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ThePlumLIneGS whorunsgov plumline
Posted at 12:48 PM ET, 03/20/2012

Paul Ryan’s budget is not serious

Paul Ryan’s budget for fiscal year 2013 has now been released. It isn’t that different, in basic concept, from last year’s version. It’s a public relations document, not a real, detailed budget. Not that there’s anything wrong with that; it’s a perfectly legitimate strategy in an election-year with divided-government.

But there’s nothing “serious” about this document.

A few quick points:

* Ryan proposes major tax reform, with lower corporate and personal rates balanced out by repealing various tax deductions. The problem? Just like last year, he doesn’t tell anyone which deductions he’s going to eliminate. That’s not a budget proposal. That’s an aspiration. It’s very, very, easy to say you want tax reform. It’s very, very, difficult to do.

His budget would cut tax rates on all federal income taxpayers, especially the wealthy, and the danger is that he would pass the rate reductions without offsetting them by repealing deductions. All this means is a huge tax cut (mostly for the rich) and enormous deficits.

* Ryan is selling the fact that he’s reduced the number of tax brackets as “simplification.” But, as Matt Yglesias says, one has nothing to do with the other. Simplification comes from removing deductions, credits, and loopholes, which amounts to taking money away from people. That’s why it’s hard!

* The cuts in Medicare, Medicaid, and other health care programs — including repealing health care reform — are the bulk of the “savings” in Ryan’s budget. Without some sort of mechanism to control medical costs, all these cuts do is shift the burden from the government to individuals.

* The real tell in Ryan’s budget is that in the long run, he projects that all discretionary spending (and automatic spending outside of Medicare, Medicaid, and Social Security) be reduced to 3.75 percent of GDP by 2050. Why does that matter? Because that category includes military spending, which as CBO reminds us has never dropped below 3 percent* of GDP since World War II. Since Ryan doesn’t want to cut the military, that would leave less than one percent of GDP — to fund the entire rest of the government.

In other words, Ryan’s long term proposal would basically shut down the federal government except for Social Security, Medicare and Medicaid, and the military. Republicans don’t really want to shut down the FDA, the FBI, and the national parks, not to mention patrolling the border and farm programs and roads. And yet that’s the implication of this document. It’s not even remotely realistic — and neither is Ryan’s claim that his budget would cut the deficit way down.

The bottom line is that this is less of a budget or a blueprint than it is a partisan document designed to score partisan talking points in an election year. Of course, what Ryan believes are good talking points for Republicans — slashing spending, claims of lower deficits — may also provide Democrats with plenty of ammunition against House Republicans and Mitt Romney. But in budgetary terms, there’s no reason to take this thing seriously, or to give Ryan any points for courage.

* Missing number added.

By  |  12:48 PM ET, 03/20/2012

 
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