Republicans planning cost curbs on health benefits

WASHINGTON (AP) - House Republicans will "lead with our chin" and offer politically explosive cost curbs this spring on programs like Medicare, Medicaid and perhaps Social Security, the party's point man for curbing crippling budget deficits said Thursday.

Even then, Rep. Paul Ryan acknowledged, the government's budget still won't balance for quite some time.

In a wide-ranging interview with The Associated Press, the Wisconsin lawmaker and chairman of the House Budget Committee said the House Republicans' budget proposal for the 2012 fiscal year that begins Oct. 1 will propose fundamental changes to Medicare and Medicaid, the giant health care programs that cover 100 million Americans and whose combined costs rival the defense budget.

Ryan offered no specifics, saying details are still being hashed out.

Ryan, 41, a rising figure in the GOP, has been tasked with both schooling the 87 new Republican freshmen on the brain-numbing intricacies of the budget and devising a plan to wrestle the deficit under control. Both are big challenges.

"I see a willingness to embrace big things, I see a willingness to tackle the problem," Ryan said, describing the sentiment among Republican freshmen elected on a wave of concern about the growing scope and reach of government.

"When you walk people through just how deep this hole is ... it really does leave a lot of jaws dropping," he said.

Endorsing reduced Social Security checks for future seniors or raising the retirement age is viewed by many Republicans as well as Democrats as political suicide without cover from President Barack Obama. And some see the effort as futile when Republicans control only the House and a presidential election just over the horizon.

Ryan, however, said the debate on how to get the government out of its budget mess has moved far beyond the relatively easy spending tweaks here and there.

"What I'm gonna put forward is a serious and honest attempt to fix this country's fiscal problems," he said.

Under the arcane - and decidedly imperfect - congressional budget process, Ryan is directly responsible for writing a sketchy, nonbinding blueprint each year for running the government. The resolution doesn't require the president's signature, but it does set the framework for actual changes to spending or tax policy in follow-up legislation.

Ryan said he'll lay out the policy prescriptions that form the basis for his measure, which he says he'll unveil in April. Even if it's a dead letter in the Senate, the House's budget resolution will put lawmakers on record behind the cuts.

Ryan was a GOP appointee to Obama's fiscal commission, but he voted against its deficit-reduction plan, saying it didn't do enough to slow the exploding cost of federal health care programs. The commission, however, succeeded in pulling together several Senate Republicans and Democrats in support of controversial ideas like raising the Social Security retirement age and gasoline taxes. It also brought welcome attention to the magnitude of the budget problem.

"I think the country's ready for this kind of discussion even though we are going to lead with our chin and they're going to demagogue us," Ryan said.

Ryan has been calling for big changes to the social safety net for years. Known as "the roadmap," his approach calls for individuals to take on more of the financial responsibility for retirement, including the costs of health care. The government would provide a floor of protection for everyone, particularly the poor and those in failing health, but middle-class people who desire more than a basic plan would have to pay extra.

He's also proposed allowing younger workers to divert part of their Social Security taxes to personal investment accounts, an idea that's lost currency among other Republicans given President George W. Bush's failed 2005 Social Security overhaul and the recent swoon in the stock market.

The plan Ryan rolled out last year for Social Security would gradually increase the full retirement age, from 67 to 70. It would also reduce initial benefits for middle- and high-income retirees.

Ryan said Social Security is the easiest entitlement program to fix - though it is the most dangerous politically to touch - and he was disappointed that Obama didn't address it in his budget proposal.

"Give me a cocktail napkin and I can write you a plan on the back of it," Ryan said. "It's not that hard."

Under the roadmap, Medicare would be converted into a voucher system that offers seniors a fixed payment to pick their coverage from a range of private insurance plans overseen by the government. Today's Medicare recipients and those nearing retirement would remain under the current system, in which the government determines what's covered and sets payments for providers.

As far as Medicaid, the federal-state program that covers low income people and many nursing home residents, Republican governors have been clamoring for a lump sum payment from Washington, a block grant that they could use to design their own state programs without close federal supervision.

Ryan refused to be drawn into specifics on whether and to what degree his past proposals will be part of the plan he will unveil next month. But he hinted that big changes are in store.

"If you want to be honest with the fiscal problem and the debt, it really is a health care problem," he said Thursday. "If you look at the future of our debt, it primarily comes from our health care entitlements. We have to reform those if we are going to get this debt crisis under control."

Many Democrats and even a few Republicans in the Senate say the only way to tackle the nation's financial problems is to address both taxes and spending. But don't expect Ryan's budget plan to include any new taxes.

However, in a break with many Republicans, Ryan did open the door to higher taxes in the future, but only as part of a comprehensive overhaul of the tax code, and only after the big benefit programs have been reformed.

"If we just do a tax compromise without fundamentally fixing spending, then we're just fueling more spending," he said. "Do I believe you can get slightly higher revenues without harming jobs, and get better economic growth? Yes, I do believe that. But I don't think it's a worthwhile exercise if you don't deal with the problem and the problem is spending."

Republicans this week conceded that the government's budget can't be balanced this decade without cutting into current retirees' Medicare and Social Security benefits, something they've indicated they're unwilling to do. But many tea-party activists and junior lawmakers still believe the red ink can be reduced to zero with just a bit more pain, according to Ryan.

"They literally think you can just balance it, you know, (by cutting) waste, fraud and abuse, foreign aid and NPR (National Public Radio)," Ryan said. "And it doesn't work like that."