TOPICS > Politics

Rep. Paul Ryan Offers ‘Opening Bid’ on Budget Plan

March 12, 2013 at 12:00 AM EDT
House Budget chair Rep. Paul Ryan put forth a blueprint which he says would cut the federal deficit by $4.6 trillion over the next 10 years. Democrats dismissed the proposal, saying the math doesn't add up. Nancy Cook of National Journal joins Jeffrey Brown to explore the politics and math behind Paul's budget bid.
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JUDY WOODRUFF: The latest fiscal fight in Congress formally began today, the process of trying to adopt a budget for the fiscal year that begins in October.

House Republicans went first. Senate Democrats go tomorrow. Neither side is likely to win many converts across the aisle, but, for now, it’s all about spelling out political differences.

NewsHour congressional correspondent Kwame Holman begins our coverage.

REP. PAUL RYAN, R-Wis.: We believe that we owe the American people a balanced budget. And for the third straight year, we have delivered. In fact, we balance this budget in just 10 years.

KWAME HOLMAN: As House Budget Committee Chairman Paul Ryan spelled it out, the Republican plan would cut the deficit by $4.6 trillion dollars over 10 years. Some of that would come through the higher taxes approved in January. But $1.8 trillion would come from repealing the president’s signature health care law.

In addition, the plan converts Medicaid to a block grant to the states and reduces its federal funding share. Ryan also proposed, as he has in the past, transforming Medicare by giving seniors a fixed amount to purchase traditional program coverage or a private plan.

Last year’s Republican vice presidential nominee acknowledged that the plan won’t get past Senate Democrats or President Obama. Instead, he said, it’s an opening bid.

PAUL RYAN: Will the president take every one of these solutions? Probably not. Are a lot of these solutions very popular and did we win these arguments in the campaign? Some of us think so. And so what we’re saying is, here’s our offer. Here’s our vision. Here’s how we propose to plan to balance the budget and grow the economy, repair the safety net, save Medicare.

KWAME HOLMAN: But Democrats quickly charged that Ryan’s math, especially on taxes, doesn’t add up. He would eliminate most deductions and lower tax rates. White House spokesman Jay Carney said Ryan asks nothing from the wealthy to help cut the deficit.

JAY CARNEY, White House Press Spokesman: There is no way to do that in a revenue-neutral way without raising taxes substantially on middle-class families. We look at the Ryan budget as a perfect example of why balance is so necessary, because this is what — this is the alternative to balance.

It results in unfair tax hikes on middle-class Americans, and it results in undue burden on middle-class Americans through the cuts envisioned.

KWAME HOLMAN: Democrats in the Senate are unexpected to unveil their budget for the 2014 fiscal year tomorrow. And unlike the House Republicans’ plan, the measure is expected to include a mix of spending cuts and tax increases.

Senate Majority leader Harry Reid offered a preview this morning.

SEN. HARRY REID, D-Nev.: The Democratic plan will cut wasteful spending and reduce the deficit, close tax loopholes that benefit the rich and invest what the economy needs to go, to go really hard, to continue to build, to grow. It will encourage a strong middle class.

KWAME HOLMAN: Democratic aides said the plan would cut deficits by about $1.8 trillion over 10 years, half through tax revenues and half from spending cuts.

But Senate Republican leader Mitch McConnell said he has low expectations.

SEN. MITCH MCCONNELL, R-Ky.: Call me a skeptic, but there’s little chance the budget my Senate Democratic friends put forward will balance either today, 10 years from today or ever. And I doubt it will contain much in the way of spending reform either.

KWAME HOLMAN: Amid the back-and-forth, President Obama began a series of four trips to Capitol Hill this week, starting today with a meeting with Senate Democrats. He came and went without comment, but he will be back tomorrow to meet with House Republicans. On Thursday, he confers with Senate Republicans and House Democrats.

JEFFREY BROWN: And we explore further the politics and the policies of the competing budget plans with Nancy Cook, the economic and fiscal policy correspondent for the National Journal.

So, still again, two very different visions, right? You referred to it in your report as world views. Start with the Republicans. What did you hear today?

NANCY COOK, National Journal: Sure.

A lot of what we heard from the Republicans was very similar to what we have heard from them in the past. They want to change Medicare for people starting in 2024 and turn it into more of a voucher program, where people go out and buy their own private health insurance. They want to block grant things like Medicaid and food stamps so that it goes through state funding. It changes from an open entitlement program to something that will only support people as long as the money lasts.

And they want to unwind some things that federal government spends money on, like housing giants Fannie Mae and Freddie Mac. But these are really policies that we have heard from them before. There wasn’t a lot of new substance there.

JEFFREY BROWN: Well, and, in fact, you were at the press conference. And I was watching. A reporter pointed that out to Paul Ryan.

NANCY COOK: Yes.

JEFFREY BROWN: And he was sort of — and we saw a little bit of it. He was sort of unapologetically continuing on, no matter what happened in the election, right?

NANCY COOK: Well, there’s a feeling on the part of the House Republicans that, although the presidential election was lost for the Republican Party, the House Republicans feel like they still maintain the majority in the House.

And they feel like that gives them some sort of a mandate. I also feel like the ironic thing in the Ryan budget and the biggest change is that a lot of the savings that Ryan uses to balance the budget in 10 years — that is a new policy goal for him — actually come from signature White House and President Obama policies, thing like the Affordable Care Act and the new tax revenue gained by the fiscal cliff deal.

JEFFREY BROWN: That was passed in — at the end of last year.

NANCY COOK: Right.

JEFFREY BROWN: So, that plays into how he’s getting to his budget balance, you’re saying.

NANCY COOK: Yes. That is a huge part of the math of how he’s getting there in the 10-year window. He doesn’t make Medicare changes until 2024. So that wasn’t really part of it. And it was through these other savings.

JEFFREY BROWN: Now, on the Democratic side, it’s tomorrow. Patty Murray is the Senate Budget Committee chair. She’s putting forth a plan. And, partly, this is interesting, because there hasn’t really been a Democratic plan for a while, right?

NANCY COOK: That’s absolutely right.

The Senate Democrats haven’t produced a budget since 2009. This is a real talking point of the Republicans. And so part of the challenge of her budget is to defang that idea that the Senate Democrats don’t produce a budget. But, also, it’s a tricky thing politically, because she has to unite very different people in her caucus, everyone from, you know, the liberal independent senator from Vermont, Bernie Sanders, to Mark Warner, who is a senator from Virginia who has been much more of a deficit hawk. And these are people both on her committee that she has to unite behind this proposal.

JEFFREY BROWN: And you can’t walk through all of it, but give us a couple of examples of what is expected that sort of toes the line between those two extremes in the party.

NANCY COOK: Well, the biggest difference is, is that she’s calling for $1 trillion dollars in new revenue. And that’s going to come through closing loopholes, whereas the Ryan budget doesn’t want any new revenue. So, that’s sort of a big headline difference.

The other thing is, is that she’s going to propose about $275 billion dollars in savings from health care programs, but again no changes whatsoever to benefits. This comes more through efficiencies or reduced payments to hospitals or doctors.

JEFFREY BROWN: Now, both sides know that their proposal is not going to fly with the other. Is there talk that you hear about some middle ground, or is this, as we heard in Kwame’s piece, sort of just positions now to see what they can get to?

NANCY COOK: I think this week is like the budget battle knife fight. You know, everyone is just swarming each other and trying to figure out what the negotiations are.

But also you have to keep in mind that they’re setting up the parameters for the debt ceiling fight that we’re going to face this summer. So, with each of these things, it sort of feeds into the next budget battle. And that’s what it’s meant to do this week.

JEFFREY BROWN: And, in the meantime, you have the president coming to Capitol Hill today for the first time of four meetings with all the different factions. What do you hear from members about — either the ones who have already participated or are they looking forward to this? Do they see something good coming out of it? What’s going on?

NANCY COOK: Well, the great thing about having the bully pulpit of the White House is that even if people are critical of the president, it’s always flattering to either get an invitation from the president to dinner or to have the president come visit politicians’ turf by coming up to Capitol Hill.

So, I talked with a number of Senate Republicans last week who seem to — you know, they seemed excited by the dinner. They were unclear if it would lead to a big budget deal, but at least the attention. I think today Senate Democrats were a little less flattered, but still excited that the president came up to Capitol Hill and they’re hearing from him directly.

JEFFREY BROWN: Of course, tomorrow is House Republicans, right?

NANCY COOK: Right.

JEFFREY BROWN: So, Paul Ryan, you can’t expect a love fest there, I guess.

NANCY COOK: Yes. He’s going to face his fiercest critics over the next few days when he meets with the House Republicans and the Senate Republicans. And that’s an interesting sideshow to these dueling budget proposals. Does that set up any goodwill for some sort of budget deal this spring?

JEFFREY BROWN: All right, Nancy Cook, National Journal, thanks so much.

NANCY COOK: Thanks.