GOP Unveils 2012 Budget Plan

House Budget Committee Chairman Paul Ryan unveils the GOP alternative to President Obama's fiscal 2012 budget plan. It includes sweeping changes in Medicare and Medicaid, plus new caps on discretionary spending. Democrats won't embrace it. But it does move the discussion onto "real money," or entitlements, and give the GOP a chance to lay out its priorities for putting U.S. fiscal affairs in order.

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MELISSA BLOCK, host:

More now on that debate over a budget for 2012. House Republicans aren't waiting around for the battle over this year's budget to get going on the next one. The GOP fired off its proposal for next year today.

The plan flashes more than $5.5 trillion from the budget over the next decade, and it does so by making big changes to Medicare and Medicaid, along with some big spending cuts that have Democrats on the defensive.

NPR's Audie Cornish reports.

AUDIE CORNISH: If you're starting to get confused about which billions are cut and which budget, just understand this. The battle over this year's budget, next year's budget, the raising of the debt ceiling are all skirmishes in the same war.

House Majority Leader Eric Cantor.

Representative ERIC CANTOR (Republican, Virginia; House Majority Leader): We've always said that there's going to be three bites at the apple in the spending fight. The first was going to be the C.R. resolving the rest of this fiscal year. The next was going to be the budget, and the final would be the debt limit. But we've got two bites at that apple today.

CORNISH: So Republicans unveiled a 70-plus page blueprint for 2012 - filled with charts and graphs and bullet points. House Budget Committee chairman, Paul Ryan of Wisconsin, is the force behind the proposal.

Representative PAUL RYAN (Republican, Wisconsin; Chairman, House Budget Committee): Now, let me walk you through some of the charts and some of the numbers. If you take a look at the screens on the side here, first of all, let's look at spending.

CORNISH: The plan features $5.5 trillion in spending cuts spread out over the next decade. That includes cuts that come from discretionary spending in areas from education to job training and the repeal of the Democrats' new health care law.

But core to the blueprint are proposals that would fundamentally change the structure of the health programs Medicare and Medicaid for people who are 55 years old and younger.

Rep. RYAN: We believe in this country that we ought to have a social safety net. We believe that we ought to have a safety net to catch people from slipping through the cracks, to help people when they're down on their luck and to help people who cannot help themselves. Problem is our social safety net is fraying at the seems.

CORNISH: So the Republican plan would convert Medicaid into a block grant program, and the Medicare program for the elderly would change to a system where people would get a fixed amount of money from the government to buy private insurance.

Another cornerstone of the proposal, cuts tax rates for corporations and wealthy individuals from 35 percent down to 25 percent. Overall, the Ryan plan cuts the deficit by $4.4 trillion over 10 years.

Senator MAX BAUCUS (Democrat, Montana): Of course, we have to lower our budget deficit.

CORNISH: Montana's Max Baucus is the top Democrat on the Senate's tax-writing committee.

Sen. BAUCUS: But, of course, we have to do it fairly, so all Americans are part of the solution. All Americans are part of the solution. So that health insurance companies are also part of the solution. So the most wealthy are also part of the solution. All Americans have to be part of the solution.

CORNISH: Not just seniors and the poor, say Democrats in the Senate who are unlikely to embrace the Ryan plan.

Meanwhile, the GOP proposal still wouldn't balance the budget or offer a plan to deal with keeping Social Security solvent in the long term. But Ryan and Republicans say this is a stronger start than the president has offered, and they're ready to battle it out over these ideas in the coming weeks.

Audie Cornish, NPR News, the Capitol.

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