The Republican budget proposal will eliminate the national debt while still preserving costly entitlement programs like Medicare and Social Security, Wisconsin Rep. Paul Ryan told CNBC.
Representative Ryan, chairman of the House Budget Committee speaking shortly before the spending plan gets its formal introduction in Congress, later today said the debt will peak at 74.5 percent of gross domestic product in 2014 and then drop from there.
Among the key tenets in a budget resolution to be presented are fundamental changes to the way Medicare and Medicaid are financed. The resolution does not address Social Security, though Ryan said he expects a bipartisan agreement on that issue later this year.
The budget plan includes proposed legislation that Ryan has said will slash $4 trillion from federal spending over the next decade.
The resolution is necessary as a potential shutdown looms over Washington and Congress must approve raising the national debt limit.
Ryan acknowledged the political obstacles he will face both from Democrats and some members of this own party who may bristle at the aggressive spending cuts involved.
"The problem in Washington is, they take any honest and sincere attempt to fix this problem and use it as a political weapon against you in the next election," he said. "We can't let that deter us."
On Fox News Sunday Representative Ryan discussed a controversial overhaul of Medicare, the health care program for seniors, and that the propsed budget would force deep cuts in Medicaid, which provides health benefits to low-income Americans.
Beginning in 2021, elderly Americans would receive government assistance in paying health insurance premiums instead of enrolling in the government-run Medicare program, Ryan said. He rejected the label of "vouchers" for the payments, calling them "premium assistance" payments instead.
The plan is similar to the one he created last year with Alice Rivlin, budget director under President Bill Clinton. The Ryan-Rivlin plan said the amount of assistance would be calculated in part by taking the average federal cost per Medicare enrollee.
The proposal would also:
Reform Tax Code - Remove loopholes in Corporate Tax and reduce rates to 25%
End the authority for Wall Street Bailouts.
Reduce federal spending for the deficit to less than 20% of GDP.
Sources: Jeff Cox CNBC, CNN and Fox News
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