we hope to end up at the end of the day here. We understand the president’s not going to take all of our entitlement reforms.”

He also said he expects the House on March 21 to pass a stopgap spending measure, now being considered in the Senate, to avert a government shutdown. Current funding expires March 27.

‘Key Question’

Obama’s recent contacts with Republicans are “refreshing” though most question “is it sincere and lasting, and only time will tell,” Ryan said. The 2012 Republican vice presidential candidate said he hasn’t met with Obama since they had lunch earlier this month, though they’ll see each other at an event with Ireland’s prime minster.

The House this week is set to consider the latest version of Ryan’s annual budget plan. It calls for balancing the government’s books through about $4.6 trillion in spending cuts.

Ryan’s plan would make new cuts in domestic “discretionary” spending next year, on top of the automatic cuts that began March 1. Once inflation is taken into account, his proposal would roll that portion of the budget — which pays for medical research, education, parks and other programs — back to about 2001 levels.

Medicaid Cuts

It also calls for requiring food-stamp recipients to work, significantly cuts Medicaid funding and freezes the maximum Pell college tuition grant. It proposes an overhaul of the U.S. tax code that would trade lower rates for fewer individual tax preferences. By 2023, Ryan’s budget plan anticipates the government would show a small surplus.

Senate Democrats plan this week to take up a competing proposal that’s mostly focused on shifting the $1.2 trillion in cuts that have begun taking effect. It would replace the automatic cuts with a combination of tax increases for top earners and spending cuts.

The two chambers “are worlds apart” on the broader fiscal issues, said Ryan. That would mean Congress would go without a budget for a fourth consecutive year.

© Copyright 2014 Bloomberg News. All rights reserved.

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