–House Budget Chairman: Plan Calls For $6.2 Trillion In 10Yr Savings
–Trying To ‘Preempt’ Debt Crisis
–Must Move Now To Fix Budget ‘On Our Terms’
–GOP Plan Is ‘Same Tired Formula’ Of Deep Tax Cuts
–Republican Plan Is Not Sufficiently ‘Balanced’
–House Budget Committee Is Now Considering Ryan’s Fiscal Blueprint

By John Shaw

WASHINGTON (MNI) – House Budget Committee Chairman Paul Ryan
Wednesday formally proposed his sweeping fiscal year 2012 budget
resolution that calls for more than $6 trillion in ten year spending
cuts and would reduce deficits by about $4.4 trillion below what
President Obama’s budget would yield.

At the start of the House Budget Committee’s deliberations on his
FY’12 budget resolution, Ryan said his plan would fundamentally change
the trajectory of the nation’s spending and tax policies and begin to
drive deficits downward.

“This is not a budget, this is a cause,” he said.

Ryan called his budget “a plan to save America from a debt crisis.”

“We can still get this under control,” he said, referring to the
U.S.’s federal budget. “We can still do this on our terms,” he said.

Rep. Chris Van Hollen, the top Democrat on the Budget Committee,
said the U.S.’s “top priority must be a robust recovery” that leads to
“sustained long-term economic growth.”

Van Hollen said a “disciplined plan” is need for “steady,
responsible and predictable” deficit reduction.

But Van Hollen said Ryan’s plan is deeply “unbalanced” and would
make sharp cuts in critical spending programs while extending Bush era
tax cuts that have produced few jobs and meager economic growth. He said
it represents “the same tired formula” that has shaped GOP budgets for
years.

Ryan has said his plan would reduce federal spending to 20% of
gross domestic product by 2015.

Under his proposed plan, budget deficits would fall from $1.39
trillion in FY’11 to $995 billion in FY’12, $699 billion in FY’13, $492
billion in FY’14, $434 billion in FY’15, $481 billion in FY’16, $408
billion FY’17, $379 billion in FY’18, $414 billion in FY’19, $402
billion in FY’20 and $385 billion in FY’21

For the FY’12 to FY’21 period, Ryan’s plan generates $5 trillion in
cumulative deficits. Ryan has acknowledged that his plan would not
balance the federal budget until the late 2030s.

Ryan’s budget recommends a major overhaul of the tax code and
reducing the top corporate tax rate to 25%.

Ryan’s proposal comes in the form of a proposed fiscal year 2012
budget resolution. Budget resolutions are congressional blueprints that
outline spending and revenue goals and make deficit projections.

Budget resolutions do not have the force of law.

If a budget resolution passes Congress it could trigger other
legislation that, if approved and signed by the president, has the force
of law.

Ryan’s plan is likely to approved by the House Budget Committee on
a party line vote late Wednesday night. Then the full House will take up
the resolution next week.

Even if it passes the House, Ryan’s plan stands no chance of
passing the Democratic-led Senate.

Senate Budget Committee Chairman Kent Conrad, a Democrat, has
indicated that he is working on fiscal blueprint that has about $4
trillion in ten year savings. But Conrad’s plan is likely to outline a
much different path to achieve these savings.

** Market News International Washington Bureau: (202) 371-2121 **

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