Rep. Paul Ryan (R-Wis.) announced on Tuesday the Republican budget plan to take into the election debate; it is in sharp contrast to the Obama administration’s budget announced last month. Two key differences stand out: reducing the number of income tax brackets from the current six to just two (10 percent and 25 percent), and cutting corporate income tax rates from 35 percent currently to 25 percent. The Obama administration wants to raise taxes instead.
There were other features to Ryan’s proposal, of course: vouchers for Medicare recipients, and spending cuts to balance the budget by the year 2040. And of course, Ryan’s bill has no chance of passage. Said Ryan: “We don’t expect to make law this year, but we expect to give the country an alternative choice for the future.” Ryan’s plan echoes proposals by Republican presidential candidates Rick Santorum and Mitt Romney, who also want to reduce and simplify the tax code, but is a far cry from the initial first-year $1 trillion cuts proposed by candidate Ron Paul (with a balanced budget in the second year of his first term).
The Heritage Foundation gave Ryan’s proposal an initial approval, saying that it largely met its own criteria for what needs to be done to rein in the government:
- Does it cut spending sharply and quickly?
- Does it begin decisive entitlement reform?
- Does it avoid any tax hikes?
- Does it ensure a strong national defense?
- Does it contain pro-growth tax reforms?
- Does it move swiftly and surely to a balanced budget?
No, says the Heritage Foundation, but it comes close: “It should be bolder in implementing entitlement reforms [and] it should strive for more aggressive