Our opponents will shout austerity, but let’s put this in perspective. On the current path, we’ll spend $46 trillion over the next 10 years. Under our proposal, we’ll spend $41 trillion. On the current path, spending will increase by 5% each year. Under our proposal, it will increase by 3.4%. Because the U.S. economy will grow faster than spending, the budget will balance by 2023, and debt held by the public will drop to just over half the size of the economy.
The average person would not even consider this to be “cutting,” for in fact the budget grows each year. It does undertake Medicare reform for 10 years. There is merely a requirement to submit a plan for Social Security. If anything, the budget approach is modest.
In sum, Ryan’s approach to entitlements is the same as last year’s budget. Seniors still have 10 years to plan for a change in the system, and their options would include a traditional Medicare fee-for-service. (It is beyond me why this couldn’t start in five or six years because seniors still have the option to remain in the current plan, but Mediscare still is a deterrent to the most sober policy making.)
On defense, after this year the sequester is removed while the pre-sequester $487 billion in cuts is preserved. As a Ryan adviser explained, “We do not leave in place cuts that the Joint Chiefs and Secretary Panetta called devastating. We provide what the Joint Chiefs have testified is necessary to execute the commander-in-chief’s defense strategy.”
The budget repeals Obamacare but does not offer a specific replacement. Instead Ryan envisions solutions that “include enacting medical-liability reform, ensuring Americans can purchase quality coverage across state lines, and expanding access to consumer-directed healthcare options. Addressing distortions in the tax code could begin by giving employers the opportunity to offer their employees a free-choice option, so that workers could be free to devote their employer’s health-coverage contribution to the purchase a health-insurance plan that works best for them.” It would behoove Republicans, I think, to begin proposing one or more specific items.
The budget is not a tax bill but nevertheless envisions tax reform with two individual rates, 25 percent and 10 percent. Ryan vows that the House Ways and Means Committee will roll out a specific bill this year.
In sum, Ryan’s budget is neither extreme nor surprising. He restores some defense spending, champions Medicare reform and restrains the growth of domestic discretionary spending.
Getting to a balanced budget is not rocket science. It is only baffling to liberals and shocking to the media (I repeat myself) who cannot conceive of a budget growing at a slower clip and avoiding defense cuts the president’s former secretary of defense deemed devastating (is the current one going to stick with those devastating cuts or put back in appropriate levels of defense spending?).
The president meanwhile is shirking his obligations. The Associated Press reports, “The modern executive budget process, requiring an annual White House budget submission to Congress, was established under the Budget and Accounting Act of 1921. The law also created the agency that would eventually become the White House Office of Management and Budget. And, every year since then, according to the Library of Congress and The New York Times, the president’s submission has represented the start of the budget process–until now. . . . But letting Congress start the budget process has never happened in modern times.” Well, we have never had a president who prefers to hide his priorities in favor of demagoguing the opposition, even after his re-election.
What will be interesting is to see what the Senate Democrats come up with. How high will taxes go? Will they really refuse to reform Medicare? To govern is to choose and the Democrats must choose and come out of hiding. Then the two houses of Congress can engage. It’s almost like the budget law requires. How novel.