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Ryan unveils House GOP budget claiming balance

Published on NewsOK Modified: April 1, 2014 at 4:31 pm •  Published: April 1, 2014

As in the past, Ryan has steered clear of cuts to Social Security, and he promises steady increases for veterans and restoration of looming defense cuts. But he faced a more challenging task to promise to balance the budget by decade's end than he did last year because the CBO projects lagging revenue estimates.

Steep cuts to Medicaid, which Ryan proposes to turn into a block grant program managed by the states, could drive millions of people from the program, including seniors in nursing homes and children from low-income households. Ryan proposes to cut projected costs of Medicaid by 17 percent over the decade. It also contains sharp, unexplained cuts to a category including refundable income and child tax credits for the working poor and Supplemental Security Income for the elderly, disable and very poor.

"This dog-eat-dog budget is nothing short of an assault on Americans struggling to stay afloat economically," said Rep. Chris Van Hollen, D-Md.

Ryan's budget claims balance by 2024, but relies on $74 billion in savings in that year from the macroeconomic effects of cutting deficits, which the CBO says would have a long-term positive effect because it would free up savings and investment capital. Democrats are sure to seize on the maneuver as phony math; without these projections, Ryan's budget plan would fall almost $70 billion short of balance.

Van Hollen noted that Ryan's plan only achieves balance by claiming $2 trillion in Obamacare cuts and revenues over the decade — even as Republicans promise to repeal the law in its entirety.

"They've reduced the deficit by getting rid of the things that help people in the Affordable Care Act but they claim balance by keeping all of the revenues and the Medicare savings," Van Hollen said.

It also reprises a failed strategy from last year to cut domestic agency operating budgets and shift the money to the Pentagon after the Ryan-Murray deal expires next year. When Republicans tried that last year, the House was unable to pass the follow-up spending bills implementing the cuts.

Earlier versions of Ryan's plan have passed the House three times since the GOP seized control of the chamber following the 2010 midterm elections. This year's version may prove more controversial because it begins to implement cuts to future Medicare beneficiaries. Under the plan, people who enroll in Medicare in 2024 would be given a subsidy — dubbed "premium support" by Republicans, derided as a voucher system by Democrats — with which they would purchase health insurance on the open market.

Republicans say the system is required to prevent the budget from spiraling out of control as more and more baby boomers retire and the present system collapses and that the redesigned Medicare program would offer seniors more choices and curb costs. Critics, however, say the Medicare subsidies won't keep up with inflation and will require sharply higher out-of-pocket costs for future seniors.