Ryan budget sets top tax rate at 25%

WASHINGTON - Rep. Paul Ryan, R-Wis., unveiled a $1.014 trillion U.S. budget plan Tuesday that envisions revamping the tax code and social safety net in a declaration of party priorities seven months before the midterm election.

The House Budget Committee led by Ryan called its proposal for fiscal 2015 a “blueprint for the country’s future.” The plan sets a goal of a top individual tax rate of 25 percent, compared with the current 39.6 percent, and calls for increases in defense spending and cuts in nondefense discretionary spending on programs such as national parks and the National Security Agency.

“This is a plan to balance the budget and create jobs, and it builds off a simple fact: We can’t keep spending money we don’t have,” Ryan said in a statement.

Ryan’s proposal, which is set to be formally adopted by the committee today, may serve as a road map for Republicans to follow in the November election that will decide party control of Congress.

Lawmakers will soon begin considering appropriations for fiscal 2015 under a deal Ryan reached in December with Sen. Patty Murray, D-Wash., who heads the Senate Budget Committee.

Their two-year agreement ended months of partisan stalemate over spending and revenue. It set the budget at $1.014 trillion for fiscal 2015 starting Oct. 1, up from $1.012 trillion this year. The Ryan budget plan also includes $85 billion for war funding.

Ryan’s proposal is written to comply with that accord. Military spending through 2024 would rise by $483 billion over the spending caps established in the 2011 Budget Control Act as “consistent with America’s military goals and strategies,” while nondefense spending at Congress’ annual discretion would be cut by $791 billion below those strict limits.

In all, Ryan said, spending would be cut by $5.1 trillion over the next decade. More than $2 trillion of that would come from repealing President Barack Obama’s health-care law.

“Is this year’s House Republican budget, with its even more extreme budget cuts, really just a bad April Fools’ Day joke?” asked Rep. Steny Hoyer of Maryland, the House Democratic whip.

Obama released a budget proposal for fiscal 2015 last month that highlighted Democratic priorities in the election year, including spending to boost low-income families, college students and infrastructure projects. It also envisioned asking more from U.S.multinational companies and higher earners, who would pay a “fair share tax.”

White House press secretary Jay Carney said in a statement that Ryan’s plan would “raise taxes on middle-class families with children by an average of at least $2,000 in order to cut taxes for households with incomes over $1 million.”

The $1.014 trillion total doesn’t include mandated spending on entitlement programs such as Medicare and Social Security that total about two-and-a-half times the discretionary spending.

Including that spending, the budget would reach about $3.7 trillion. Ryan’s plan would balance in the 10th year, assuming the policies in total yield enough economic growth.Democrats said that balance is built on fuzzy logic and cuts that would harm the economy.

“As in previous years, Chairman Ryan relies on gimmicks, magic asterisks and spurious accounting assumptions to presume that his budget will achieve its anticipated deficit savings,” Hoyer said. “His budget simply doesn’t work - and would lead to significant harm for our country.”

Senate Majority Leader Harry Reid, D-Nev., said on the Senate floor that Ryan’s plan would be a path to prosperity for “the really rich” only.

Referring to billionaire energy executives Charles and David Koch, supporters of the Tea Party, Reid called the plan a blueprint for a “Kochtopia.”

“We might as well call it the Koch budget because that’s what they’re doing, protecting the Koch brothers,” Reid said.

The $1.014 trillion cap in fiscal 2015 gives Ryan more spending room than his proposed total last year of $966 billion, which would have required cuts so deep that they weren’t supported by most Republicans.

Ryan is seeking to avoid that sort of opposition and allow Republicans room to make cuts and revise the social safety net. He branded as a failure the U.S. “war on poverty,” which began in the 1960s and now includes 92 anti-poverty programs costing $799 billion annually.

“For too long, we have measured compassion by how much we spend instead of how many people get out of poverty,” Ryan said last month. “We need to take a hard look at what the federal government is doing and ask, ‘Is this working?’”

Even so, budgets don’t actually set spending levels, appropriations bills do. House Appropriations Committee Chairman Hal Rogers, R-Ky., said his panel intends to write spending bills to the levels in the Murray-Ryan budget deal, with a goal of passing all 12 before government funding expires Sept. 30.

Information for this article was contributed by Kathleen Hunter and Michael C. Bender of Bloomberg News and by Jonathan Weisman of The New York Times.

Front Section, Pages 4 on 04/02/2014

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