What Happens Now: Senate Defeats Ryan’s $6.2 Trillion Deficit Cut by Gregory Hilton

Rep. Paul Ryan (R-WI), Chairman of the House Budget Committee, holds a copy of his “Path to Prosperity” budget proposal. The $6.2 trillion reduction was defeated in the Senate earlier today.

The Senate today defeated the Ryan budget on a 57 to 40 vote. The “Path to Prosperity” deficit reduction plan had earlier passed the House and it would have reduced the deficit by $6.2 trillion over a decade. The most controversial part of the Ryan plan involved Medicare.
It would have established block grants to states so they could administer the program. It also would have created vouchers for the low-income Medicaid program so recipients could have sought health care on their own.
Medicare now pays doctor and hospital bills of seniors directly. All of the Republican reform proposals have attempted to shift major aspects of entitlement programs to the private sector. Prominent Democrats admit Medicare is too expensive and lacks competition, but they will not offer any meaningful solutions.
Spending freezes are easy for other government agencies, but Medicaid and Medicare Advantage receive a 5 to 6 percent inflation increase every year even when there is no inflation. Just stopping that would be worth $60 billion/year.
The Ryan Medicare/Medicaid proposal is dead for this Congress, but the GOP is not throwing in the towel on entitlements. The Republican fallback position is an absolute freeze on Medicare spending over the next decade, but it will not go anywhere without some Democratic support.
Congress is likely to reach an agreement on extending the debt ceiling, but the big question continues to be deficit reduction. Both the White House and the GOP have set goals calling for a $4 trillion deficit reduction program over a decade, but they want to arrive by different paths.
The White House wants tax increases and defense spending cuts the GOP believes are unwise. The GOP wants spending cuts only, but they can not reach their goals without touching entitlements.
The Republicans have often had no one to negotiate with. It has been almost 500 days since the Democratic Senate last proposed a budget. House Democrats could not agree on one before last year’s election, and for the first since the Budget Act was passed in 1973, they just ignored the deadline.
The deficit continues to mount but liberals will not budge on their demand for tax increases. President Obama’s deficit reduction commission proposed many useful ideas, but all of them were relegated to the White House trash heap.

Entitlement Reform Efforts of the Past Have Been a GOP Disaster

1981: Ronald Reagan always had to contend with a Democratic House of Representatives, but he was able to enact key parts of his agenda during the first two years because of the conservative coalition. Republicans were able to team up with conservative southern Democrats to pass legislation. Reagan had to deal with a recession, and also tried to reform Social Security in 1981. He wanted to reduce the cost-of-living adjustments and early-retirement benefits. In the 1982 election Democrats gained 27 seats and the conservative coalition lost its operational control of the House.
1985: Reagan won re-election by carrying 49 states and the GOP once again tried to reform Social Security. The GOP Senate passed a budget limiting Social Security increases but it was defeated in the House. Social Security was once again a campaign issue and the GOP lost control of the U.S. Senate. Six GOP incumbents were defeated and there was a net loss of 8 Senate seats.
1995: The previous year the GOP captured control of the House for the first time in 40 years. The GOP tried to limit Medicaid spending. President Clinton said Republicans were bleeding Medicaid to fund tax breaks for the wealthy. Clinton defeated Dole in 1996 by receiving 379 to 159 electoral votes.
2005: President George W. Bush attempted to establish private investment accounts for Social Security and also sought to reduce guaranteed benefits. Democrats responded the next year with a “Save Social Security” campaign theme. Democratic leaders repeatedly said there was no Social Security problem, and the electorate believed them. They recaptured both the House and Senate. It was the first election in U.S. history where no Democratic incumbent or open seat in the U.S. Congress of a Governor’s mansion was lost to the GOP.

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