Battle lines are drawn in Washington over federal spending and taxes, with President Obama laying out a starkly different approach than the one proposed by House Budget Committee Chairman Paul Ryan (R-WI), which Obama said would “change the basic social compact” in the United States. The House voted 235-193 to approve the Ryan plan today.
The Ryan plan would cut $6.2 trillion in government spending and reduce the deficit by $4.4 trillion over the next decade compared to the budget proposed by Obama in February; eliminate about $800 billion in tax increases imposed by Obama’s health care law and repeal the program itself; extend the Bush-era tax cuts that Obama proposed to eliminate; simplify the tax code and reduce rates across the board; and set the top rates for individuals and businesses at 25 percent.
“Our budget contains specific solutions for confronting the debt and averting the most predictable crisis in our nation’s history,” Ryan wrote in yesterday’s Washington Post. “It also offers a contrast in visions . . . Our budget advances a vision of America in which government both keeps its promises to seniors and lives within its means.”
Obama, meanwhile, blasted the Republican plan in a speech Wednesday in which he laid out his own approach to taxes and spending. “This vision is less about reducing the deficit than it is about changing the basic social compact in America,” Obama said of the GOP plan. “There’s nothing serious about a plan that claims to reduce the deficit by spending a trillion dollars on tax cuts for millionaires and billionaires.”
The president’s plan aims to raise $1 trillion in revenue by dropping the tax cuts on higher-income taxpayers that were extended just last year. He said he would cut $400 billion in defense spending over the next ten years; shave $430 billion from Medicare and Medicaid; and cut unspecified amounts from agricultural subsidies and the federal pension insurance system.
