President Obama’s speech yesterday was roundly attacked, no surprise there, by conservatives. The notion that Obama’s budget is close to Ryan’s (then, according to the left, Obama is practicing “Social Darwinism” and his budget is phony too? ) or that his numbers are unassailable, as leftwing blogger Ezra Klein asserts, is remarkably inaccurate.
Ryan and others have put forth analysis that shows just how different are the two budget approaches and how misleading the president’s numbers are. James Capretta, for example, explains:
[T]he real source of today’s deficits and debt, and the source of our national insolvency if it is not addressed soon, is runaway entitlement spending. Taxes have gone up and down over the past four decades, but have always hovered around 18 percent of GDP. Meanwhile, back in 1972, spending on the three largest entitlement programs — Social Security, Medicare, and Medicaid — was just 4.4 percent of GDP. Today, spending on those three programs is just over 10 percent of GDP. . . .Worse, spending on the “big three” is headed toward 16 percent of GDP in 2035, according to the Congressional Budget Office (CBO). If that were allowed to happen, there would be virtually no room left in the budget for anything else, assuming the historical rate of federal revenue collection.
And what does the president propose to do about this problem? Exactly nothing.
His plan for deficit reduction can be summed up briefly: tax hikes and defense cuts.
According to CBO, the federal budget deficit under the president’s plan in 2022 would be about 3 percent of GDP, down from about 8.1 percent in 2012. What is the source of that deficit reduction? First, the president’s plan would bump federal revenue up from its historical average of 18 percent of GDP to 19.8 percent in 2022. Further, according to the president’s own numbers, spending on security-related items in the budget would plummet from about 5.6 percent of GDP today to about 3.4 percent of GDP in 2022. So, between tax hikes and defense cuts, that’s 4 percent of GDP in supposed deficit reduction. The rest would come from projected improvement in the economy.
What is the president’s post-election plan? Maybe the “grand bargain” or maybe Bowles-Simpson or maybe more kicking the entitlement can down the road. If he is as devoted to fixing our fiscal future as he ays, is he going to come up with anything other than his 2012 budget, which was rejected 414-0 in the House?
One need only look at a side-by-side comparison of the two budgets to see how significant are the differences between Obama and Romney-Ryan. Obama want to spend much more, tax much more and tolerate much higher deficits than Romney-Ryan.
Obama, as Capretta points out, was disingenuous about tax reform as well. On Ryan’s tax plan Capretta explains:
It’s not a giveaway to the rich. It’s not even really a tax cut at all. It’s a plan to reform federal income and corporate taxes to broaden the bases, lower the top rates, and promote growth while providing a responsible level of revenue for the federal government.
On taxes, the Ryan budget is very much in line with other bipartisan plans developed over the past couple of years to reduce deficits. For instance, the Bowles-Simpson plan and the plan developed by the Bipartisan Policy Center both included tax-reform proposals to lower the top individual income-tax rate below today’s current 35 percent bracket. The outlier in this regard is President Obama, not Chairman Ryan. The president’s plan is the only major proposal on the table today that would go in the other direction and push the top individual income-tax rate up — to around 40 percent — rather than down.
And, of course, on Medicare the contrast is great: Obama — after slashing $500 million from Medicare — set up the Independent Payment Advisory Board, empowering 15 individuals to limit coverage and care; the Ryan-Romney approach (while employing the same backstop cap on healthcare spending as the president) “would move toward a premium-support model that independent estimates show could reduce Medicare spending by 5 percent right away by making the program more efficient.”
It is hard (not to mention weird) for liberals to argue that Obama and Ryan are “close” on policy and that Republicans are itching to get back to the law of the jungle. (Note that under Ryan the government continues to spend more each year; only the rate of growth is slowed.) It is almost as if the left doesn’t want to answer the straightforward question: Do Americans want more government, higher taxes and a more closely restricted private sector or do we want less government, lower taxes and a more robust private sector? Maybe the president and his fans are afraid of the answer. They should be.