Three criticisms of the House Republican budget being bandied about are ill-founded, if not downright wrong. I’ll do away with complaints on the grounds that the budget is not politically realistic — for the bargaining has not begun and budgets are commonly seen as a statement of principles. I am sure the Senate Democrats and president will be no more “realistic.” (Will they omit tax hikes they know are a non-starter with the House?)
Let’s move on to the budget for defense. The usually reliable Wall Street Journal pronounces, “Rep. Paul Ryan proposed a Republican budget blueprint Tuesday that included caps on defense spending, a shift for his party that could provide a point of compromise with Democrats.” This is wrong on three counts.
First, there is no more a cap on defense than on any other area of spending; there are budget numbers like every budget item. There is no “cap” either as a percentage of the budget or of gross domestic product.
Second, comparing the defense budget to a proposed budget by a failed presidential candidate (the point of comparison for the report) doesn’t suggest a shift in the GOP; it suggests, for better or worse, that Mitt Romney was an outlier. In fact, Republicans for some time now have said they would accept the pre-sequester $487 billion in cuts but not the sequester cuts deemed “devastating” by President Obama’s former defense secretary. A budget staffer said simply: “We do not propose defense funding at post-sequester levels. The Joint Chiefs and former defense secretary Leon Panetta said those levels would be ‘devastating’ to our national defense. Our budget provides what the Joint Chiefs have testified is necessary to execute President Obama’s defense strategy.”
Finally, Ryan’s budget is a rebuke of sorts to both the Obama sequester roulette and those in his own party (e.g. the Gang of Six, Sen. Rand Paul) who favor much deeper cuts. In crafting this budget Ryan takes away the argument that defense has been spared, while fending off the worst of the cuts. If anything, this is a pro-defense budget.
The next area of criticism concerns the tax provision. Liberals simultaneously complain Ryan is going to raise taxes on the middle class and object that it is too vague to tell what is in it. The critics of vagueness are on shaky ground. Budgets have never spelled out tax legislation in detail. Ryan can be credited for including more detail (a goal of a top bracket of 25 percent, a territorial corporate income tax) than most budgets. Of course, Senate Democrats’ idea of tax reform is another trillion in taxes (for those who crabbed about an $85 billion sequester cut imperiling the economy it’s an odd suggestion); the president has done nothing at all on taxes except raise them in January on the top earners. That is because he has no budget at all and is waiting for others to lead.
Perhaps, it is dawning on liberals that “it now seems likely that $600 billion in tax increases is all the new revenue Obama gets. That’s a far cry from the $1.6 trillion he wants, or even the $1 trillion-plus many Republicans were discussing in previous grand bargain talks.”
Finally, both liberals and some Republicans are apoplectic about Medicaid funding. A health-care adviser for a senior Republican senator e-mailed me to grouse that the Medicaid numbers are “embarrassingly outlandish.” Everyone should take a breath.
First, it comes as no surprise that Republicans oppose the enormous expansion of Medicaid that accompanies Obamacare (the boss of the irate staffer who e-mailed me favors repealing Obamacare, by the way). The Ryan budget does not include about $625 billion in Medicaid expansion that goes hand in hand with Obamacare. This is not taking anything away from anyone, but declining to expand a waste- and fraud-ridden program.
Second, the Republicans have favored for a number of years bloc-granting Medicaid, something a large number of governors have been pleading for on the grounds they can deliver better and more extensive care for less. In the House Republican budget, more than $3 trillion will be spent on Medicaid over the next decade, with freedom for governors to spend their Medicaid money in a smarter, less centrally dictated way. Do liberals imagine Gov. Andrew Cuomo or Gov. Jerry Brown is going to kick poor people out of clinics and deny care to the existing pool of Medicaid beneficiaries? Perhaps they have no faith in big-state Democratic governors who are the largest providers of Medicaid. Nevertheless, there are other good ideas for Medicaid reform, such as those suggested by Sen. Orrin Hatch (R-Utah). I would like to see those introduced and debated.
Nevertheless, I have two concerns about the House Republican budget process.
First, it was a mistake for House Republicans to demand the same 10-year exemption for implementation of Medicare reforms; the earlier those reforms are implemented, the less needs to be cut from discretionary spending or the more available for middle-class tax relief. Likewise, isn’t it time to lay out a Social Security plan?
Second, the House Ways and Means Committee has delayed in coming up with a tax reform plan; there is no reason this could not be done a year or even two ago. They should get cracking on that so as to fill in the blanks on the revenue side.
That said, as the only budget out there that balances, reforms entitlements and fixes devastating defense cuts that the president said during the campaign he’d do away with, it’s a responsible and serious beginning.