Rep. Paul Ryan rolls out budget plan that overhauls Medicare, Medicaid

House Budget Committee Chairman Paul Ryan, R-Wis. touts his 2012 federal budget during a news conference on Capitol Hill in Washington, Tuesday, April 5, 2011.

/ AP Photo/J. Scott Applewhite

Updated at 12:35 p.m. ET

Republican Rep. Paul Ryan of Wisconsin, chairman of the House Budget Committee, is knowingly taking a big political gamble by introducing a 2012 federal budget today that proposes to dramatically transform Medicare and Medicaid -- two government programs that provide health care for a significant portion of the country.

As the GOP readies for the political attacks they'll surely suffer in the coming days, the party is framing their budget as a moral imperative.

"We believe we have a moral responsibility to step in and provide the leadership the president has not been providing," Ryan said at a press conference today, where he officially unveiled the budget. "We ought to have a social safety net to help people who are down on their luck and people who cannot help themselves... The problem is, our social safety net is fraying at the seams."

House Speaker John Boehner endorsed the plan -- and the narrative of a moral responsibility.

"Our budget will help spur job creation today, stop spending money we don't have, and lift the crushing burden of debt that threatens our children's future," he said in a statement.

Ahead of the formal introduction, Ryan today rolled out a polished presentation of his plan, which he calls the "Path to Prosperity." (Read it below.) With explanations on opinion pages and on YouTube, the GOP is readying for the political attacks that will surely follow as they attempt to revamp popular and vast health care systems.

Ryan's budget proposal aims to slash government spending by about $6 trillion over the next 10 years, compared with President Obama's budget. It would in part accomplish that by changing Medicaid -- which serves low-income families -- from a government-run insurance program to a system of block grants distributed to states.

Medicare, a government-run health care program for those over 65, would essentially turn into a "premium support" program -- the government would essentially provide vouchers for health care, but the funds would go directly to the insurer rather than the consumer. The government would give private health insurers a set amount of money to cover senior citizens. The change to Medicare would go into effect in 2022 under the plan.

It's a risky proposal politically, given Medicare's overwhelming popularity, but Ryan and the GOP are prepared to argue the changes are necessary.

"This is a plan not only to pay off our debt over time, but to get the budget under control to keep the government going," Ryan said on the CBS' "The Early Show" today. (Watch at left.)

Ryan explained that his Medicare plan is modeled after the government insurance program offered to congressmen.

"The sooner we tackle the problems, the better off all of us are," he said. "We can't keep kicking the can down the road."

Ryan's plan would subtract $389 billion in Medicare expenses over the next decade, compared with President Obama's budget, as well as $735 billion in Medicaid expenses.

A huge part of Ryan's overall savings come from simply repealing Mr. Obama's health care reform package. That's estimated to save $1.4 trillion, though it would not all go to deficit reduction, since repealing health care reform would mean losing some of the Democrats' cost-saving measures.

Ryan argues that the significant changes are necessary in a slickly produced web video released today, featuring subtle but somber music and a series of charts with sobering statistics about the future of the nation's debt.

"Washington has not been telling you the truth," Ryan says in the video. "If we don't reform spending on government health and retirement programs, we have zero hope of getting our spending and as a result our debt crisis under control."

Ryan says his budget "fixes the flaws in Medicare and Medicaid that have made rising costs nearly impossible to check."

The congressman told reporters today that shifting Medicare recipients to private health insurance will make the system more efficient.

"We want to harness the power of patient choice, of competition," he said.

Liberal economists like Dean Baker, however, argue that Ryan's plan simply shifts the costs from the government to the backs of consumers. Ryan's plan "does nothing to address our broken health care system while virtually guaranteeing that most seniors will not be able to afford decent health care," Baker writes for the Center for Economic and Policy Research.

In an op-ed in the Wall Street Journal this morning, Ryan writes that President Obama's efforts to address the growing deficit -- or lack of effort -- have only made things worse.

"Major spending increases have failed to deliver promised jobs," he wrote. "The safety net for the poor is coming apart at the seams. Government health and retirement programs are growing at unsustainable rates. The new health-care law is a fiscal train wreck. And a complex, inefficient tax code is holding back American families and businesses."

Along with overhauling government health care systems, Ryan's plan scales back non-security discretionary spending to 2008 levels and cuts the top income tax rate from 35 percent to 25 percent. The budget proposal says the lost tax revenue from the lower rate will be made up by eliminating deductions and credits, broadening the base and eliminating incentives for corporations to keep profits overseas. However, it does not say which deductions or carve-outs will be eliminated.

Ryan's proposal makes no tax increases because, as the congressman said today, "You raise taxes... you don't get [economic growth]."

There are minimal changes to Social Security. Ryan said today that he's "cautiously optimistic" about reaching a bipartisan agreement down the road for modifying Social Security.

Ryan also proposes a defense budget similar to Mr. Obama's.

CBSNews.com Special Report: Health Care and Medicare

To drive home the point that his plan represented the necessary course of action, Ryan today likened the projected deficit increases, entitlement shortfalls and other predicted future budgetary problems to the financial crisis of 2008.

"What if your congressmen, your president, saw it coming," Ryan said. "What if they knew it was going to happen... what could be done to prevent it from happening, and they had time to prevent it, but they decided not to because it wasn't good politics."

"This is the most predictable economic crisis in our history, and what are we doing playing politics?" he continued. "We decided it is time to stand up and do what is necessary to fix this country... We cannot keep going down the path of fearing what the other political party would do to us if we try to solve a problem."

Check out Paul Ryan's 2012 budget plan below:

[hhandyman]

Ryan can not call himself a Right to life supporter when he values cash more than life it self. If you are a Christian and have a n honest belief in right to life you cant support his bill without proving your a hypocrite you either Live and pay for your beliefs in full or you prove you never really had those beliefs at all and are living lie to yourself and to others when you claim to have that belief.
The Republican blame other s first For the Fault they themselves posses Like the idea of Death Panels was a slam on the guidance groups to explain what a living will is to those that may need one not so sever as the cut the pocket book strings to life giving treatment that is a Death panel that values life only on a dollar and cent value Not the value of any other basic skills knowledge and wisdom pass with each death each of which may be more important than the cash spent in preserving a life.

[golfhitch]

Ryan is right it will create more jobs in the country, grave diggers. What the hell are they thinking turn medicare and medicaid over to private companies and then give them the money so they can determine the cost of care. You talk about death panels, well here they are. I can just see the same insurance companies that deny coverage now telling you that you are out of money and just go sit in a corner and die.

[hhandyman]

thier should be one new tax a tax on all political donations of 50% trimming off the top even ammounts so the voice effect of the dollar isnt affected but the volume of influence it has on elections is limited. the funds should be applied to the debt of that level of government directly and not be allowed to be redirected by any office in the government. That way Lobby money is put to a good use for all and less used to twist the laws to some specific groups bent but used for All Citizens of this nation. Pure simple and works off that big problem that the Republicans keep pushing on the national debt without harming the innocent common income citizen.

[flatman777]

The last time I looked at my pay stub it showed what I paid in Federal Tax and then seperately shows Medicare and Social Security. The Government is supposed to be run by Federal Tax Recipts, not Medicare and Social Security recipts. Medicare and SS are like parents and Captol Hill is like the kids who keep stopping by to borrow money. We should create a law that the Senate and House cannot tap any of the SS money. Why should SS be the main subject in any budget that Congress puts together. Social Security should run their own budget. Our politcans dont take Federal Tax and lend it to Social Security and Medicare, they fill the SS bank vault with IOUs. So leave the Social Security money alone and raise taxes on those who have more cars, houses and toilets than they will ever need. In addition raise the income celing that Social Security and Medicare are paid a percentage of, so Congress can start paying back their debt to our Saftey Net program, they are acting like a corporation who borrows against the company pension fund then cant pay the retirement benefits. The Ryan plan does nothing but help those who have more money than they will spend in a lifetime and causes the regular people to struggle and worry about paying for medical bills and food. The Medicaid cuts which are quite large take away from people living at or just above the poverty line. Something has gone terribly wrong with this country and like most I am suspicious, but cannot quite understand why we are allowing our Government to follow a path that drags Main Street down Wall Street in chains. We need to find out who these super wealthy people are that are starting to take hold of all the asset and comodity on the globe. Something smells; maybe it is the unsold food at the grocery store that we cant afford anymore. Leave our new health LAW alone and keep your hands out of the Social Security cash drawer Mr. Congressman.

[hhandyman]

Medicare is insurance we pay a premium for it it pays 80% and we either pay for supplemental insurance to back up the excess debt or try and pay it out of pocket or the doc looses money that may Not be recoverd or may put you in some form of property lean till its paid.

[hhandyman]

its time for those of us on medicare to take Care and rid the government of Right Wing budget cutters that want to put us in the dirt via a cost savings
attempt to trim the Medicare budget.

Re call any political Death pannel excuse called budget ax. thats exactly What the Tea Party supposed right to life people are trying to do thier right to life is a death sentence on those of us that cant pay enough to survive without the proper medical assistance medications and with it we are able to survive. That is the Haves and wealthy want it all and are not willing to share the wealth with the rest of the nation in fact are doing all they can to trim the middle class to the point soon thier will be two classes rich and poor with no steps between. They will be stuck when only the rich survive no one to serve them and then they can choke on thier funds since it will be worthless from inflation. be like Germany where a wheelbarrow full of c notes wont buy a loaf
of bread.

Before this happens vote OUT the republicans and that T party crew or see you too in the flip top box with silk lining all too soon. Im an end stage renal patient without Medicare is a death sentence for a few dollars. Just a fact of My life I guess its to my advantage I know better that my days are numbered with it I could live 30 years with out 3 to 6months. true no one gets out of this world alive Just dont want it to end so quickly because of a few dollars.

[Michelle_In_MT]

I don't think Rep. Ryan can make up his mind. In one place, he states that the health care costs are driven up by providers passing along the short-falls from Medicare payments, but continues to refer to it as a an "open-ended, blank-check nature of the Medicare subsidy". It can't be an open-ended, blank-check program if the costs are passed along to others in the form of rising healthcare costs. They should be getting paid completely for their services and no one else should incur those costs. However, anyone who has dealt with Medicare knows this is not the case. Why else would anyone need a Medicare supplement if it's an "open-ended, blank-check" program? Medicare doesn't not pay all costs and therefore does not meet the condition of open-ended, blank-check.

I am one of the younger workers paying for the baby boomer Medicare. I'll happily continue as long as the services are available in their current state when I'm ready to retire.

[levelheadedtoo]

Mr Ryan is only looking out for himself and his country club buddies. He personally stands to gain allot by cutting his own tax bracket to 25%.

His highest campaign contributors are Insurance, Pharmaceutical and Health care professionals. You can't blame a guy for trying to pay back his employers.

http://www.opensecrets.org/pfds/CIDsummary.php?CID=n00004357&year=2009

[RobAla]

Paul Ryan has the guts to tell the truth and tackle the "untouchables". Finally, someone is doing something. Both President Obama's Debt Commission and the CBO have told us that what we are doing is unsustainable. We have to make changes, and this gets the ball rolling.

Thank you.

[hhandyman]

Ryans responce is pro Lobby pro big business and con the public to a belief that all is hell unless its run by a ceo and the money goes to the big corperate earnings that pays his ad bill so he can run for election again till hes old enough to retire.. on his Federal Pentsion with full health care that no average citizen can get.

[jessytell]

Finally some one that cares enough to tell the truth and actually fix the dam problems instead of pushing them onto our children to fix and pay for.
Anyone that stands in the way of this budget is a traitor to America and dose not give a dam about our children or their future. That is a fact. Now you can probably cut even more. Everyone in the world is telling Obama and the Democrats the dam house is on fire but they are willing to let it burn to the ground.

[tafhdyd]

For every gallon of water the Dems put on the fire the Repubs put on two gallons of gas (imported). The only America they care about is the biggest of corporate America. Big insurance, big pharmaceutical, big oil.

[Mortarman429]

And all Democrats want to do is enslave workers to be forced to give up their labor to hand to other Americans who did nothing to earn that.

Democrats are pro-slavery.