March 12 2013
A Tale of Two Budgets
If there were a medal for being serious about our nation’s fiscal woes in the midst of a fiscally frivolous Congress, Rep. Paul Ryan, architect of numerous GOP budgets, including one that will be presented today, would win it.
The GOP budget is to be presented today, while the Democrats, who have not produced a budget in four years, are scheduled to unveil one tomorrow. Will the Democrats produce a budget or talking points? That is this week’s big question, summed up by the Washington Examiner:
This week, Senate Democrats are set to unveil their first budget proposal in four years. The big question is whether they're going to get serious in addressing the nation's debt problem. The alternative is to keep seeking political advantage by attacking the Republican proposal by House Budget Committee Chairman Paul Ryan, R-Wis.
The early signs are not good, according to the Examiner:
Unfortunately, according to National Journal, the forthcoming budget from Senate Budget Committee Chairwoman Patty Murray, D-Wash., is "expected to offer only broad outlines of many of the [Democratic] party's usual talking points." According to the magazine, Murray's budget will raise taxes, call for more economic stimulus spending, largely ignore entitlements, and undo the automatic spending cuts of the sequestration. It will also rely on phony savings achieved by not keeping the war in Afghanistan going forever. (Murray could just as easily calculate the savings from not invading Rwanda next year and then use it to create a new Cabinet department.)
By contrast with what is expected from the Democrats, the GOP budget is serious, specific, and based on a blindingly simple concept: matching spending with income. It is designed to balance the budget by 2023 without raising taxes. The GOP budget would increase spending by 3.4 percent annually, as compared to the current 5 percent.
By way of introducing the GOP budget, Rep. Ryan writes in today’s Wall Street Journal:
America's national debt is over $16 trillion. Yet Washington can't figure out how to cut $85 billion—or just 2% of the federal budget—without resorting to arbitrary, across-the-board cuts. Clearly, the budget process is broken. In four of the past five years, the president has missed his budget deadline. Senate Democrats haven't passed a budget in over 1,400 days. By refusing to tackle the drivers of the nation's debt—or simply to write a budget—Washington lurches from crisis to crisis.
House Republicans have a plan to change course. On Tuesday, we're introducing a budget that balances in 10 years—without raising taxes. How do we do it? We stop spending money the government doesn't have. Historically, Americans have paid a little less than one-fifth of their income in taxes to the federal government each year. But the government has spent more.
So our budget matches spending with income. Under our proposal, the government spends no more than it collects in revenue—or 19.1% of gross domestic product each year. As a result, we'll spend $4.6 trillion less over the next decade.
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.
Ryan makes the point that was lost in the 2012 presidential campaign, when an unfortunate remark about the 47 percent that was supposedly dependent on government largess derailed any hope for a genuine debate about financial challenges: the wellbeing of our nation depends on financial reform. People who do rely on such government programs as Social Security and Medicare are heading for disaster unless changes are made. To make changes we need not more talking points but a serious budget.
There has been one shift in the terrain in Washington that might help Ryan and the GOP make their point: the Democrats’ sky-will-fall approach to the effects of the sequester cost them a little bit of credibility. The media is still solidly on the Democrats’ side, but the GOP has just a bit more of an opening right now.