Today, as Senate Budget Committee Chairman Kent Conrad, D-N.C. holds a hearing on a budget that he unveiled but won’t even allow a vote on, Sen. Pat Toomey, R-Penn., has released a new proposal that promises to balance the budget within eight years.
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The Toomey proposal contains many of the same elements of House Budget Committee Chairman Rep. Paul Ryan’s plan, but would make deeper cuts to achieve balance sooner.
Like the Ryan proposal, the Toomey budget would transition Medicare into a system in which seniors could apply subsidies toward the purchase of a privately-adminstered health insurance plan or remain in the traditional program. It would also block grant Medicaid spending to the states, allowing them more flexibility to reform the program.
In addition, Toomey would increase the means testing that takes place within Medicare, making wealthier beneficiaries pay more.
The proposal would reduce non-defense discretionary spending (which excludes Medicare, Medicaid and Social Security) to 2006 levels in fiscal year 2013, freeze it at that level for eight years, and then peg its growth to inflation.
On defense spending, the budget would keep the caps set by last summer’s debt ceiling deal. But he would substitute other spending cuts to avert more severe defense reductions resulting from the “trigger” in place from the failure of the Congressional “super committee” to find sufficient deficit reduction.
Toomey would also cut individual tax rates by 20 percent and reduce the corporate tax rate to 25 percent from 35 percent. He said that these rate reductions will be offset by closing loopholes and limiting deductions, though the proposal doesn’t specify which ones he’d scale back.
Taken together, the budget promises to achieve balance by 2020, well before the Ryan plan would do so. Over the next decade, it would bring down debt as a percentage of GDP to 56 percent, from this year’s 73 percent level.
Read the full plan here.
