House Budget Committee Chairman Budget PlanMarch 20, 2012
House Budget Committee Chairman Paul Ryan (R-Wis.) has released his proposed FY 2013 federal budget. It would dramatically reduce the federal deficit by reducing federal spending levels compared to FY 2012 in the years FY 2013-2015 and substantially reducing the growth rate in federal spending thereafter. Federal outlays would stand at $4.9 trillion in FY 2022 compared to $3.6 trillion in FY 2012. The deficit would be $797 billion in FY 2013, $496 billion in FY 2014 and $304 billion in FY 2015.
Compared to the President’s budget, FY 2013 spending would be reduced by $187 billion to $3,530 billion. Spending over ten years would be $5.3 trillion less than the President proposed in his budget, and revenues would be $2 trillion less than the President proposed over ten years. Ten year deficit spending would be $3.3 trillion less than the President proposed over ten years.
The Pentagon budget would be set at $554 billion for FY 2013 compared to the President’s proposal of $525 billion.
The plan would reduce out-year Medicare outlays by adopting a premium support program for workers currently under the age of 55. Under the plan, a Medicare Exchange would be established where seniors would purchase private health plans. The second-least expensive approved plan or fee-for-service Medicare, whichever is least expensive, would establish the benchmark that determines the premium support amount for the plan chosen by the senior. If a senior chose a costlier plan than the benchmark plan, he or she would be responsible for paying the difference between the premium subsidy and the monthly premium.
Conversely, if that senior chose a plan that cost less than the benchmark, he or she would be given a rebate for the difference. Payments to plans would be risk-adjusted and geographically rated. Private health plans would be required to cover at least the actuarial equivalent of the benefit package provided by fee‐for-service Medicare. Fee-for-service Medicare would remain an option.
The plan contains the outline of a tax reform plan developed by Ways and Means Committee Chairman David Camp (R-Mich.) which would:
• Consolidate the current six individual income tax brackets into just two brackets of 10 and 25 percent.
• Reduce the corporate rate to 25 percent.
• Repeal the Alternative Minimum Tax.
• Broaden the tax base to maintain revenue growth at a level consistent with current tax policy and at a share of the economy consistent with historical norms of 18 to 19 percent in the following decades.
• Shift to a “territorial” tax system.
It is not specified what “tax subsidies” would be repealed to pay for these initiatives.
To read the House Budget Committee’s summary of the proposed budget, click here.
To read five pages of Tables summarizing the proposed budget, click here.
The 99 page budget explanation is available here.
To read the proposed concurrent resolution (i.e. the proposed statutory language), click here.