Republicans to Seek $4.6tn Budget Cuts
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Republicans are set to unveil a conservative budget on Tuesday that would slash government spending by $4.6 trillion over a decade and balance the budget by 2023 without any new taxes.
On Tuesday, Paul Ryan, chairman of the House budget committee and former Republican vice-presidential nominee, will for the third consecutive year present a conservative fiscal package that will require only “modest policy changes” to balance the federal budget in 10 years.
Republicans are set to unveil a conservative budget on Tuesday that would slash government spending by $4.6 trillion over a decade and balance the budget by 2023 without any new taxes.
On Tuesday, Paul Ryan, chairman of the House budget committee and former Republican vice-presidential nominee, will for the third consecutive year present a conservative fiscal package that will require only “modest policy changes” to balance the federal budget in 10 years.
Previewing the Republican budget strategy in a Wall Street Journal op-ed, Ryan said his proposal calls for the U.S. government to spend a total of about $41 trillion through 2023, a 3.4 percent annual increase.
That compares to the current spending trajectory of $46 trillion over 10 years, a 5 percent annual increase.
“Because the U.S. economy will grow faster than spending, the budget will balance by 2023 and debt held by the public will drop to just over half the size of the economy,” Ryan wrote.
“We’re offering a credible plan for all the country to see. We’re outlining how to solve the greatest problems facing America today. Now we invite the president and Senate Democrats to join in the effort,” he added.
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Achieving balance at around 19.1 per cent of gross domestic product has long been a goal of Republican lawmakers and activists seeking to limit the size and scope of the government.
According to the Congressional Budget Office, federal spending in 2013 is expected to be roughly 22.2 per cent of the economy, while revenues are 16.9 per cent of output. In a decade, revenues are forecast to grow to 19.1 per cent of the economy, but spending is expected to increase to 22.9 per cent of GDP, according to the CBO.
But Obama and Senate Democrats are likely to dismiss the House Republican budget as an extreme document that seeks deep cuts into U.S. social and welfare programmes, while leaving untouched spending on defence and tax hikes on the wealthiest Americans and corporations.
As in previous years, Ryan’s budget includes a controversial overhaul of the Medicare health plan for the elderly, transforming it into a voucher-like system under which seniors receive a subsidy to pay for their health coverage from either a private plan or a government scheme. According to Ryan, his budget proposal is centred on the assumption that Obama’s health care law will be repealed – a highly unlikely scenario.
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Senate Democrats will for the first time in four years release their own competing budget – which is expected to include a mix of spending reductions and tax rises – on Wednesday afternoon. President Obama will follow with his own fiscal blueprint later this month or in April.
