Fiscal Commission and The Path to Prosperity: Side by Side

Provision Fiscal Commission The Path to Prosperity Notes

Long Term Reforms
Medicare Recommends a capped growth Shifts Medicare to a premium Key divergence number one: The Path
Reform rate for Medicare. Provides support system for those 54 and to Prosperity goes beyond savings
various options -- including a younger, modeled after the targets by providing credible, specific
pilot premium-support system -- bipartisan Rivlin-Ryan plan and reforms that fight skyrocketing costs,
that Congress could try to keep included as an option by the make Medicare more progressive, and
growth below that level. Fiscal Commission to ensure save the program for future
that Medicare remains solvent. generations.
"Doc Fix" Calls for reforming the Calls for reforming the
Medicare sustainable growth Medicare sustainable growth
rate for physician payments and rate for physician payments and
fully offsetting the cost. fully offsetting the cost.
CLASS Act Calls for reform or repeal of the Repeals the CLASS Act.
CLASS Act.
Medicare Recommends increasing the Funds targeted increases in
Fraud ability of the Center for anti-fraud accounts, saving $26
Medicare Services to combat billion in waste, fraud, and
waste, fraud, and abuse by abuse in the Medicare,
providing the agency with Medicaid, Unemployment
additional statutory authority Insurance, Supplemental
and increased resources. Security Income, and Disability
Insurance programs.
Medical Calls for common-sense curbs Advances common-sense curbs
Malpractice on abusive and frivolous on abusive and frivolous
Reform lawsuits, saving $17 billion lawsuits, saving $30 billion
through 2020. over ten years.
Medicaid Recommends a capped growth Secures the Medicaid benefit by Key divergence number two: The
Reform rate for Medicaid. Allows converting the federal share of Path to Prosperity goes beyond
expedited application for Medicaid spending into a block savings targets and waivers by freeing
Medicaid waivers in well- grant tailored to meet each states to use a fixed but steadily
qualified states. state’s needs, indexed for growing allotment of federal Medicaid
inflation and population dollars to design programs that meet
growth. the needs of their unique populations.
President's Assumes the implementation of Repeals the architecture of the Key divergence number three: The
Health-Care a new, open-ended health care government takeover of health Path to Prosperity recognizes that the
Law entitlement for non-elderly, non- care to clear the way for open-ended health care entitlement
impoverished Americans. patient-centered reforms. created by the new health care law is
fiscally unsustainable and repeals it.
Social Security Provides comprehensive Reforms a current-law trigger
Reform solution, including a more such that if Social Security is
progressive benefit structure, not in actuarial balance, the
increases in the retirement age, President and both Houses of
and increases in the taxable Congress must put forth reform
maximum. plans. Points towards
provisions in the Fiscal
Commission's plan as positive
steps forward.
Tax Reform
Reduces income tax rates by Reduces income tax rates by Key divergence number four: The
broadening the base. broadening the base. Sets top Path to Prosperity keeps revenue as a
Commission option sets top individual and corporate rates at share of GDP from rising above the
individual and corporate rates at 25 percent. Tax reform is post-World War II average, in
28 percent. Allows revenue as a revenue-neutral and keeps observance of the fact that
share of GDP to rise to 21 revenue as a share of GDP Washington has a spending problem,
percent. within the historical range of 18 not a revenue problem.
to 19 percent.
Government Reform
Attrition Provides for a 10 percent Provides for a 10 percent
Policy reduction in the Federal reduction in the Federal
workforce. workforce.
Federal Pay Freezes federal pay through Freezes federal pay through
2015. 2015.
Other Mandatory
Federal Equalizes the cost sharing of the Equalizes the cost sharing of
Benefits Federal Basic Benefit between the Federal Basic Benefit
the employee and the employing between the employee and the
agency; uses the highest five employing agency.
years of earnings in determing
civil service pension benefits;
defers COLAs for retirees in the
current system until age 62.
Agriculture Reduces spending on mandatory Reduces spending on
Spending agriculture programs by $10 mandatory agriculture programs
billion from 2012 through 2020. by nearly $30 billion from 2012
Recommends that savings through 2021. Recommends
should be drawn from reforms that savings should be drawn
in the direct-payment, from reforms in the direct-
conservation, and export- payment, crop insurance, and
assistance programs. export-assistance programs.
Education Eliminates in-school subsidies Eliminates in-school subsidies
Spending in Federal Student Loan in Federal Student Loan
programs. programs.
PBGC Reform Provides PBGC authority to Calls for reform of PBGC.
increase premiums. Saves $8 Assumes outlay savings of $2.7
billion over ten years according billion over ten years.
to CBO.
FCC Spectrum Extends FCC spectrum auction Extends FCC spectrum auction
authority. authority.
Federal Real Sells excess federal property. Sells excess federal property;
Property Sales streamlines asset-sale process;
calls for enforceable targets for
asset sales.
Discretionary Spending
Non-Defense Freezes spending in 2012 at Reduces non-security
2011 levels, returns to 2008 discretionary spending to below
levels in real terms by 2013. 2008 levels in 2012, freezes for
Limits future discretionary five years, grows with inflation
growth to half of projected thereafter.
inflation through 2020.
Defense Requires equal percentage cuts Assumes Secretary Gates levels
from Defense and non-Defense. for the Department of Defense.
Process Reforms
Discretionary Includes enforceable caps on Includes enforceable caps on
Caps discretionary spending. discretionary spending.
Long-term Establishes a debt-stabilization Includes overall spending caps
Budgeting process. for long-term spending.

To learn more about House Budget Committee Chairman Paul Ryan’s views on the National Commission on Fiscal
Responsibility and Reform: http://budget.house.gov/News/DocumentSingle.aspx?DocumentID=217405