Economics: A Conservative Vision, with Bipartisan Risks

[Paul Ryan's 2012 budget plan] plan rolled out by the Republican majority in the House figures to shake up this year's already contentious budget debate as well as next year's presidential politics. By its mix of deep cuts in taxes and domestic spending, and its shrinkage of the American safety net, the plan sets the conservative parameter of the debate over the nation's budget priorities further to the right than at any time since the modern federal government began taking shape nearly eight decades ago.

Because details remain sparse, the Congressional Budget Office could not estimate precisely the potential savings for Mr. Ryan's plan, which the Republican-controlled House Budget Committee is expected to approve Wednesday. House Republicans say the budget would cut $5.8 trillion from projected spending in the 10 years through the 2021 fiscal year, and $6.2 trillion more than Mr. Obama's budget would. But the Republican projections could not be independently confirmed. Longer term, the budget office said, the plan would allow the government to run a surplus by 2040.

The Ryan plan, [a White House statement] said, “cuts taxes for millionaires and special interests while placing a greater burden on seniors who depend on Medicare or live in nursing homes, families struggling with a child who has serious disabilities, workers who have lost their health care coverage, and students and their families who rely on Pell grants.”

“The president believes there is a more balanced way to put America on a path to prosperity,” the statement said.

Administration officials gave no hint that Mr. Obama planned to spell out that balanced approach. The 10-year budget he outlined in February did not tackle the fast-growing entitlement costs — for Medicare, Medicaid and, to a far lesser extent, Social Security — that are driving long-term projections of the debt. While proposing major changes to Medicaid and Medicare, Mr. Ryan also declined to propose changes to Social Security, reflecting Republicans' wariness of alienating older voters.

Like the Bowles-Simpson fiscal commission and other bipartisan groups, Mr. Ryan would eliminate many, though unspecified, income tax breaks to generate greater federal income. But unlike the other groups, he would use the new revenues only to lower tax rates to a maximum 25 percent for individuals and corporations, down from 35 percent. Again, details would be left to the appropriate legislative committees. The other deficit study groups would devote some revenues to reducing deficits.

For more, see A Conservative Vision, with Bipartisan Risks by Jackie Calmes, April 5, 2011 at NYTimes.com.