House Budget Committee Chairman Rep. Paul Ryan (R.-Wis.) on Tuesday released the first budget by the newly Republican-controlled House. Ryan’s budget calls for deep spending cuts and entitlement reforms in order to reduce deficits by $4.4 trillion over 10 years, compared with President Obama’s budget. The budget also repeals the costly health care law known as ObamaCare.
The Republican budget for Fiscal Year (FY) 2012, which starts on Oct. 1, will need to be negotiated to pass the Democrat-controlled Senate in order to be enacted.
“This Path to Prosperity applies America’s timeless principles to today’s greatest challenges by committing to three key goals: lifting the crushing burden of debt, fulfilling the mission of health and retirement security for all Americans, and strengthening the foundations of economic growth and job creation,” Ryan wrote in the introduction to the budget.
Ryan’s budget achieves the deficit reduction by cutting spending in discretionary and mandatory spending, including reforms in spending for Social Security, Medicare, and Medicaid. He anticipates that these measures will grow the economy, thus creating jobs and increasing revenue.
The Republican-proposed budget would cut deficits and start paying off the national debt. When Obama sent his budget to Congress in February, Ryan called it “DOA: debt on arrival,” because it would have increased the national debt by $13 trillion over 10 years. The U.S. is currently $14.1 trillion in debt and will hit the statutory debt ceiling in the next two months.
The Republicans’ $4.4 trillion deficit reduction, compared with Obama’s budget, more than exceeds the goals set by the President’s bipartisan National Commission on Fiscal Responsibility and Reform. Obama commissioned the bipartisan group to recommend a solution to the debt crisis, but he did not follow up on any of the commission’s recommendations.
Most significantly, Obama ignored all of the commission’s recommendations to reform entitlements to deal with the debt and keep the programs solvent. Now, the Ryan budget tackles entitlement reform by cutting costs and also works to sustain the programs for future generations.
Cutting Spending
President Obama’s budget for FY 12 had no cuts in spending, but only froze discretionary spending at the current bloated levels for the next five years. Ryan’s budget would cut spending by $5.8 trillion over 10 years, relative to the current policy baseline from the nonpartisan Congressional Budget Office (CBO). Of this, $1.4 trillion in savings would come from repealing ObamaCare.
Ryan sets a spending cap on discretionary spending as a percentage of the size of the economy, at 20% of the the gross domestic product (GDP). A statutory spending cap would prevent Congress from growing the size of government. Under the Democrats’ control of Congress and the White House, government spending has risen to almost 25% of the GDP. And under Obama’s proposed budget for FY 12, discretionary spending goes up to 25.3% of the GDP.
A spending cap as a percentage of the size of the economy has been embraced by House and Senate Republicans as a way to rein in government spending in anticipation of the vote to raise the debt ceiling.
Both chambers included a spending cap as a percentage of the GDP in their recent Balanced Budget Amendment (BBA) proposals. The Senate BBA, which has the support of all 47 Republicans, has a spending cap of 18%. A BBA in the House introduced by Rep. Bob Goodlatte (R.-Va.) has the support of 126 Republicans and the sets spending at 20%.
The Ryan budget would bring spending back to 2008 levels, which was part of the House Republicans’ “Pledge to America.” The lower spending levels would be kept intact for five years. Cuts in government spending would come from all areas of the government, and focus on eliminating duplicate programs and outdated programs, and cutting earmarks. The plan would include $78 billion in cuts to the huge Pentagon budget in areas where Defense Secretary Robert Gates has found inefficiencies.
Entitlement Reform
Republicans were outraged that Obama’s budget did not even attempt to address the need to reform mandatory entitlement programs to deal with the debt crisis.
In contrast, Ryan’s budget takes entitlement programs head-on, which is a risky move, leaving the Republicans open to Democrats using the hot-button issue for political gain. Ryan made it clear that his plan would not affect anyone under 55 years old, and that the entitlement programs will still increase every year under his budget. His goal, however, is to cut the huge spending on these programs while reforming them so that they do not go bankrupt.
For Medicare, Ryan has the most drastic reform, shifting the program in 2012 from one run by the government to putting seniors on private insurance plans. The plan would change Medicare into what he calls a “premium support system,” in which seniors pick among the private insurance plans offered, and the government subsidizes the plans directly. His plan, though, would give increased assistance to the poor or very sick.
Ryan’s budget would reform Medicaid to save $771 billion over 10 years, compared to the CBO baseline. His plan is to give the states block grants for their federal matching dollars in order to give them more flexibility in running the mandated program.
The ObamaCare law has increased the number of people on Medicare rolls and the costs to the states, which are already struggling to balance their budgets in the down economy. Governors have asked Congress to give them the 50/50 match in Medicaid funding without the regulations of the mandates.
The food stamp program would also get similar reforms, so that states do not get increased funding for adding more people to the rolls.
For Social Security, Ryan’s budget lacks specifics, except to say that the budget forces action by the House, Senate, and President to ensure solvency of the program. Although the budget is clear that Social Security for anyone under 55 years old would not be affected by this, it is such a hot-button issue for seniors that the GOP seemingly is looking for bipartisan political cover before getting into specific reforms.
Tax Reform
The Republican budget would not raise taxes nor create new taxes (as Obama’s budget does), but instead lowers taxes and reforms the tax code to encourage economic growth.
Ryan’s plan would lower the top income and corporate tax rates from 35% to 25%. The budget would also simplify the tax code, consolidate brackets, and close loopholes.
By repealing ObamaCare, the budget prevents approximately $800 billion in tax increases.
The Budget Process and the Current Mess
By law, the President must send a proposed budget to Congress every year for the following fiscal year to set government spending levels and his priorities. The House and Senate then confer on their own budgets to finalize a budget that sets the top-line spending levels for each government department. The budget top-line number is then used by the Appropriations Committee to determine cuts or increases in funding for specific government programs.
Last year, the Democrat-controlled Congress did not pass any budget for the first time since the budget process was established in 1974. Because the Democrats did not pass a budget, they also did not pass any appropriations bills to set spending for Fiscal Year 2010.
As a result of the Democrats’ inaction, the U.S. government is currently being funded by a series of Continuing Resolutions (CR). The original three-month CR, which was negotiated by Senate Minority Leader Mitch McConnell (R.-Ky.) and Obama in December, froze spending at 2010 levels. In February, the House Republicans passed a CR that cut spending by $61 billion and funded the government through Sept. 30. However, the Republican CR failed to pass the Senate, and the Senate Democrats did not pass their own spending bill.
While the two parties have negotiated the spending for the current fiscal year, they have relied on short-term CRs to keep the government funded. The Republicans demanded that each short-term CR cut spending by $2 billion a week, which now totals $10 billion in cuts.
Obama, Senate Majority Leader Harry Reid (D.-Nev.), and Speaker of the House John Boehner (R.-Ohio) have been negotiating for weeks over how much spending to cut in a CR for the next six months, and must resolve it by April 8 to avoid a government shutdown.
The negotiations are going on behind closed doors, but Republican leaders have said that the stalemate is over Senate Democrats’ refusal to make real spending cuts this year.
“If the government shuts down, it will be because Senate Democrats failed to do their job. The Senate hasn’t passed a single bill to keep the government running or offered a credible plan to make real spending cuts. The House has,” Boehner said on Monday evening.
via The GOP Budget a Bold Move to Tackle the Debt Crisis – HUMAN EVENTS.
Paul Ryan’s Budget Gives Medicaid Block Grants to States – HUMAN EVENTS | Emily Miller
House Budget Committee Chairman Paul Ryan (R.-Wis.) said that his new budget for Fiscal Year 2012 will give Medicaid funds to states in the form of block grants. In an interview with “Fox News Sunday,” Ryan said that the governors have said that they need more flexibility in dispersing the funds to their varied states’ populations.
“We propose block grants to the states. We’ve had so much testimony from so many different governors saying, ‘Give us the freedom to customize our Medicaid programs, to tailor for our unique populations in our states.’ We want to give governors freedom to do that,” Paul said on Fox.
The Medicaid entitlement program’s cost is split 50/50 between states and the federal government. President Obama’s new health care law includes provisions to drive more people onto the Medicaid health system. The unfunded federal mandate in ObamaCare has resulted in an increased cost to already strained states budgets. The nation’s governors, who have to work within their states’ balanced budget resolutions, have been looking for solutions to deal with the red ink flowing from ObamaCare.
In an interview with HUMAN EVENTS last week, Mississippi Gov. Haley Barbour, said that he had told the congressional Republicans that he would take less federal money for Medicaid in exchange for more flexibility.
“If they would give us a block grant, we would be willing to limit the amount of our Medicaid payments from the federal government because, if we had total flexibility to run the program, we would save a lot of money,” Barbour said by phone.
Barbour said that currently his state budget has the cost of Medicaid under control. Mississippi has the highest match rate for Medicaid, receiving about $3 from the federal government for every $1 spent. Barbour, who is also the chairman of the Republican Governors Association, said that his appeal to Congress for block grants seeks to save everyone money.
“My costs are pretty well under control right now. But if I could have total flexibility to run Medicaid in Mississippi, then I am confident that for a five-year period, we could take one-half of the increase we would otherwise get—meaning one-half of the national increase—and come out better for the taxpayers and better for the beneficiaries,” Barbour told HUMAN EVENTS. Barbour also told Congressional Republicans that said he would accept less federal money in exchange for more flexibility in Medicaid federal funds.
“I told the House Energy and Commerce Committee that I would agree to a multi-year deal. In return for total flexibility, we would limit the increase by one-half of the total amount of federal funds paid to Mississippi. So if nationally the Medicaid federal matching went up by 8%, we would pay 4%. If it went up 4%, we would pay 2%, because we are so confident that we can run it, and frankly have a better program, but for less money,” said Barbour.
In Virginia, Gov. Bob McDonnell cut $6 billion in his state’s budget, and had a budget surplus of more than $400 million in only six months. Still, McDonnell said that the increased size and cost of Medicaid “is a budget buster for Virginia and really every state.”
McDonnell, in an interview a week ago with HUMAN EVENTS, said that “with various components of the Medicaid law at the federal level, we’ve had the Medicaid spending level grow 1,600% over the last 27 years. In that period of time, it’s gotten 5% of the state budget to now 21% of the budget.”
“And after ObamaCare, Medicaid will grow another $2 billion by the year 2022 and will be anywhere from 27% to 28% of the budget. So this is just one of those unsustainable programs,” said McDonnell.
McDonnell also said that the mandates in the health care law make it difficult for him to control Medicaid costs.
“Unfortunately, this ObamaCare bill not only adds more spending, but it really hamstrings the governors with these maintenance of effort requirements, these eligibility requirements. But you really can’t do anything creative or entrepreneurial or try to reduce Medicaid spending in your states,” McDonnell said. “So it’s a bad situation, and the federal government doesn’t seem interested at this point in giving us the tools to control the costs.”
In Texas, Medicaid has a 9% annual growth rate, which will increase under ObamaCare. According to Texas Gov. Rick Perry’s office, ObamaCare will add an additional 2 million people to Medicaid by 2012, costing Texas upwards of $27 billion over 10 years.
“This administration and liberals in Congress continue to push maintenance of effort [MOE] requirements on states,” Perry’s spokeswoman Catherine Frazier e-mailed HUMAN EVENTS. “Under ObamaCare, states have little ability to manage their Medicaid and CHIP [Children’s Health Insurance Program] budgets because of the MOE requirement.”
Texas has already been forced to make up an estimated $9.1 billion to cover increased caseload growth and cost from the unfunded federal mandates from ObamaCare and Obama’s stimulus bill.
“These federal health care reform mandates are taking away resources that could instead go toward other programs important to Texans,” said Perry’s spokeswoman. “Medicaid is unsustainable both for states and the federal government.”
On Tuesday, Ryan will formally unveil the details of the first budget put forth by the newly Republican-controlled Congress. Ryan told Fox that the new budget will reform all entitlement programs, cut spending more than $4 trillion over 10 years, and put in place a statutory spending cap as a percentage of GDP.
Ryan conceded that the entitlement programs will still increase every year under his budget, however the programs will be reformed so they can be sustained.
“Medicare and Medicaid spending will go up every single year under our budget. They just don’t go up as much as they’re going right now, because they’re growing at unsustainable rates,” said Ryan. “And that’s why we’re coupling them with key reforms that are proven to stretch that Medicare, Medicaid dollar farther.”
Ryan was asked by Fox’s Chris Wallace whether the House Republicans’ plans to reform and cut spending on entitlement programs would play into the Democrats’ hands for the 2012 election.
“We are. We are giving them a political weapon to go against us. But they will have to lie and demagogue to make that a political weapon,” answered Ryan. “We save Medicare, save Medicaid. We save these entitlement programs. We repair our social safety net, and we get our country a debt-free country for our children and grandchildren’s generation.”
via Paul Ryan’s Budget Gives Medicaid Block Grants to States – HUMAN EVENTS.
Undisclosed Jackson Lab Process May Halt Project | James Pat Guerrero
Collier County Commissioner Tom Henning calls for an emergency meeting to stop all action on the Jackson Laboratory project. Apparently, the County is wasting its staff’s time and taxpayers’ resources. Mr. Henning refers to a letter that Arthrex, Inc., received that explains that the Maine-based laboratory hasn’t even completed its application to get its project approved by Gov. Charlie Crist in time by January 4, 2011 to receive the $50 million of state funds needed by March 1, 2011. The $50 million would return to the state’s general budget because it’s highly unlikely the approval will come through in time to receive them. This private information that Jackson Laboratories was behind in the application process in time to begin construction on March 1, 2011 had been undisclosed until Arthrex sued and discovered the process status in the county circuit court challenging on how the proposed state funding was constitutional. “The process [was exempted] from disclosure through state public records requests.”
For more reading: Collier commissioner calls for special meeting to end county support of Jackson Lab » Naples Daily News.
Tom Coburn Has Medicare Fraud in His Sights | RedState
When it comes to solving the multi-billion-dollar challenge of Medicare and Medicaid fraud, Oklahoma Senator (and physician) Tom Coburn has led the way in calling for innovative approaches to fraud prevention. Now he’s introduced legislation focused on addressing the problem. It may not go anywhere in this Congress, but expect it to get a lot of consideration early next year.
The Herald recommends: State House District 112 – Editorials – MiamiHerald.com
The Herald recommends: State House District 112 – Editorials – MiamiHerald.com.
Now, let’s analyze this Miami Herald recommendation, which rather glosses over the facts and pastes its liberal intent. First, a liberal newspaper is supporting the most liberal Nunez for District 112. This is what is called “status quo.” The facts are that James Patrick Guerrero has the most conservative responses of all the Republican candidates for District 112 … it’s just that those responses are not acceptable to the Miami Herald. Medicaid/Medicare can not be resolved by Nunez. Nunez worked for Jackson Memorial but really had not helped Jackson Memorial in Medicaid improvements. Nunez seemed to have been more of the systemic problem of the high cost of Medicaid and Jackson Memorial’s fiscal management problems. Is not the same type of response occurring at Kendall Regional, i.e., more high cost Medicaid? A lobbyist or not (Nunez worked for a major lobbyist), Nunez does not stand on any Republican conservative point; she waffles. This is a sign of liberalism. And, Nunez had a lot of practice doing that while working for a previous major lobby group. Let’s face it, lobbyists represent special interest groups, and what good is changing viewpoints to support special interests, while basing on shifting sand. Nunez is not worthy because of inexperience, liberalism, and no real developed leadership. James Patrick Guerrero is the “To Be Real” conservative, experienced, and leader-worthy for District 112.
ThursdayMan | el hombre del jueves 
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