Proposals for how to fix the U.S. government's spiraling federal budget deficit have led to little more than political gridlock and public frustration.
But House Republicans aimed to make progress this week. They released an ambitious 2012 budget plan yesterday (Tuesday), setting the stage for heated debate with Democrats over the best way to pull America out of its debt hole.
House Budget Committee Chairman Rep. Paul D. Ryan, R-WI, said the GOP's main goal is to avoid the national debt crisis America is headed toward.
But House Republicans aimed to make progress this week. They released an ambitious 2012 budget plan yesterday (Tuesday), setting the stage for heated debate with Democrats over the best way to pull America out of its debt hole.
House Budget Committee Chairman Rep. Paul D. Ryan, R-WI, said the GOP's main goal is to avoid the national debt crisis America is headed toward.
"This is not the future of a proud and prosperous nation. It is the future of a nation in decline - its best days come and gone," the proposal states.
The GOP budget proposal, called "The Path to Prosperity," cuts $6 trillion in spending over the next decade and aims to balance the budget - excluding interest payments - by 2015.
"We've got to show the country that we can get this situation under control and grow the economy, and that's what we're doing," Ryan said Tuesday. "I can't look my kids and my constituents in the eyes with my conscience being clear and not know that I didn't do everything I could to try and fix this problem before it got out of control."
Here are some key reforms the GOP has proposed to meet its spending cuts goal:
Democrats were quick to attack the Republicans' proposal, starting a long battle in Washington over how to rein in U.S. government spending. Many claim the GOP plan hurts those who need government aid.
"The American people won't be fooled by your rhetoric, Mr. Chairman," said a statement Tuesday from the office of House Democratic Leader Rep. Nancy Pelosi, D-CA. "The GOP budget eliminates guaranteed benefits for seniors under Medicare and slashes support for seniors, children, and Americans with disabilities on Medicaid."
This brings us to next week's Money Morning "Question of the Week": What do you think about the GOP's proposed spending cuts? Do you think the budget proposal is good for the country, goes too far, or doesn't do enough? What do you think about the proposed changes for Medicare and Medicaid?
News and Related Story Links:
The GOP budget proposal, called "The Path to Prosperity," cuts $6 trillion in spending over the next decade and aims to balance the budget - excluding interest payments - by 2015.
"We've got to show the country that we can get this situation under control and grow the economy, and that's what we're doing," Ryan said Tuesday. "I can't look my kids and my constituents in the eyes with my conscience being clear and not know that I didn't do everything I could to try and fix this problem before it got out of control."
Here are some key reforms the GOP has proposed to meet its spending cuts goal:
- Convert Medicare in 2022 into a "premium support system" for Americans, where they can choose from an array of private insurance plans. The U.S. government would pay about the first $15,000 in premiums, with payment amounts varying based on participants' economic and health status.
- Make Medicaid a block grant program, giving state governors more flexibility with funding.
- Cut non-security discretionary spending by $79 billion next year by reducing farm subsidies, shrinking the federal work force and streamlining government agencies.
- Cap government spending as a percentage of gross domestic product to around 20%, down from about 24% now.
- Repeal U.S. President Barack Obama's healthcare law.
- Adopt $178 billion in Pentagon cuts, with $100 billion to be reinvested in other defense programs.
- And cut corporate and personal taxes to a top rate of 25%, down from 35%.
Democrats were quick to attack the Republicans' proposal, starting a long battle in Washington over how to rein in U.S. government spending. Many claim the GOP plan hurts those who need government aid.
"The American people won't be fooled by your rhetoric, Mr. Chairman," said a statement Tuesday from the office of House Democratic Leader Rep. Nancy Pelosi, D-CA. "The GOP budget eliminates guaranteed benefits for seniors under Medicare and slashes support for seniors, children, and Americans with disabilities on Medicaid."
This brings us to next week's Money Morning "Question of the Week": What do you think about the GOP's proposed spending cuts? Do you think the budget proposal is good for the country, goes too far, or doesn't do enough? What do you think about the proposed changes for Medicare and Medicaid?
[Editor's Note: Is there a topic you want to see covered as a "Question of the Week" feature? Then let us know by e-mailing Money Morning at mailbag@moneymappress.com. Make sure to reference "Question of the Week suggestion" in the subject line.
We reserve the right to edit responses for length, grammar and clarity.
Thanks to everyone who took the time to participate - via e-mail or by posting their comments directly on the Money Morning Web site.]
We reserve the right to edit responses for length, grammar and clarity.
Thanks to everyone who took the time to participate - via e-mail or by posting their comments directly on the Money Morning Web site.]
News and Related Story Links:
- The New York Times:
The House Republicans' 2012 Budget Proposal
- Fox News:
Rep. Paul Ryan Previews GOP Budget
- Money Morning News Archive:
Question of the Week Feature
More on this topic
(What's this?)
Revealed: Secret Ottawa Gravy Train
(Canadian Business Blog, 4/8/11)
National Budget Projections Are Scary
(InvestorCentric, 3/21/11)
Budget 2011 Prequel
(Canadian Business Blog, 3/21/11)
Budget Highlights Feb 2011
(INVESTORS PLEASE LISTEN !, 3/1/11)
Tags: budget committee, Debt Crisis, Federal Budget Deficit
RSS
We need it but the DEMS and main street media will attack. So what else is new.
Start making the rich and corporations pay their way. That'll take care of the debt in no time without crushing ordinary men and women, reducing the quality of education and without robbing social security.Republicunts have already played their hand in the house and across the country – they're doing nothing to create jobs. they're too busy shutting down schools, crushing unions and redefining rape as the woman's fault? to do anything useful. End the wars, bring the troops home.
Articles are user friendly–easy to understand with practical points and pearls of wisdom for simple investors!
When President Obama was Senator Obama in 2006 he addressed Congress with the following: "The fact that we are here today to debate raising America's debt limit is a sign of leadership failure. It is a sign that the US Government can't pay it's own bills. It is a sign that we now depend on ongoing financial assistance from foreign countries to finance our Governments reckless fiscal policies. Increasing America's debt weakens us domestically and internationally. Leadership means that the buck stops here. Instead, Washington is shifting the burden of bad choices today on to the backs of our children and grandchildren. America has a debt problem and a failure of leadership. American's deserve better." He needs to read this everyday because he is speaking about himself especially when he speaks of "leadership failure"
Hmmmmm (WARNING….sarcasm ahead)
too bad we don't have a Democratic President to speak out against these Tea Buggers
Maybe when we get a Democratic President he'll champion social programs and find revenue by ending tax cuts for the rich
I hope Jerry Brown doesn't take his lead from the Bozo in the White House
If Republicans keep this up I may have to change from Decline to State to Republican.I doubt they are really serious since Republicans,like Democrats are really just sales organizations that have to sell products the voters will buy.I believe most Americans still look to govt for freebies and don't want reality to start now.If Republicans don't promise greedy,ignorant,short term oriented American voters "something for nothing" you can be sure the Democrats will.Good luck with the effort to downsize inefficient,wasteful big govt,if you are sincere.
I believe Paul Ryan's Budget Plan is actually something that makes sense to the future of this country. The spending has gone so far above the means of this country, it is more than terrribly sad; it is obscene. To see a President leading us down a path of total internal collapse is reprehensible. Why can't the ordinary people see he is leading us down a road of much more debt, doubt and uncertainty.
Why not cut the budget back to the 1912 level; the year before income tax.
Our representatives in congress should start acting like responsible citizens. The fact that we have a proposal of $3.7 trillion for the 2012 yr. and we cannot reduce it by more than what is propose is ludicrous. We freely spent but slowly cut! How about spending less and eliminating waste. How about the congress living with the same regulations(health, salary,etc,) they are willing to impose on the citizens of the U.S. Enforcing our immigration laws would help reduce the "freeloading" illegals that are crippling our states. That would reduce the amount that is spent(most of which is not necessary)
Run a mortgage calculator. It looks like a 30 year plan, at 4%, to pay off a 14 trillion debt requires annual payments of just over 800 billion, at 7% just over 1.1 trillion.
I've found numbers that the total federal take in 2009 was $2.1 trillion. IF that level of economic activity and taxation could be maintained and there was no more inflation the federal government would need to live within an annual "budget" of $1 trillion to $1.3 trillion.
Cutting back on commitments to the elderly will doom this plan. Everyone needs to share in the solution to the deficit. When you tell seniors that instead of the current 25% of health costs that they pay, they will be paying 68% while cutting tax rates on the wealthy from 35% to 25% is a formula for disaster!
We are now borrowing 41 cents of every dollar we spend (from China). The cuts proposed do not go far enogh. Look at the gain of debt under "the Messiah" compared to the last 200 + years and you may begin to understand the size of the problem.
Fiscal responsibility, what a concept! So the GOP's budget will decrease programs. So what?
Better a decrease than none at all?
First, take the elitism out of Congress. Propose that they accept the same health plans, same benefits that average Americans receive. And what about pay cuts too? Should they not lead by example? Why are teachers and firemen and police taking cuts while "our representatives" still eat steak?
We are actually paying these puffed-up pigeons to strut and shout. They are NOT solution-oriented, but problem-oriented, therefore will tack idealogy on to a bill, creating more problems, not simplifiying the original. And we are paying them to do very little.
If you limit the "entitlement" programs with a cap, that might be acceptable. If you destroy Medicare, you are in for BIG TROUBLE, as no one wants to see old, sick people dying in the streets. Not good for your parents. Not good for you or your children. Not good for the international image, hmmmm?
We have sacrificed in the last three years, now it's time for Congress to give back, not just arrogantly strut while pretending to do legitimate work. Pay cuts for Congress, especially while they 'shut down' the government!!
Obama seems to be saying He Would Rather Kill babies with Planned Parenthood abortions than pay our troops. He then blames the republicans because He Is Irresponsible in the way he is looting our treasury. I am surprised that he is not blaming Bush for making him attack Lybia and expanding our exposure in Afganistan and racking up trilions of dolllars in more debt. Well he probably has but the press is tired of reporting his bs.
I am a disabled American currently on Disability. I hate being on it, I have no real choice with my health the way it is. I DO favor the Republicans plan and do not belive it will take anything away from others that are in my situation. I DO belive it will limit and take a good hard look at others , like illigal immigrants and people who are abusing the system, that do not need to be on it.
The democrats scare tactic is so foolish that it is unbelivable that anyone truely belives it.
I am a history buff as well and can see a lot of history repeating it's self. We are in for some real hard times, possibly even war like in this country due to berry obomba and it's administration. (Just because I hate the s.o.b. does mean that he is not a good person BTW)
I do not have a great amonth of money right now, but I am doing what I can for my future, it is very tough.
I TOTALY support the cost cutting and the revamp of the system. We need to do something to rebuild our status as a World Leader again, this administration is killing us, and it is very much intentional.
I support the GOP Agenda at this time.
Robert R