A comparison of President Barack Obama's latest deficit reduction proposal with a Republican plan written largely by Rep. Paul Ryan of Wisconsin, and expected to get a House vote this week:
DEFICIT
Without changes to current law, budget deficits will total $7 trillion over the next decade, the Congressional Budget Office projects. The deficit is the difference between the government's outlays and its income in a fiscal year. Both Obama's and Ryan's proposals are vague in several areas.
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Obama proposes reducing deficits by $4 trillion over 12 years, with $3 trillion coming from spending reductions and $1 trillion from additional revenue. The president wants to resurrect a "trigger" that would enact automatic spending cuts if deficits haven't stabilized by 2014.
Ryan's budget proposes spending cuts of $5.8 trillion over 10 years.
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MEDICARE AND MEDICAID
Obama and Ryan want to squeeze significant savings out of the health care programs for the elderly, poor and disabled. Both assume the $500 billion in claimed savings over 10 years from projected increases in Medicare spending that was part of the health care law enacted last year. They would cut dramatically different amounts from the programs.
—Obama would leave Medicare and Medicaid basically in their current forms, but cut at least $200 billion more from Medicare over 10 years and $100 billion from Medicaid. Obama lays out a mix of generalities and specifics on how to get there, including empowering an independent advisory board to hold down growth in Medicare spending, seeking to use Medicare's bargaining power to negotiate lower prescription drug costs, improving patient safety and setting limits on Medicaid payments for certain medical devices.
—Ryan would repeal Obama's signature health care overhaul and recast Medicare and Medicaid, while cutting Medicare spending by an additional $30 billion over the $500 billion cuts in projected increases in the new health care law. People now 54 and younger would get a voucher-style federal payment to purchase coverage from private plans instead of the government making payments to health care providers for services to Medicare beneficiaries. He would cut $771 billion from Medicaid over 10 years. Poor people would get federal money from states, which would receive it in block grants.
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SOCIAL SECURITY
Both plans don't touch Social Security, the politically sacrosanct retirement program for older Americans.
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TAXES
Obama proposes an overhaul of the tax system that would eliminate tax breaks and loopholes and even lower some tax rates, resulting in $1 trillion in additional revenue.
Obama also wants to allow Bush-era tax cuts to expire for individuals making $200,000 or more a year and couples making $250,000 or more. However, the revenue that would generate is not counted in his deficit-reduction plan because under existing law the cuts would expire on their own at the end of 2012.
Ryan's budget would scrap numerous tax breaks and loopholes in exchange for reducing the top income tax rate for both individuals and corporations from 35 percent to 25 percent. He would extend the Bush-era tax breaks for all income levels.
Copyright 2011 The Associated Press.
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