U.S. Rep. Paul Ryan, R-Wis., has proposed a long-term budget plan that would put the United States on a path to fiscal responsibility. The plan would cut deficits nearly $5 trillion over 10 years, compared with only $1 trillion that President Barack Obama’s budget framework would cut. Also unlike the Obama plan, Ryan’s plan “is on par with recommendations from Obama’s own bipartisan deficit commission in December,” The Associated Press noted.
The key to Ryan’s bipartisan proposal is a plan he crafted with Alice Rivlin, who was a White House budget director in the Clinton administration, to reform Medicare, which is headed for bankruptcy. Americans 55 or older could stay in Medicare or switch to a new plan that would apply to anyone 54 or younger. Those 54 or younger would get vouchers from the government to buy medical insurance from one of many private plans. Lower-income or sicker beneficiaries would get more money.
Medicaid would be reformed, too, with the federal government turning it over to states and providing them lump sums to run the program. They could fashion it to suit their needs, without heavy federal dictation.
Ryan’s blueprint would give the federal tax code a needed overhaul as well, by getting rid of many of its lobbyist-backed tax breaks. The plan would promote economic growth by reducing the top income tax rate on individuals and corporations from 35 percent to 25 percent.
Even with the much bigger spending cuts that this plan envisions compared with the president’s plan, it would take years before deficits get somewhat under control. But isn’t it wiser to begin that effort now rather than wait until disaster is upon us?