Republican vice presidential candidate Paul Ryan and his family. (Getty Images)

When Republican presidential hopeful Mitt Romney ended months of speculation and rumor by choosing U.S. Rep Paul Ryan of Wisconsin to fill out the ticket, he got more than just a vice presidential candidate. He hitched his wagon to a Tea Party star, a fiscal-policy super-wonk and author of a budget proposal that Democrats hold up as an example of the economic evils the GOP would visit on America if they were in charge.

While many running mates fade into irrelevance and obscurity either during the election or soon thereafter, Paul Ryan may turn out to be a political horse of a different color.

He's no shrinking violet, for starters, and can masterfully and forcefully present his free-market, fiscal-policy beliefs. As such, he seems to be on the Romney ticket for a reason: to bring serious economic firepower to the GOP presidential ticket and, if Romney is elected president, possibly play a prominent role in shaping U.S. economic policy.

Here's a look at some of the ways Ryan's budget proposals contrast with President Obama's, using figures from The Wall Street Journal:

1. Individual income taxes: Ryan's plan would do away with the arcane tax code we've all come to know and loathe, replacing it with two simple rates: 10% and 25%. To compensate for the revenue that would cost, he would limit and eliminate tax credits and tax deductions. This, as he put it, would help clear out the "burdensome tangle of loopholes that distort economic activity."

Obama's plan calls for raising the top-tier individual tax rate from 36% to 39.6%, and for limiting deductions for the wealthy.

2. Corporate income taxes: Ryan's plan calls for corporate taxes to be lowered to 25%; they're now 35%, the highest in the world -- before the tax breaks begin. Obama's plan calls for lowering them to 28%, but eliminating the tax breaks and loopholes many businesses now take advantage of.

Ryan's plan would also make it easier for U.S. multinationals to reduce their tax liability on foreign profits. Currently, many corporations, like Microsoft (MSFT) and Apple (AAPL), keep money that's made overseas in foreign bank accounts in order to defer paying U.S. tax. Ryan has previously proposed replacing the corporate income tax entirely with an 8.5% business consumption tax, but in more recent budget proposals, he took out that provision.

3. Medicare: Medicare is the government-run health-care system for those age 65 and over. Ryan's plan calls for the gradual raising of the eligibility age to 67 and giving those younger than 55 the chance to opt out of Medicare in exchange for participation in a federally supervised private voucher system.

Obama would keep the current system essentially unchanged, but raise premiums or copays for the wealthy. Ryan's plan calls for no changes for anyone currently over the age of 55.

4. Medicaid: Medicaid is government-run health care for the poor and other groups. Ryan's plan calls for it to be turned into a block-grant program, essentially letting each state administer the federal dollars as they see fit, which Ryan argues will allow for substantial savings in appropriations for the program.

Obama's plan would keep Medicaid pretty much as is, as his hoped-for expansion was struck down in the recent Supreme Court ruling on the Patient Protection and Affordable Care Act, aka Obamacare. The ruling gives states flexibility in how much coverage they offer their residents, and whom they cover.

5. Defense spending: Ryan's plan calls for reversing the president's planned defense cuts and would appropriate $554 billion for defense in fiscal 2013. Ryan, like most Republicans, is hawkish on defense spending.

6. Deficit: The budget deficit -- the difference between what the federal government currently spends and what it raises in tax revenue -- currently stands at about 7.8% of gross domestic product, or GDP.

Ryan's plan calls for the federal deficit to be reduced to 4% of GDP by 2014 and 0.9% by 2017. Obama's plan is slightly less aggressive, and calls for a reduction to 3.9% of GDP by 2014 and 3% by 2017.

Picking Ryan as a running mate is a bold move on Romney's part, so long as he doesn't do what so many other presidential candidates have done and immediately shove his running mate to the sidelines, or completely ignore him if they win the election. Let's hope his choice will help elevate the presidential debate from a mud-slinging match to a real debate on issues of import to voters and the country.

John Grgurich is a regular contributor to The Motley Fool. The Motley Fool owns shares of Apple and Microsoft. Motley Fool newsletter services have recommended buying shares of Apple and creating a bull call spread position on Microsoft and Apple.

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Nanci Little

And WHAT happens to those 55 and younger under Ryan's plan for Medicare? Fight the insurance companies all during your old age. what fun! But it will kill people sooner from all that stress. Ask me I know. Just fought with our 'good' insurance company re: surgery for a broken ankle. Doctor keeps me in hospital 7 days.. $55,000.00.. and insurance says for a broken bone surgery 3 days is IT and the rest is on me! WEEKS after the fact.. Not like I COULD have checked out of the hospital. OR done what Ryan and the R's say... go shopping for a cheaper hospital? Insanity! The security of Medicare makes getting old bearable... not fun, not free of fear or pain... but bearable! Going back to fighting over every bill? Insanity! And what if there are lots of old people that DID NOT take their voucher and shop.. or did but could not FIND any insurance that would take them. What to DO with them, in hospital, terminally and expensively ILL?? What to do with THEIR bills? Are we back to square one where the REST of insurance premiums just keep going UP?

October 02 2012 at 9:53 PM Report abuse rate up rate down Reply

All this talk about "entitlements" is a smoke screen. Medicare is an EARNED BENEFIT, Social Security is an EARNED BENEFIT, Veteran's assistance is an EARNED BENEFIT. Those who "feel entitled" are those at the top who think they are worth multimillion dollar compensation packages. Defense contractors "feel entitled" to keep ALL their programs and not have to cut waste and answer for fraud and abuse of the system. Those who "feel entitled" are lobbyists who think the revolving door of government is just fine the way it is. Congress "feels entitled" to their own healthcare for life and to respect for not doing their job of GOVERNING. Better yet, half the Congress has sworn allegiance to an unelected man and thus violate their sworn oath to the Constitution. This man feels entitled to speak for people without facing an election himself.

August 19 2012 at 11:25 AM Report abuse +2 rate up rate down Reply

Since Romney has failed so badly, I guess Ryan is in charge. Unfortunately, Paul Ryan is a hypocrite. On February 14, 2002 under Pres. Bush fought for a stimulus package to help people get back to work and won. Claims stimulus has proven to help the economy. He argued, "You have to spend a little to grow a little" This is a fact. Watch - Paul Ryan Defended Stimulus -- When George W. Bush Wanted It In 2002 (VIDEO). I agree with factsrfun1 "THE RYAN BUDGET IS IMMORAL!!" - Nuns On The Bus

August 19 2012 at 10:01 AM Report abuse +4 rate up rate down Reply
codifex maximus

So, it's the Ryan Plan now? Who's gonna be the Republican Presidential hopeful? Romney or Ryan?

August 18 2012 at 10:14 PM Report abuse +1 rate up rate down Reply


August 17 2012 at 11:07 PM Report abuse +1 rate up rate down Reply
Debbie Penland !

We a-l-l know the Dems never stick to "only the wealthy" always ends up hurting the "working middle class" the hardest!!! Something h-a-s to be done or there will n-o-t be a-n-y-t-h-i-n-g left to even "WORK W-I-T-H"...can you say "BUSTED"!!!??? OUT OF FUNDS COMPLETELY???

August 17 2012 at 11:04 PM Report abuse -1 rate up rate down Reply
1 reply to Debbie Penland !'s comment

You need to read the Ryan plan. It will add about $2000 more in taxes on those in the middle class. It relies on trickle down economics which has been a failure since 1981.Saint Reagan had to raise taxes 11 times to make up for his tax cuts at the beginning of his administration. Thank goodness Grover Norquist was just a child then. Which is when he came up with his plan anyway. We have a 12 year old's plan holding the country hostage. President Obama's jobs plan has many elements to stimulate growth in the economy. Remember Ryan was for stimulus under Bush and only turned against it under Obama

August 19 2012 at 11:31 AM Report abuse +2 rate up rate down Reply

Obama thinks medicare taxes we all paid is his personal checking account . To the tune of 700 + billion.

August 17 2012 at 6:01 PM Report abuse -1 rate up rate down Reply
2 replies to phillipmonagle's comment

IF you are talking about the magic 716 billion figure, so is Ryan. He just calls it by a different name- vouchers.

August 19 2012 at 11:32 AM Report abuse +1 rate up rate down Reply

phillip.....The 716 billion that Obama cuts or eliminates is the Medicare part D which is a giveaway to the insurance companies, big pharma and hospitals. Bush and the GOP passed Medicare part D and had NO WAY of paying for it. This is what caused the "donut hole" for seniors. Medicare part D, increased seniors premiums and the govt gave their corporate bosses a $716 billion payout! That's what Obama is cutting out. Seniors benefits will NOT change. In fact they will increase under Obama's plan. Seniors NOW dont have to pay ANY co-pays and their medications are a whole lot cheaper. Now tell me...which would you rather have...Obama's plan which keeps medicare the same or Ryan's plan which will make Me and YOU pay out the wazoo when we get 67! WE will get a voucher/coupon that does NOT increase with inflation. Insurance is expensive for a young healthy person.....what do you think it is gonna cost US at 67 and may have developed preextisting conditions? WE get SCREWED under the Ryan plan. I dont want a freaking coupon when I've paid almost 25yrs into a system! I really wish the GOP supporters read BOTH budget plans and not just make a partisan decision this NOV. Too many people vote against their economic interests.......I say get rid of everything and put in place UNIVERSAL healthcare and then no one would have to worry about going bankrupt when they get sick. O yeah, Ryan cuts the SAME 716 billion but is not telling that! Go figure....I wonder why? Its time people start calling the GOP out for their LIES.

August 19 2012 at 1:31 PM Report abuse +2 rate up rate down Reply

The cbo did not say that the deficit would rise to 26 trillion dollars if Obama is reelected.

Also, why don't we just use the money Iraq is going to pay us for the debt. After all, the neocons told us the Iraq war would not cost us a dime.

August 17 2012 at 3:17 PM Report abuse +3 rate up rate down Reply

The corporate tax rate issue is a red herring. US companies already pay less than those of other developed countries once all the credits and deductions are included.

August 17 2012 at 3:13 PM Report abuse +2 rate up rate down Reply

Neither Ryan nor President Obama's budget will get us out of the deep debt we're in.

August 17 2012 at 8:05 AM Report abuse rate up rate down Reply
2 replies to wizeanne's comment

Im willing to try something different than what were dealing with now with Obama. All I hear is tax the rich and our problems will be solved. If they run the rich off, is the middle to lower class gonna give us the jobs that the rich do? Show me a socialist goverment that has ever worked and i might consider Obama's vision for our economy. Maybe we can be more like Europe. How is there"s working out for them? Not!!!

August 17 2012 at 8:33 AM Report abuse rate up rate down Reply
2 replies to berlaldie's comment

Luxembourg, second richest country in the world, is socialist. Norway, Australia, The Netherlands, Canada, among the 15 richest countries in the world, all Socialist. Europe is dying because of cheap Chinese labor, not because of your perceived notion that socialism is equivalent to death.

August 17 2012 at 11:17 PM Report abuse +1 rate up rate down

England has a socialist government like the rest of Europe and it has tried the "austerity measures" and it has been a disaster. They are now in a double digit recession. Germany's economy is doing quite well. France is in pretty good shape. Greece is an example unto itself. They knowingly deceived the European Union with figures - bolstered by Goldman Sachs and others taking bets, that stated their economy , just like bundled securities was "AAA rated". Don't let the big banks off the hook for starting the dominoes falling with their game of fiscal Russian roulette. Greece just happened to get the bullet. Iceland is a socialist country and instead of bailing out the bankers they let them fail and put them in jail. They began a stimulus program and within about 4 years their economy began to turn around and is growing by about 7% a year. As Dick Cheney famously said, "Deficits don't matter" - this is especially so in a time when jobs need to be created and cutting government jobs such as teachers, firefighters and police is exactly the wrong answer.

August 19 2012 at 11:42 AM Report abuse rate up rate down

Yeah wizeanne....we can thank the GOP for this......turning a surplus into a deficit! And they want to be called fiscally conservative! Yeah right and Bernie Maddoff is mother Theresa!

August 19 2012 at 1:34 PM Report abuse rate up rate down Reply