Ryan: GOP budget is alternative to debt, decline

(CBS News) Republican Congressman Paul Ryan on Sunday defended his controversial 2013 budget proposal, telling CBS' "Face the Nation" that the plan would help America avoid a debt crisis while creating jobs and spurring economic growth.

"We're putting the budget on a path to balance and to pay the debt off. We want to avoid a debt crisis. The president's budget brings us closer to a debt crisis," Ryan told CBS' Norah O'Donnell.

Ryan's proposed budget, which he unveiled last week, drew immediate criticism from Democrats, who say it places the burden of reducing the deficit solely on the backs of the middle-class and the elderly.

Ryan on Sunday argued that his proposal requires sacrifice from all Americans - and disputed the White House claim that it would give millionaires a $150,000 tax cut.

"Those numbers are obviously not credible," Ryan said.

In addition to adding a private insurance option for seniors using Medicare, Ryan's budget would overhaul the tax code and would create just two income tax brackets - 25 percent and 10 percent. The proposal is unlikely to pass the Senate, controlled by Democrats, and has little chance of becoming law. It does, however, set up an ideological battle between the left and the right over budget priorities as the 2012 election nears.

Under Ryan's plan, the tax rate for those in the top bracket would drop from 35 percent to 25 percent. Yet Ryan argues the budget is not "proposing tax cuts" for the wealthy; rather, he says it cleans up the tax code in general.

"We're proposing to keep revenues where they are, but to clear out all the special interest loopholes which are uniquely enjoyed by higher-income earners in exchange for lower rates for everyone - a simpler, flatter, more competitive tax system to create jobs and economic growth and bring at least as much revenue into the government as we're bringing now but in a fairer way, so that everybody pays the same tax rate when they make the same amount of money instead of picking winners and losers in Washington, which is the kind of tax code that the president supported," he said.

The Wisconsin Republican also defended changes the budget would make to Medicare and Medicaid - including $810 billion in cuts to Medicaid, and the implementation of a voucher-like system for Medicare.

"How can you guarantee people that you're not giving tax cuts to the wealthiest and taking away aid to the poor?" O'Donnell asked Ryan.

"Because we want economic growth and job creation," he said. "And the tax code is stifling job creation. And what we propose in Medicaid is, let the governors and the states - give them the flexibility to customize Medicaid to meet the unique needs of their populations."

"But you don't deny that you're cutting $810 billion from Medicaid?" O'Donnell pressed.

"No, actually, we get $810 billion in savings," Ryan said. "But we still grow Medicaid each and every year under our formula."

Ryan argued that states should be able to determine the implementation of the proposed cuts.

"We're saying block grants to the states so they can decide how best to achieve these savings," he said. "On Medicare, the president's health care law caps Medicare spending, but he puts a board of 15 unelected bureaucrats in charge of cutting Medicare in ways that deny care to current seniors. We say get rid of the board and put 50 million seniors in charge of their own Medicare instead of having these 15 bureaucrats make those decisions."

The prominent Republican said he was confident Mitt Romney or any other Republican presidential nominee would enact most parts of the plan if elected president.

"I'm not expecting everybody to enact every little piece of this. But, yes, he and the other candidates running for President have embraced these kinds of reforms," Ryan said.

Democrats last week began a coordinated assault on the Ryan proposal, arguing that it prioritizes the interests of the wealthy over the middle-class and that it would send seniors to the "poorhouse."

Still, Ryan said Sunday he wasn't worried that his plan could hurt the GOP's chances in the 2012 election.

"I think the party - the country is smarter than this," he said. "People in America are ready to be talked to like adults. They don't want to be pandered to like children. And we feel we owe the country a sharp, clear difference, a choice of two futures so they can decide what kind of country we want to be."