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Right Turn
Posted at 08:30 AM ET, 03/20/2012

Ryan’s next chapter: The 2013 budget

As he did yesterday in a lunchtime briefing for a number of conservative journalists, House Budget Chairman Paul Ryan (R-Wis.) will have to explain as he rolls out his 2013 budget beginning today what is in it, what’s different from last year and why he is doing it.

As to the last point, the president and Congress did agree on the Budget Control Act last year that set overall spending caps.The Senate Democrats in particular are now whining that the House is reneging on the deal. Ryan will need to be clear: The Congress has a legal obligation to pass a budget, and, moreover, it is ludicrous to operate the federal government on one continuing resolution after another with little guidance or concern about anything below the top line numbers. Surely Congress can try to do better than the bare legal minimum, can’t it? Moreover, I haven’t heard Ryan (and I don’t think that we will) say that they will shut down the government or refuse to continue with the BCA in the event (a likely one) that Senate Democrats won’t even pass a 2013 budget. The document is aspirational; Senate Democrats are simply embarrassed they don’t have a plan of their own.

So why, other than their legal duty, are House Republicans bothering with a budget? The answer is two-fold. First, it is critical for politicians to be upfront with the public about our fiscal condition and their proposals for dealing with it. The president has never put on paper a coherent entitlement reform plan. The Senate Democratic majority has never come up with a tax reform plan, for example. It is vital that voters understand they have a choice on the direction of the country and that they fully understand the magnitude of the changes needed to be made.

Second, as a political matter, it is, of course, beneficial to say to the public: “They won’t lead; we will.” It not only conveys to voters that Republicans are serious, but it also tees up the election face-off between the Obama vision (massive tax hikes, big defense cuts, continued domestic gluttonous spending) with the one offered by Ryan (and which to a large degree mirrors what Mitt Romney has presented).

In a Wall Street Journal preview, Ryan explains some features of the plan. These include tax reform:

Our budget also spurs economic growth with bold tax reform—eliminating complexity for individuals and families and boosting competitiveness for American job creators. Led by House Ways and Means Committee Chairman Dave Camp, our budget consolidates the current six individual income tax brackets into just two brackets of 10% and 25%.
We propose to reduce the corporate tax rate of 35%, which will soon be the highest rate in the developed world, to a much more competitive 25%. Our budget also shifts to a “territorial” tax system to end the practice of hitting businesses with extra taxes when they invest profits earned abroad in jobs and factories here at home.
We reject calls to raise taxes, but revenue nevertheless remains steady under our budget because we close special-interest loopholes. More important, our reforms will grow the economy—and the faster the economy grows, the more revenue the government will have to meet its priorities and start paying down the debt.

I am told that all of the GOP members of the Way and Means Committee have signed off on this general outline.

There will be much more to discuss once the budget is released at 10 a.m. today. But in general terms, look for Ryan’s 2012 Medicare reform plan to be replaced by the Wyden-Ryan Medicare plan; a substitute list of cuts so that the sequestration of defense funds need not go forward (and thereby avoid imperiling national security as our defense secretary warned); additional cuts for fiscal year 2013 beyond the BCA; and a reprioritization of spending so that defense (the only area of the budget that has already repeatedly been cut) does not continue to be the piggy bank for continued domestic spending.

Ryan would be the first to concede that after introducing and passing the 2012 budget the House Republicans got lost in the weeds, were unprepared to go on offense on Medicare reform and got sidetracked by the shutdown and debt ceiling fights (that, by the way, concerned billions compared to the trillions in potential budget savings). The 2013 budget, Ryan hopes, will reset the battle lines and make clear to the voters what the choices and the stakes are for the 2012 election.

By  |  08:30 AM ET, 03/20/2012

Categories:  2012 campaign, Budget

 
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