Just the Facts: the House FY2012 budget proposal

April 6, 2011

FISCAL YEAR 2012 BUDGET:

The House Republican Proposal

The House Budget Committee Majority, led by Chairman Paul Ryan, released on April 5 its Fiscal Year 2012 budget – a 10-year plan that would require significant reductions in discretionary spending, including defense spending, and that would reform two of the largest and least sustainable entitlement programs: Medicare and Medicaid. Compared to the President’s budget, the House Republican’s budget would spend more than $6 trillion less over the next decade, and reduce deficits by over $4 trillion more.

The full House is expected to consider the budget the week of April 10. Below is a look at some of the key numbers, assumptions, and reforms contained in the proposal.

KEY FACTS

FY 2012 Total Spending: $3.5 trillion.

FY 2012 Deficit: $1 trillion. Deficits would fall to $400 billion by 2020, but it would take 30 years to eliminate deficits completely.

FY 2012 Debt: $16 trillion. Debt would continue to rise to $23 trillion by 2021; debt would not be paid down until 2040.

 

SPENDING REFORM

Total Spending Cuts: $5.8 trillion over 10 years.

Total Deficit Reduction: $4.4 trillion over 10 years.

Spending as a Percentage of GDP: Reduces to 20 percent by 2015.

Mandatory Spending. Proposes reform to Medicare and Medicaid, two of the three largest entitlement programs; fails to propose significant reform to Social Security; instead calls for a trigger that would require the President to submit a plan for reform if Social Security is found “not sustainable.”

Medicaid: Reforms Medicaid by reworking the program into a block grant-style system, which House Republicans say will give states flexibility and save taxpayers $750 billion over 10 years.

Medicare: Preserves the Medicare system for current beneficiaries and those near retirement. For younger Americans, it transforms the program into a health care system similar to the one enjoyed by Members of Congress.

Fraud: Increases funding for programs that root out fraud in mandatory spending programs. Republicans estimate this will save $26 billion.

Regular Review: Takes mandatory programs off “autopilot” and require regular review of these spending programs.

Discretionary Spending. Freezes non-defense discretionary spending at Fiscal Year 2008 levels.

Defense: Includes Secretary Gates’ plan to save $178 billion in military spending. According to Republicans, $78 billion of these savings would go to deficit reduction while $100 billion would be “reinvested.”

Federal Workforce: Halts government hiring and makes significant changes to worker benefits, including a freeze on salaries until 2015. Republicans estimate this will save taxpayers $375 billion over 10 years.

 

TAX REFORM

Overall Tax Burden: Holds overall tax burden at 18 to 19 percent of GDP by cutting taxes $1.8 trillion over the next 10 years.

Tax Rates: Cuts the top personal income tax rate from 35 percent to 25 percent and the corporate tax rate from 35 to 25 percent. Republicans say they will offset this plan by reducing tax expenditures.

 

BUDGET PROCESS REFORM

Budget Caps: Calls for establishment of caps on overall government spending at a certain percentage of GDP going forward,

Debt Limit Increases: Requires any measure to increase the federal statutory debt limit be coupled with spending cuts.

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18 Responses to Just the Facts: the House FY2012 budget proposal

  1. Frank Goffena says:

    I see some real cuts here, but I believe they could do better. Social Security should also bee addressed. I also believe they should implement the FairTax.

  2. Frank Goffena says:

    I see some real cuts here, but I believe they could do better. Social Security should also bee addressed. I also believe they should implement the FairTax.

  3. Frank Goffena says:

    I see some real cuts here, but I believe they could do better. Social Security should also bee addressed. I also believe they should implement the FairTax.

  4. larry lindstrom says:

    go paul ryan i SURE HOPE YOU GET THIS PASSED AND ITS GOOD FOR YHE COUNTRY AND NOT JUST ANOTHER EMTY PROMISE BY ANOTHER POLITICIAN

  5. larry lindstrom says:

    go paul ryan i SURE HOPE YOU GET THIS PASSED AND ITS GOOD FOR YHE COUNTRY AND NOT JUST ANOTHER EMTY PROMISE BY ANOTHER POLITICIAN

  6. larry lindstrom says:

    go paul ryan i SURE HOPE YOU GET THIS PASSED AND ITS GOOD FOR YHE COUNTRY AND NOT JUST ANOTHER EMTY PROMISE BY ANOTHER POLITICIAN

  7. Christopher Smith says:

    Paul Ryan and Michele Bachmann for President!

  8. Christopher Smith says:

    Paul Ryan and Michele Bachmann for President!

  9. Christopher Smith says:

    Paul Ryan and Michele Bachmann for President!

  10. Paul says:

    You might want to change your debt numbers to “trillion” from “billion”

  11. Paul says:

    You might want to change your debt numbers to “trillion” from “billion”

  12. Paul says:

    You might want to change your debt numbers to “trillion” from “billion”

  13. Paul says:

    Have you guys done any calculations about how much we save (or lose) for every day the government is shutdown (if it shuts down)? That might be a useful thing to know since everyone is going to be pointing out the negative things about a shut down.

  14. Paul says:

    Have you guys done any calculations about how much we save (or lose) for every day the government is shutdown (if it shuts down)? That might be a useful thing to know since everyone is going to be pointing out the negative things about a shut down.

  15. Paul says:

    Have you guys done any calculations about how much we save (or lose) for every day the government is shutdown (if it shuts down)? That might be a useful thing to know since everyone is going to be pointing out the negative things about a shut down.

  16. Ted says:

    May read of this Ryan budget summary – its a joke. Doesn’t solve the problem fast enough. Its more kick-the-can-down-the-road along with so-called regressive GOP social policies which seem their bigger priority.
    The rich do NOT pay their fair share one example is FICA capped at $109K/year. So folks making more than $109K/year get a nearly 7% boost in net take home income so one making $250K/year banks an extra nearly $10K.

    Then there’s the capital gains tax capped a 15% whereas the top income tax rate is 35%. That’s a windfall, billionaires make 99.9% of their annually monies via capital gains for a differential of 20% bigger take home pay on top of the FICA giveaway. And these rich still able to take every other deduction.

    Balance budget amendment is total rhetorical feel good idea – otherwise useless.

    And there’s no call for the Line-Item-Veto – hardly ever mentioned. Wonder why?

    Also context is missing all around: GOP got into this mess, why should folks be willing to trust the GOP to make us whole again? Example: Repeal of The Glass-Steagall Act that ended the firewall between banks and investments. The act was pass by veto proof GOP majorities in both houses. BTW: Sen. Boxer one of few brave one who voted no.

    Macro economics TAKE TIME to improve as magic wands by politician are a myth. However it is easy to tank the economy quickly enough when regulators and regulations are 86′d.

    Now lets cut $150B from DoD that $1.5T in 10 years now that’s a good start. End AG, Ethanol, and other energy subsides – that’s worth at least another $150B. So Simple $3T saving over 10 years no sweet no effort. So what’s with all the hand wringing over solving the deficit?

  17. Ted says:

    May read of this Ryan budget summary – its a joke. Doesn’t solve the problem fast enough. Its more kick-the-can-down-the-road along with so-called regressive GOP social policies which seem their bigger priority.

    The rich do NOT pay their fair share one example is FICA capped at $109K/year. So folks making more than $109K/year get a nearly 7% boost in net take home income so one making $250K/year banks an extra nearly $10K.

    Then there’s the capital gains tax capped a 15% whereas the top income tax rate is 35%. That’s a windfall, billionaires make 99.9% of their annually monies via capital gains for a differential of 20% bigger take home pay on top of the FICA giveaway. And these rich still able to take every other deduction.

    Balance budget amendment is total rhetorical feel good idea – otherwise useless.

    And there’s no call for the Line-Item-Veto – hardly ever mentioned. Wonder why?

    Also context is missing all around: GOP got into this mess, why should folks be willing to trust the GOP to make us whole again? Example: Repeal of The Glass-Steagall Act that ended the firewall between banks and investments. The act was pass by veto proof GOP majorities in both houses. BTW: Sen. Boxer one of few brave one who voted no.

    Macro economics TAKE TIME to improve as magic wands by politician are a myth. However it is easy to tank the economy quickly enough when regulators and regulations are 86′d.

    Now lets cut $150B from DoD that $1.5T in 10 years now that’s a good start. End AG, Ethanol, and other energy subsides – that’s worth at least another $150B. So Simple $3T saving over 10 years no sweet no effort. So what’s with all the hand wringing over solving the deficit?

  18. Ted says:

    May read of this Ryan budget summary – its a joke. Doesn’t solve the problem fast enough. Its more kick-the-can-down-the-road along with so-called regressive GOP social policies which seem their bigger priority.
    The rich do NOT pay their fair share one example is FICA capped at $109K/year. So folks making more than $109K/year get a nearly 7% boost in net take home income so one making $250K/year banks an extra nearly $10K.

    Then there’s the capital gains tax capped a 15% whereas the top income tax rate is 35%. That’s a windfall, billionaires make 99.9% of their annually monies via capital gains for a differential of 20% bigger take home pay on top of the FICA giveaway. And these rich still able to take every other deduction.

    Balance budget amendment is total rhetorical feel good idea – otherwise useless.

    And there’s no call for the Line-Item-Veto – hardly ever mentioned. Wonder why?

    Also context is missing all around: GOP got into this mess, why should folks be willing to trust the GOP to make us whole again? Example: Repeal of The Glass-Steagall Act that ended the firewall between banks and investments. The act was pass by veto proof GOP majorities in both houses. BTW: Sen. Boxer one of few brave one who voted no.

    Macro economics TAKE TIME to improve as magic wands by politician are a myth. However it is easy to tank the economy quickly enough when regulators and regulations are 86′d.

    Now lets cut $150B from DoD that $1.5T in 10 years now that’s a good start. End AG, Ethanol, and other energy subsides – that’s worth at least another $150B. So Simple $3T saving over 10 years no sweet no effort. So what’s with all the hand wringing over solving the deficit?

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