What We’ve Learned from Paul Ryan’s New Budget

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Republicans’ cherubic budget crusader, Paul Ryan, unveiled the latest House GOP budget on Tuesday morning. It won’t become law anytime soon, but it can still tell us a few things about the state of fiscal politics in 2012.

This is still the Republican platform.
Last year’s audacious House Republican budget kicked up a political dust storm. It set the tone for a year when deficit talk dominated. Granny was thrown from the cliff. Ryan became the central issue in a special election in upstate New York, which Democrats won. Newt Gingrich shrugged off the plan as “right-wing social engineering” before being brought around. There are some important policy differences between the 2011 Path to Prosperity plan and this year’s budget, but despite the political forces brought to bear in the past year, Ryan’s original ideas remain a pillar of the party. He proposes reducing Medicaid and food stamps to block grants, shifting more health care costs to seniors over time and deeply cutting regulation, spending and taxes. These are the fundamentals that Mitt Romney will run on. Little has changed.

Republicans are serious about Ryan-Wyden; Democrats are serious about making Medicare an issue.
One of the few changes since last year is the revision of Ryan’s Medicare proposal, which would retain the option of traditional Medicare — a public option, you might call it — in addition to a premium support system in which seniors would be given subsidies to purchase private health insurance on the open market. Those vouchers would grow at a slower rate than medical costs, slowly shifting some of the burden off federal balance sheets. This is basically the plan endorsed by Oregon Democrat Ron Wyden, and an attempt to make Ryan’s drastic reforms palatable to a wider audience. But this doesn’t mean Democrats will embrace the plan or that even Wyden would ever dream of backing the non-Medicare proposals. Dems still plan to hold up Ryan’s plan this fall as evidence that Republicans want to snip the strings of the safety net, while the GOP says President Obama is neglecting a looming fiscal crisis by eschewing entitlement reform.

Congress has not solved its budgetary-showdown problem.
One important detail in the Ryan budget is that its discretionary-spending goals for the next fiscal year fall about $19 billion below the levels agreed upon in last year’s debt-ceiling deal, known as the Budget Control Act. House Republicans have been laying track on this for some time, arguing that the consensus cuts were a floor and not a ceiling for reducing discretionary spending. But the marker laid by the new Ryan budget is the first sure sign that the budget battles of 2011, which took the federal government to the brink of shutdown multiple times, are not over.

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