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Taxes, Entitlements: Sticking Points In Deficit Debate

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Taxes, Entitlements: Sticking Points In Deficit Debate

Taxes, Entitlements: Sticking Points In Deficit Debate

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  • <iframe src="" width="100%" height="290" frameborder="0" scrolling="no" title="NPR embedded audio player">
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It's MORNING EDITION from NPR News. Good morning. I'm Steve Inskeep.


And I'm Renee Montagne.

President Obama didn't just talk about his own deficit plan yesterday; he also spoke of a rival Republican plan. And in a sharply worded speech, he repeatedly made a contrast between his plan and that of Wisconsin Congressman Paul Ryan. Both plans profess to sharply reduce federal deficits. They do it in very different ways.

NPR's John Ydstie begins our coverage.

JOHN YDSTIE: The plans put forward by the president and Chairman Ryan both set a goal of about $4 trillion in deficit reduction, but Ryan would get his in 10 years, two years sooner than the president. The biggest differences between the two plans are their treatment of taxes, and Medicare and Medicaid.

Ryan would dramatically transform the two government healthcare programs. Medicaid would become a block grant controlled by the states. Medicare would become a voucher program starting in 2022.

On taxes, Ryan would continue the Bush tax cuts for wealthy Americans, set to expire at the end of next year. Mr. Obama would let them expire.

As he unveiled his plan yesterday, the president criticized Chairman Ryan's proposal for not keeping America's promise to care for its senior citizens.

President BARACK OBAMA: It says that 10 years from now, if you're a 65-year-old who's eligible for Medicare, you should have to pay nearly $6,400 dollars more than you would today.

YDSTIE: Yet, said the president, Ryan believes that at the same time...

President OBAMA: We can somehow afford more than $1 trillion in new tax breaks for the wealthy.

YDSTIE: Republicans quickly rejected the idea of any increase in taxes to solve the deficit problem.

Maya MacGuineas, who heads the Committee for a Responsible Federal Budget at the New America Foundation, says the president's proposal shows he's finally seriously engaging in the deficit discussion. But she says the president's plan is short on specifics and should do more to reduce deficits.

Ms. MAYA MACGUINEAS (New America Foundation): If you look at what Congressman Ryan did, he put out a huge, bold plan, very detailed, and very courageous, because it's hard. You can see, he's going to get beaten up for it. The president wasn't as courageous in what he laid out there, but want he did do is put out something that's doable.

YDSTIE: And to give his plan some teeth, the president proposed a failsafe trigger. It would force across-the-board cuts if the nation's debt-to-GDP ratio isn't declining toward the end of the decade.

Robert Greenstein of the Center for Budget and Policy Priorities, a progressive think tank, takes issue with describing Chairman Ryan's proposal as courageous.

Mr. ROBERT GREENSTEIN (Center on Budget and Policy Priorities): I don't think it's very courageous to say we're going to really eviscerate programs from the weakest people in the society who don't have political clout and have no lobbyists on K Street.

YDSTIE: Greenstein points to deep cuts in the food stamp program in Ryan's plan. He also says the Republican's proposal for block granting Medicaid, which provides health care for the poor, is likely to lead to deep cuts in the program by many states.

But Brian Reidl of the conservative Heritage Foundation sees it differently.

Mr. BRIAN REIDL (Heritage Foundation): Because it gives governors flexibility to innovate and to save costs by block granting the program. And so I think you might see a Washington that's meddling less in the innovative ideas that governors have.

YDSTIE: Over the long term, Chairman Ryan's plan offers a vision of a much smaller government with dramatically different healthcare programs, says Maya MacGuineas. Meanwhile, the president sees the government providing most of the services it currently does, only more efficiently. That may not be visionary, says MacGuineas, but...

Ms. MACGUINEAS: I think what he's talking about is a really helpful starting point for moving this discussion forward.

YDSTIE: And with the nation reaching its debt limit soon, a quick deal on curbing deficits is critical.

John Ydstie, NPR News, Washington.

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