Entitlement reform is also a major focus of the Republican budget proposal. Ryan believes the same kinds of welfare reforms that succeeded in the late 1990s can be seen again, especially in the ever-expanding food stamp program.
"We see food stamp reform as part of welfare reform. We want to send it back to the states, and give them more flexibility," Ryan said.
Ryan also talked about his plans for broad based tax reform, repeating the Kudlow mantra that lowering the rates and broadening the base is the best way to grow the economy and increase revenues.
(Read More: 11 Historic Fights Worse Than the Sequester)
Ryan admitted that he doesn't expect to get all he wants in any negotiations with the White House. He conceded that he probably won't be able to get the full $5 trillion in cuts he seeks, but he would accept a "down payment on that."
Finally, Ryan expressed cautious optimism about the chances of ever making a deal with the Obama team and he was positive, but realistic, about the administration's new outreach efforts to Republicans.
"Trust but verify," said Ryan about the way he sees the so-called charm offensive coming from the president in recent days.
(Read More: Paul Ryan: US Budget Compromise With Obama Possible)
—By CNBC's Jake Novak
Watch Larry Kudlow's interview with Paul Ryan Tuesday night at 7 p.m. ET on "The Kudlow Report."