The Ryan Budget Spends $5.3 Trillion Less Than The Obama Budget Over The Next Decade


Here’s a chart, via James Pethokoukis, comparing the debt trajectories for the Obama budget and the Paul Ryan budget, which was just released this morning:

Most of the debt savings come from Medicare reforms, which Pethokoukis explains:

Where Obamacare relies on unelected bureaucrats to keep costs down, the Ryan path uses competition. Under Ryan’s revised “premium support” plan – essentially the Wyden-Ryan proposal — seniors beginning in 2023 could use their Medicare dollars to choose from a menu of private plans, along with Medicare’s traditional fee-for-service system. Every year there would be a competitive bidding process among all plans to determine the dollar amount of the federal contribution that seniors would use to purchase coverage. (The benefits in the private plans would have to be as least as good as Medicare.) The second least-expensive approved plan or Medicare, whichever is least expensive, would establish the benchmark that determines the premium support amount.

Seniors who prefer pricier plans would have to pay the difference between the premium subsidy and the monthly premium. Seniors who choose a less expensive plan could pocket the difference. As a backup — and so CBO could score the plan — per capita costs could not exceed nominal GDP growth plus 0.5%.

The Ryan budget also has massive tax reform, going to a two-rate system for individuals: 25% for the upper tax brackets, and 10% for the lower tax brackets. It also sets a flat rate for corporate taxes at 25% (the top tax rate is currently 35%). These tax reforms are likely to inspire a good deal of economic growth, though the tax revenues for that growth (per CBO rules) aren’t calculated for. So when you see numbers for revenues and deficits under Paul Ryan, you can assume that the real numbers if the policies are implemented would be even better.

There are some problems with the plan, though. It doesn’t address Social Security. It doesn’t get specific on which tax deductions/credits go and which stay. But as a place to start a debate over the nation’s budget, it’s better than where Obama and the Democrats are at.

Here’s Ryan making the pitch for his budget in video:

Rob Port

Rob Port is the editor of In 2011 he was a finalist for the Watch Dog of the Year from the Sam Adams Alliance and winner of the Americans For Prosperity Award for Online Excellence. In 2013 the Washington Post named SAB one of the nation's top state-based political blogs, and named Rob one of the state's best political reporters.

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