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Obama vs. Ryan: How Their Deficit Plans Compare

Wednesday, 13 Apr 2011 03:24 PM

President Barack Obama set a goal of reducing the U.S. deficit by $4 trillion within 12 years or less, in a speech outlining his plan to tackle the country’s massive debt problem. House Budget Committee Chairman Paul Ryan has laid out a dramatically different vision of a future debt-free America. Here’s a snapshot of how they compare.


Obama believes a goal of $4 trillion in deficit reduction over 12 years or less is achievable, and projects that it will reduce deficits as a share of the U.S. economy to about 2.5 percent of GDP in 2015, and put deficits on a path toward close to 2.0 percent of GDP toward the end of the decade.

Ryan’s 2012 budget reduces deficits over the next decade by $4.4 trillion, calls for $5.8 trillion in spending cuts and also calls for lower tax rates for businesses and individuals.


Obama suggests cuts in non-security discretionary spending will generate an additional $200 billion in savings over 10 years, beyond the $400 billion in savings in the fiscal 2012 budget proposal he offered in February. The White House said that would generate $770 billion in deficit reduction over 12 years.

Obama’s debt reduction framework sets a goal of holding the growth in base security spending below inflation, while ensuring the capacity to meet national security responsibilities, which would save $400 billion by 2023, the White House said.

In addition to savings already presented in Obama’s budget to such programs as agricultural subsidies and the federal pension insurance system, Obama’s plan includes a target of $360 billion in savings from other mandatory programs by 2023, the White House said.

Ryan’s budget reflects $178 billion in savings identified by Defense Secretary Robert Gates. Some $100 billion is reinvested in combat capabilities and the rest is used for deficit reduction. Ryan calls for bringing other spending down to 2008 levels and freezing it there for five years.


In addition to his healthcare overhaul law, Obama is proposing reforms to the government’s Medicare and Medicaid insurance programs for the elderly and poor that the White House said would save $340 billion over 10 years and $480 billion by 2023, including proposals already included in Obama’s budget. Over the subsequent decade, the president’s proposal will save well over $1 trillion, the White House said.

Ryan’s proposal would dramatically alter Medicare and the traditional fee-for-service program would eventually be eliminated. To save the federal government money, seniors would be given federal subsidies based on income and health status to shop for health coverage from private insurers. Medicaid would become a block grant program where the federal government gives states a chunk of money to run the health program for the poor without federal interference.


Obama is calling on Congress to undertake comprehensive tax reform that produces a system that is fairer, has fewer loopholes, is less complex and is not rigged in favor of those who can afford lawyers and accountants to game it, the White House said.

Ryan’s plan would cut the top tax corporate and personal tax rates to 25 percent, down from 35 percent. He calls for repealing Obama’s healthcare overhaul and the roughly $800 billion in tax increases contained in the law.


Obama’s plan calls for efforts to strengthen the government’s Social Security pension system but does not seek to privatize it. A factsheet on the plans offered no specifics.

Ryan’s plan includes no specifics on Social Security. He calls for bipartisan efforts to improve its finances.

© 2015 Thomson/Reuters. All rights reserved.

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