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For Paul Ryan To Balance The Budget In 10 Years, He's Going To Have To Crush Most Government Social Programs

Jan 24, 2013, 00:37 IST

As reward for caving on the debt ceiling this week, Republican House Speaker John Boehner has made a commitment to the conservative wing of his party to pass a budget that balances the nation's books within the next ten years.

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A group of five representatives, lead by House Budget Committee Chair Paul Ryan, will head up the effort to draw this budget.

This is a significant goal. Ryan's previous budget dramatically overhauled social programs and Medicaid, and it took until 2040 to balance the budget. Moving that deadline up by 16 years — to 2024 — will obviously take additional cuts.

Richard Kogan of the Center for Budget and Policy Priorities told New York Magazine that balancing the budget in 2023 would require $800 billion in savings that year.

Federal budget savings can come in the form of either revenue increases or spending cuts. Given the GOP's aversion to raising revenue through tax increases, the question then becomes what will Ryan do to achieve $800 billion worth of budgetary savings by 2023?

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Here's how much it cost to run the government in 2011:

  • $718 billion for defense and international security expenses
  • $731 billion for Social Security
  • $486 billion for Medicare
  • $383 billion for Medicaid and Children's Health Insurance Program
  • $230 billion for interest payments on the national debt
  • $466 billion for Safety net programs: earned-income and child tax credits, Supplemental Security income, unemployment insurance, Supplemental Nutritional Assistance Program (SNAP), school meals, low income housing assistance, energy credits and child-care assistance.
  • $686 billion on federal retiree and veteran benefits, transportation infrastructure, education, science and medical research, international aid and other domestic discretionary spending.

Essentially, the Ryan budget must find $800 billion of that — 22 percent — that can be cut. Cutting the size of the federal government by a fifth over ten years is bound to be painful, so it's important to see what is targeted.

One possibility would be a cut to Social Security and Medicare, possibly with an increase in the eligibility age upwards of 67, but Ryan has explicitly said that he does not want to change Social Security for people older than 55. This effectively rules out a ten-year solution involving Medicare or Social Security, because 56 year-olds won't even get benefits until 2024.

Likewise, Republicans have repeatedly tried to increase defense discretionary spending, so that is also unlikely to see a cut in the new Ryan budget. The government also has to pay the interest on the debt to avoid default, so that is also non-negotiable.

Here's what that leaves:

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  • $383 billion for Medicaid and Children's Health Insurance Program
  • $466 billion for safety net programs: earned-income and child tax credits, Supplemental Security income, unemployment insurance, Supplemental Nutritional Assistance Program (SNAP, otherwise known as food stamps), school meals, low-income housing assistance, energy credits and child-care assistance.
  • $686 billion on federal retiree and veteran benefits, transportation infrastructure, education, science and medical research, international aid, and other domestic discretionary spending.

That leaves a pot of $1.5 trillion that could see a reduction of more than half. Essentially, in order to achieve the cuts without touching Social Security or Medicare or defense spending, you've got to gut the rest of the government's programs.

According to the CBPP, those safety net programs kept 25 million people out of poverty in 2010. Without these programs or Social Security, the CBPP reports that the poverty rate would have doubled to 28.6 percent in 2010.

Unless the new budget includes large upswing in revenue due to a projected rise in GDP, or Republicans are willing to cut sacred cows, the ten-year balanced budget will be the biggest cut in the amount of taxpayer money spent in the United States ever seen before.

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