Republicans Terrified

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Fortune: Paul Ryan's big plans for a small budget

Posted: November 4th, 2010 -- 12:30 PM ET

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The Republican victory in the House will likely make Paul Ryan (R-Wis.) the new chairman of the Budget Committee, where, at age 40, he's now his party's ranking member. From that powerful seat, Ryan plans to shape legislation that would impose strict restraints on spending, and tackle entitlement reform - a challenge that terrifies most of his fellow Republicans.

Ryan has been shaping a detailed plan to achieve a balanced budget strictly through dramatic reductions in spending, with no tax increases, for years. He spells out those ideas in great detail in his Roadmap for America's Future, a favorite target for the Obama administration. Put simply, Ryan's blueprint would preserve generous Social Security and Medicare benefits for the poor and sick who need those programs the most, while reducing payments for the wealthy and middle class Americans in the future.

But those reductions come with an intriguing free market twist: He'd introduce Medicare vouchers, for example, that could lower prices by turning seniors into informed bargain hunters for healthcare. The concept is that market discipline would lower prices, giving middle class consumers more buying power to cushion the lower benefits that, Ryan says, are inevitable legacy of future promises that can't be met.

Full story on CNNMoney.com