As Republicans gear up to present their 2012 budget proposal, it has been revealed that the new budget would cut more than $4 trillion from federal spending projected over the next decade and transform the Medicare health program for the elderly.
The budget has been prepared by Rep. Paul Ryan, a Wisconsin Republican and the new chairman of the House Budget Committee, and it represents the most complete attempt so far by Republicans to make good on their promises during the 2010 midterm elections to cut government spending and deficits. Although Rep. Ryan based the Medicare portion of his budget on a previous plan created in collaboration with a Democrat, Alice Rivlin, a senior fellow at the Brookings Institution and long-time budget expert, the current plan isn't likely to get much Democratic support. A broad debate over spending and the role of government heading into the 2012 general election is still expected.
According to this plan Medicare, that now pays most of the health-care bills for 48 million elderly and disabled Americans, would end and a program would be set to directly pay the bills. Mr. Ryan and other conservatives say this is necessary because of the program's soaring costs. Medicare cost $396.5 billion in 2010 and is projected to rise to $502.8 billion in 2016. At that pace, spending on the program would have doubled between 2002 and 2016.
The new proposal would apply to those currently under the age of 55, and, for those Americans would convert Medicare into a "premium support" system. Participants from that group would choose from an array of private insurance plans when they reach 65 and become eligible, and the government would pay about the first $15,000 in premiums. Those who are poorer or less healthy would receive bigger payments than others.
House Budget Committee Chairman Paul Ryan, (R., Wis.), and the Senate Budget Committee's top Republican, Sen. Jeff Sessions of Alabama, right, deliver the GOP response to President Obama's budget submission for Fiscal Year 2012, Feb. 14, 2011.
Mr. Ryan said, “There is nobody saying that Medicare can stay in its current path…We should not be measuring ourselves against some mythical future of Medicare that isn't sustainable.” Mr. Ryan and other Republicans on Sunday made it plain a primary goal in advancing the budget plan is to start setting the terms of a debate for the 2012 election, and to move beyond the debate over trimming tens of billions in spending during the remaining six months of the current fiscal year. The government could partially close on Friday if no deal is reached. Democratic and Republican negotiators have reached agreement on how to divide up $33 billion in cuts for this year, a congressional aide familiar with the talks said Sunday.
“By addressing the drivers of the debt now, we do it in a gradual way,” Ryan said. “We can guarantee the mission of health and retirement security, not just for current generations, but for future generations.”