Republican budget would slash domestic programs and increase military spending

By Reuters
Tuesday, April 1, 2014 12:02 EDT
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Rep. Paul Ryan (R-WI) speaking at CPAC in 2011. Photo: Flickr user Gage Skidmore, creative commons licensed.
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By David Lawder

WASHINGTON (Reuters) – Representative Paul Ryan, the leading Republican voice on budget policy, rolled out a new fiscal blueprint on Tuesday that calls for deep cuts in domestic programs, increased defense spending and a goal of erasing annual deficits in 10 years.

Ryan’s budget, called the “Path to Prosperity,” has almost no chance of passing the Democratic-controlled Senate but is expected to serve as a campaign manifesto for Republicans in November’s congressional elections.

It proposes to kill President Barack Obama’s 2010 healthcare reforms and revives cuts in social programs such as the popular Medicare entitlement for the elderly that Ryan, who chairs the House Budget Committee, has proposed in other recent budgets.

The plan calls for savings of $5.1 trillion over a decade, with the goal of reaching a balanced budget by 2024 with no new tax revenues but increased defense spending.

Nearly $2.1 trillion would be saved over a decade by the proposal to kill Obamacare, according to the plan.

A sweeping overhaul of Medicare has been slightly revised, with phased-in changes applying to workers 55 years old and younger, compared to last year’s proposal which affected workers who were 54 and younger.

The document aims to bolster Republicans’ credentials as the party of fiscal prudence, but could open them up to fresh attacks from Democrats, who are calling for steps to reduce the gap between the rich and poor.

While the plan mostly adheres to discretionary spending limits for fiscal 2015 set in a deal negotiated last year by Ryan, the 2012 Republican vice presidential nominee, and Democratic Senate Budget Committee Chairman Patty Murray, it shifts funding from domestic programs toward defense thereafter.

In fiscal 2016, for example, Ryan’s plan would add $43 billion in defense spending and deduct that amount from non-defense budgets. In 2021, it would add $54 billion in military spending and subtract $95 billion from domestic programs.

Subsidies for Amtrak, a national rail service that is a perennial target for Republicans, would be eliminated, and some education programs would be cut.

The budget proposes to save $732 billion in the Medicaid health care program for the poor by changing its structure to one in which states receive a lump sum payment known as a “block grant” to pay for health coverage.

Other social programs such as food stamps, housing subsidies and income assistance to needy families also would face cuts and new work requirements, reducing spending by an additional $966 billion over 10 years.

(Reporting by David Lawder; Editing by Paul Simao)

[Image via Gage Skidmore, Creative Commons licensed]

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