This is the Cato Dilly Podcast for Tuesday, April 5, 2011.

I'm Caleb Brown.

House Budget Chairman Paul Ryan is out with his budget plan.

It's a dramatic departure from the Obama plan.

For one, the Ryan plan would balance the federal budget by 2015.

But Ryan treads lightly on the sacred cow of establishment Republicans

military spending.

Chris Edwards, Director of Tax Policy Studies at the Cato Institute, comments.

So in this budget proposal, Chairman Ryan, a Republican from Wisconsin, proposed a specific amount of so-called discretionary

spending for fiscal 2012, and he's taking on the big entitlement programs by proposing very detailed reforms of Medicare and Medicaid.

In addition, Chairman Ryan has proposed substantial tax rate reductions and tax reforms.

So all in all, I think Ryan's package really sets up the Washington budget debate for the next year or two.

Indeed, he's probably also setting up the next Republican nominee for the White House with a good set of ideas for fiscal reform.

What does he want to do with Medicaid?

With Medicaid, that's the federal and state health care program for low-income Americans, he would turn it into a so-called

block grant. Right now the problem with Medicaid is that state governments have an incentive

to continuously expand the program because the more they

expand the program the more money they get from Washington. Paul Ryan says no let's

turn this into a block grant he would give the states a fixed amount of money, period.

Then they would be allowed to reform their state health systems as they want with this

fixed block of federal money.

So this promise is not only to save taxpayers money but also to help

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