On Thursday, the Republican-led U.S. House of Representatives passed a spending plan from Budget Committee Chair Paul Ryan that is sure to meet its demise in the Democratic-controlled Senate.
Ryan's $3.5 trillion budget -- dubbed the Path to Prosperity -- passed 228-191 in a vote falling mostly on partisan lines, with 10 Republicans joining the Democratic caucus in voting against it.
House Speaker John Boehner of Ohio praised the plan for making tough decisions on entitlements and cutting spending without raising taxes. He chastised the Senate for dragging its feet on producing a budget, while Republicans in the House passed a blueprint for America's future.
We're making tough decisions to help preserve Social Security and preserve Medicare, Boehner said on the House floor. The United States Senate -- it's been 1,065 days since they passed a budget, 1,065 days, almost three years since they've had the courage to show the American people what their solutions are. I think it's high time that if we're serious about solving America's fiscal problems, the first step is actually doing a budget.
Democrats in the upper chamber railed against the plan for slashing spending on the poor and Medicaid, which gets an overhaul under the Ryan budget. Senate Democrats and President Barack Obama would raise taxes on the rich and end oil company subsidies to offset spending cuts.
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Sen. Max Baucus, a Montana Democrat and Finance Committee chair, said this month the Ryan plan balances the budget on the backs of seniors and the poor, while asking nothing of wealthy Americans, whose taxes would be cut.
The Ryan plan would dismantle Medicare and would end our fundamental promise to America's seniors to provide reliable, guaranteed, affordable health care, Baucus said in a statement. Undermining working families and the middle class the way this plan would will not help our economy grow and create jobs.
Big Cuts, From Spending To Taxes
Entitlement spending has been a tough nut for Congress to crack. Plans to change Medicaid and Medicare -- programs for low-income Americans and the elderly -- caused a political firestorm last year when Ryan's 2011 budget opted to offer states block grants.
Democrats pounced on the 2011 plan, saying it would end Medicare as we know it. The plan was the central issue in a nationally-watched special election that cost the GOP a historically-Republican House seat in Western New York.
Under Ryan's latest budget, Medicaid would again be converted into block grants, while Medicare would offer future seniors tax subsidies to buy into the program or a private plan. The eligibility age would be raised to 67, from 65.
On discretionary spending, there would be a $1.028 trillion cap, which is slightly below a $1.047 trillion cap agreed upon during the 2011 debt-ceiling row. Spending would get a $5.3 trillion cut over the next 10 years, according to the Washington Post.
Further, tax brackets would shrink to two from six, while the top rate would get slashed to 25 percent, from 35 percent, the Post reported. The corporate tax rate would also be cut, by 10 percentage points to 25 percent.