Paul Ryan’s dangerous, and intentionally vague, budget plan
By Editorial Board,
THERE IS NO credible path to deficit reduction without a combination of spending cuts and revenue increases. This is the fundamental conclusion of every responsible group that has examined the issue, most prominently the Simpson-Bowles commission, and it is the fundamental failure of the budget blueprint released Tuesday by House Budget Committee Chairman Paul Ryan (R-Wis.).
Instead, and unfortunately, Mr. Ryan’s plan lunges in the opposite direction. He dangles the carrots of lower income and corporate tax rates. He says he would maintain tax revenue and in fact have it grow to 19 percent of the gross domestic product by 2025. Yet he fails to do the hard, and politically treacherous, work of specifying what deductions and credits he would eliminate in order to make all that happen.
Does Mr. Ryan propose to eliminate the mortgage interest deduction? The preferential tax treatment of employer-sponsored health insurance? The deduction for charitable donations?
Mr. Ryan says he’d leave those pesky details to the tax-writing House Ways and Means Committee, and no wonder: The nonpartisan Tax Policy Center said Mr. Ryan’s plan would reduce revenues by an eye-popping $4.6 trilllion — and that’s on top of the $5.4 trillion cost of making the Bush tax cuts permanent. Moreover, no matter what deductions are curtailed, the benefit of the lower rates would flow overwhelmingly to the wealthiest Americans, while Mr. Ryan would take a machete to programs that help the least fortunate.
For make no mistake: Mr. Ryan’s plan envisions, though again does not spell out, draconian spending cuts. We support some cuts, such as for agriculture subsidies. Mr. Ryan’s tweaked Medicare approach, giving seniors the choice of purchasing private plans or staying in traditional Medicare, deserves to be part of the debate about controlling health-care costs.
But Mr. Ryan proposes a budget path that would leave government unable to fulfill essential functions. As the Congressional Budget Office’s analysis finds, by 2050 his budget would reduce federal spending for everything besides Social Security, health programs and interest payments to less than 4 percent of the gross domestic product, down from 12.5 percent in 2011. Since, as the CBO notes, “spending for defense alone has not been lower than 3 percent of GDP” since World War II, and Mr. Ryan wants to increase defense spending, there would be essentially nothing left for the rest of government — nothing for education, for highways, for veterans, for low-income families, for the FBI.
Even in the short term, the Ryan cuts would be breathtaking. He would impose spending caps that would reduce domestic discretionary spending by $800 billion more over the next 10 years than the cuts agreed to as part of the debt-ceiling deal. Mr. Ryan argues that he would strengthen the safety net by transforming programs such as Medicaid and food stamps into block grants for the states. But the plan would cut Medicaid funding by one-fifth over the next decade, not to mention repealing the new health-care law’s expansion of Medicaid to those slightly above the poverty level.
Mr. Ryan is right about the risks posed by the nation’s mounting debt. But we think his lopsided approach is dangerously wrong for the country. The blank spaces in his plan suggest he knows that many Americans would think so too.