Paul Ryan unveils $4.6 trillion budget plan

WASHINGTON (USA TODAY) -- House Republicans unveiled a budget Tuesday that would balance the nation's books in 10 years without raising taxes but by eliminating President Obama's health care law, revamping Medicare for future retirees and creating just two tax brackets for individuals -- 10% and 25%.

Read: Paul Ryan's proposed budget (PDF)

The conservative blueprint stands no chance of gaining traction with Senate Democrats or Obama, but the plan is a starting point for renewed debate about how to balance the budget. Senate Democrats, for the first time since 2009, will unveil a competing budget on Wednesday.

"We're offering a credible plan for all the country to see. We're outlining how to solve the greatest problems facing America today. Now we invite the president and Senate Democrats to join in the effort," Budget Chairman Paul Ryan, R-Wis., wrote in a Wall Street Journal column outlining the plan.

The GOP-controlled House is scheduled to approve the non-binding budget resolution next week.

Key elements of the GOP budget include:

- A balanced budget achieved in a decade by not allowing the government to spend more than it collects in revenue, which Republicans set at 19.1% of gross domestic product. By their measure, the federal government will spend $4.6 trillion less over the next decade.

- A 3.4% annual increase in spending each year, but Republicans estimate the economy will grow by a faster margin to help balance the books.

- Authorizes construction of the Keystone XL pipeline.

- A full repeal of Obama's health care law.

- Support for new laws to limit medical malpractice liabilities.

- A fundamental overhaul of the Medicare system for future retirees. Starting in 2024, seniors would be given a federal subsidy to purchase health care from the private market, instead of the guaranteed benefit system that currently exists. It also calls for wealthy seniors to pay more for premiums.

- A transfer of power to states to determine how Medicaid and other funds should be spent on programs, including food stamps.

- An increase in defense spending over current law.

- A plan to transform the tax code to simplify it from seven individual tax brackets to two, as well as a repeal of the Alternative Minimum Tax and a 25% corporate tax rate.

- A requirement that the president and Congress offer respective proposals for the long-term solvency of Social Security.

The outline is similar to the two previous budgets offered by House Republicans. Ryan acknowledged that their Medicare proposal is politically sensitive.

"The other side will demagogue this issue. But remember: Anyone who attacks our Medicare proposal without offering a credible alternative is complicit in the program's demise," he wrote.

Senate Democrats are likewise on track to vote on their budget next week. The president has not yet sent his budget request to Congress. It is not expected until early April.

The two chambers are unlikely to reconcile the competing budget plans, but approval in the House and Senate by April 15 will ensure that lawmakers can still collect their paychecks.

A law passed earlier this year mandated that lawmakers approve a budget by the April deadline or their salaries would be held in escrow until a budget was passed or the current Congress ended in January 2015.