(Bloomberg) Republican Representative Paul Ryan unveiled a $1.014 trillion U.S. budget plan that envisions revamping the tax code and social-safety net in a declaration of party priorities seven months before the midterm election.

The House Budget Committee led by Ryan called its proposal for fiscal 2015 a “blueprint for the country’s future.” The plan released today sets a goal of a top individual tax rate of 25 percent, compared with the current 39.6 percent, and calls for increases in defense spending and cuts in non-defense discretionary spending on programs such as national parks and the National Security Agency.

“This is a plan to balance the budget and create jobs, and it builds off a simple fact: We can’t keep spending money we don’t have,” Ryan of Wisconsin said in a statement.

“Ultimately, the budget is more than a list of numbers,” according to a committee outline of the proposal, which will be considered by the panel tomorrow and reach the floor of the House of Representatives next week. “It’s an expression of our governing philosophy.”

Ryan’s proposal may serve as a road map for Republicans to follow in the November election that will decide party control of Congress. Lawmakers will soon begin considering appropriations for fiscal 2015 under a deal Ryan reached in December with Democratic Senator Patty Murray of Washington, who heads the Senate Budget Committee.

Partisan Stalemate
Their two-year agreement ended months of partisan stalemate over spending and revenue. It set the budget at $1.014 trillion for fiscal 2015 starting Oct. 1, up from $1.012 trillion this year. The Ryan budget plan also includes $85 billion for war funding.

Ryan’s proposal is written to comply with that accord. Murray has said the Senate won’t consider a budget plan because the top-line spending deal has already been reached.

“I believe we’ll abide by the budget agreement that we’ve already made,” House Speaker John Boehner, an Ohio Republican, told reporters March 25.

President Barack Obama released a budget proposal for fiscal 2015 last month that highlighted Democratic priorities in the election year, including spending to boost low-income families, college students and infrastructure projects. It also envisioned asking more from U.S. multinational companies and higher earners, who would pay a “fair share tax.”

Middle-Class Families
White House press secretary Jay Carney said in a statement that Ryan’s plan would “raise taxes on middle-class families with children by an average of at least $2,000 in order to cut taxes for households with incomes over $1 million.”

The $1.014 trillion total doesn’t include mandated spending on entitlement programs such as Medicare and Social Security that total about two-and-a-half times the discretionary spending.
Including that spending, the budget would reach about $3.7 trillion. Ryan’s plan would balance in the 10th year if one assumes the policies in total yield enough economic growth.

“We owe it to the American people to demonstrate how we will allocate their tax dollars and balance the budget,” House Majority Leader Eric Cantor said in a March 21 memo.

Ryan’s budget calls for increases in defense spending and cuts in non-defense discretionary spending to stay within the caps agreed to with Murray, said Loren Duggan, chief legislative analyst for Bloomberg Government. Domestic programs would be reduced by $791 billion from fiscal 2016 to 2024, while defense spending would be $483 billion more than envisioned under current law, he said.

Fuzzy Logic
Democrats say that balance is built on fuzzy logic and cuts that would harm the economy.

“As in previous years, Chairman Ryan relies on gimmicks, magic asterisks, and spurious accounting assumptions to presume that his budget will achieve its anticipated deficit savings,”

Steny Hoyer of Maryland, the second-ranking House Democrat, said in a statement. “His budget simply doesn’t work—and would lead to significant harm for our country.”

Senate Majority Leader Harry Reid, a Nevada Democrat, said on the Senate floor that Ryan’s plan would be a path to prosperity for “the really rich” only.

Referring to billionaire energy executives Charles and David Koch, supporters of the small-government Tea Party, Reid called the plan a blueprint for a “Kochtopia.”

“We might as well call it the Koch budget because that’s what they’re doing, protecting the Koch brothers,” Reid said.

Spending Room
The $1.014 trillion cap in fiscal 2015 gives Ryan more spending room than his proposed total last year of $966 billion, which would have required cuts so deep that they weren’t supported by most Republicans.

Proposed spending cuts in future years, intended to balance the budget while avoiding large tax increases, may be a political liability in the Nov. 4 election that will determine control of the Republican-held House and Democratic-held Senate.

Last year, Republicans retreated from Ryan’s plan to cut food-stamp spending by about $135 billion, or almost 18 percent, over 10 years. Anti-hunger advocates and Democrats said it would hurt children. Lawmakers eventually agreed to $8.6 billion in cuts over 10 years, though several states have found ways to avoid the cuts entirely.

Safety Net
Ryan is seeking to avoid that sort of opposition and allow Republicans room to make cuts and revise the social safety net. He branded as a failure the U.S. “war on poverty,” which began in the 1960s and now includes 92 anti-poverty programs costing $799 billion annually, and urged lawmakers not to measure success by what they spend.

“For too long, we have measured compassion by how much we spend instead of how many people get out of poverty,” Ryan said March 3. “We need to take a hard look at what the federal government is doing and ask, ‘Is this working?’”

Even so, budgets don’t actually spend money, appropriations bills do. House committees may consider spending bills for military construction and the Veterans Affairs Department, as well as for the legislative branch itself, as soon as this week.

House Appropriations Committee Chairman Hal Rogers, a Kentucky Republican, said his panel intends to write spending bills to the levels in the Murray-Ryan budget deal, with a goal of passing all 12 before government funding expires Sept. 30.

—With assistance from Kathleen Hunter and Michael C. Bender in Washington.

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