Paul Ryan: Obama engaged in "class warfare"

In a speech to the Economic Club of Chicago Monday, House Budget Committee Chairman Paul Ryan (R-WI) suggested President Obama and Ryan's Democratic critics are "sowing social unrest and class envy" by pushing a tax increase on the wealthiest individuals in order to help address the deficit and debt.

"The president says that only the richest people in America would be affected by his plan," Ryan said, arguing that "class warfare may be clever politics, but it is terrible economics."

Ryan complained that Mr. Obama wants to increase the top tax rate to 44.8 percent. The president has pushed for an increase in the top marginal tax rate for families making over $250,000 per year from 35 percent to 39.6 percent.

"Sowing social unrest and class envy makes America weaker, not stronger," the Wisconsin Republican argued, suggesting the "true sources of inequity" in America are corporate welfare and empty promises.

He said the "real class warfare" that threatens Americans is "a class of governing elites picking winners and losers, and determining our destinies for us."

Ryan and his Republican colleagues oppose raising taxes to address the nation's deficit and debt, arguing that the focus should be entirely on spending cuts. His speech was meant in part to push back against Democratic critics of the Ryan budget passed by House Republicans, which would transform Medicare into a voucher-like system to purchase private insurance. The voucher-like system would potentially leave some seniors unable to pay for coverage as health care costs increase.

Ryan said his plan "offers future generations a strengthened Medicare program they can count on, with guaranteed coverage options, less help for the wealthy, and more help for the poor and the sick."

"Our plan is to give seniors the power to deny business to inefficient providers," he said. "Their plan is to give government the power to deny care to seniors."

In an April speech, Mr. Obama cast the Republican plan as one that would make Medicare "a voucher program that leaves seniors at the mercy of the insurance industry, with a shrinking benefit to pay for rising costs."

Democrats are already running ads accusing Republicans of seeking to "end" Medicare and contrasting it with Republican opposition to ending subsidies for big oil companies.

Both parties have put forth plans they say will save trillions of dollars over the next decade. While Mr. Obama's plan calls for increasing taxes on the rich, the House Republican plan lowers taxes on the rich.

Ryan said the Republican plan reflects "responsible choices today, so that our children don't have to make painful choices tomorrow."

He said "health care costs spiraling out of control" are driving the debt and must be dealt with. Yet the budget debate, Ryan argued, "has degenerated into a game of green-eyeshade arithmetic, with many in Washington - including the president - demanding that we trade ephemeral spending restraints for large, permanent tax increases."

"This sets up a debate in which we are really just arguing over who to hurt and how best to manage the decline of our nation," he said. "It is a framework that accepts ever-higher taxes and bureaucratically rationed health care as givens."

Because higher taxes on wealthier Americans won't eliminate the deficit, Ryan argued, eventually "austerity will be the only course left."

"A debt-fueled economic crisis will force massive tax increases on everyone and indiscriminate cuts on current beneficiaries - without giving them time to prepare or adjust," he said.

The Republican Medicare plan has caused some dissent among Republicans, with presidential candidate Newt Gingrich casting it as "social engineering" and Democrats campaigning on it in a surprisingly close special election in a conservative upstate New York district.