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Paul Ryan: When Obama Says GOP Will Pay for Tax Cuts with Medicare Cuts, He's Not Telling the Truth

12:04 PM, Apr 15, 2011 • By JOHN MCCORMACK
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During his speech on Wednesday at George Washington University, President Obama leveled the accusation that Republicans "want to give people like me a $200,000 tax cut that’s paid for by asking 33 seniors each to pay $6,000 more in health costs.  That’s not right."

Rep. Paul Ryan addresses Wisconsin Army National Guard soldiers.

Opponents of Paul Ryan's budget believe that that charge--that the GOP budget would pay for tax cuts for the wealthy by cutting to Medicare for individuals now younger than 55--is incredibly potent. The New Republic's Jonathan Chait called it the "Achilles Heel" of Ryan's budget. "[Ryan] cuts Medicare and other vital programs in order to finance a huge tax cut for people who don't really need it," wrote Chait.

It may be an effective talking point, but there's one big problem with it, according to Paul Ryan: "It's not true."

"This is nothing but scare tactics," Ryan said at an event hosted by the econmics think tank e21 on Thursday. Ryan explained that his proposal to lower tax rates would not be paid for by cutting Medicare but rather by nixing loopholes and deductions in the tax code.

"What we're saying is keep tax revenues where they are," Ryan said. "We're not talking about cutting taxes. We're talking about keeping taxes where they are and cleaning up the tax code: getting rid of loopholes and deductions, which by the way are enjoyed by the top [tax] rate filers, the people in the top two brackets, and lowering tax rates. A flatter system, a fairer system, a simpler system, one that is more internationally competitive."

The Bowles-Simpson debt commission proposed lowering tax rates along similar lines, but it won't be clear which deductions, credits, and exemptions Republicans would keep until later this summer. "The architecture of the tax system we're proposing for the top rates of 25 percent was given to us by the Ways and Means Committee and then they're going to go down the path of filling in the details," Ryan said.

Ryan later argued that the accusation that he'd finance tax cuts for the rich with Medicare cuts is "mathematically impossible" since his Medicare reform would only go into effect in 10 years. His plan to reform Medicare is not meant to pay for lower tax rates, it's designed to make Medicare solvent and sustainable.

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