Republican House Budget Chairman Paul Ryan released his new budget framework Tuesday, in which he seeks to reduce the federal deficit and balance the budget in 10 years. The former vice presidential candidate's updated "Path to Prosperity" says this can be achieved if "we stop spending money the government doesn't have," and spending is matched to the federal government's income. Democrats are expected to release their budgetary offering this week as well, for the first time since 2009. The blogosphere reacted to Ryan's highly polarizing document, with both conservatives and liberals offering criticism:
First off, Ezra Kelin of Washington Post's Wonkblog quickly sums up the important points of the Ryan budget:
Here is Paul Ryan's path to a balanced budget in three sentences: He cuts deep into spending on health care for the poor and some combination of education, infrastructure, research, public-safety, and low-income programs. The Affordable Care Act's Medicare cuts remain, but the military is spared, as is Social Security. There's a vague individual tax reform plan that leaves only two tax brackets — 10 percent and 25 percent — and will require either huge, deficit-busting tax cuts or increasing taxes on poor and middle-class households, as well as a vague corporate tax reform plan that lowers the rate from 35 percent to 25 percent.
Ryan's budget is, at its core, a set of very distinct, very ideological, and, over the course of Ryan's career, very consistent ideas about how to reform the relationship between the federal government and its citizens. Ryan was pushing these ideas in the late-'90s and early-2000s, too, when deficits were far less of a threat.
The problem is that these ideas are not, on their own, popular. In fact, they're deeply unpopular, and considered quite radical. That's why Newt Gingrich rejected Ryan's initial budget as "right-wing social engineering"—it is, in a very serious sense, an effort to use policy reform re-engineer the relationship individuals have with their governments, their communities, and their families. But presented on their own, Ryan's plans scare people.
James Pehokoukis of the American Enterprise Institute calls Ryan's budget "far from ideal" for several reasons, like the unlikelihood of the Affordable Care Act's repeal. Also:
The plan lowers the top tax rate to 25%, which, like an Obamacare repeal, ain't going to happen. The reduction—the path to which remains unspecified—also will require fiscal gymnastics so as to a) not lose revenue and b) not raise taxes on the middle-class. Tax reform is an opportunity for the GOP to show it is the party of parents and kids, not just the party of heroic entrepreneurs and CEOs. Better to have a higher individual rate and dramatically reduce the current tax code's bias against investment capital and human capital."
He also wonders why a balanced budget plays such a key role:
Why does the budget need to balance in ten years? Debt reduction doesn't require balance, just that the economy is growing faster than the debt. While the plan does put the debt/GDP ratio on a downward trajectory—rather than merely stabilized as Obama and the Senate Democrats would do—it probably doesn't need to be quite as steep.
Matthew Yglesias of Slate's Money Box calls Ryan's ideas for reducing federal spending "class warfare:"
In his Wall Street Journal op-ed laying out the case for the House Republican budget, Paul Ryan contends that "the most important question isn't how we balance the budget." When a politician tells you something he's doing isn't so important, that's probably a good place to look at where the ball's been hidden.
And judging by the budget he just released, the "how" here is pretty darn important. The budget will be balanced, if Ryan gets his way, through a campaign of thoroughgoing class warfare aimed at Americans in the bottom half of the income distribution in order to protect the interests of a small, high-income minority.
As others have noted, Allahpundit of Hot Air acknowledged the GOP budget is somewhat of a pipe dream. But he says this is because Democrats will actually be releasing a budget of their own this time:
How come this year's budget is less realistic than it was the past two years? Simple: Because it can afford to be. Ryan had the stage largely to himself with the first two versions of Path to Prosperity; Democrats were too terrified of trying to reconcile their opposition to entitlement reform with, er, math to produce their own budget. Under normal circumstances his plan would be a partisan "opening bid" in budget negotiations, as Klein puts it, but under the unique circumstances of Democratic abdication, knowing that his plan would receive unusually close attention, he could be a bit more realistic about what sustainability would require long-term. Now, with Patty Murray and Senate Dems finally goaded into dropping another trillion-dollar tax bomb on the public, he can counter with the full GOP wish list — balanced books in 10 years, ObamaCare out the window, top rate that's nearly 15 percent lower than it is now.
After losing on the fiscal cliff and kicking the debt-ceiling can down the road, here's where they get to flex some muscle and show what real fiscal discipline would look like. Besides, after being demagogued over his budget for two years plus a presidential campaign, Ryan must be feeling as though the Democrats have already emptied their arsenal against him.
Igor Volsky, Travis Waldron, and Tara Culp-Ressler from Think Progress note the budget would endanger key social safety net programs like food stamps, Medicare, and Medicaid. These programs would be modified while cutting the taxes of the rich and corporations:
Ryan's plan would reduce both top income and corporate tax rates to 25 percent, resulting in trillions of dollars in tax cuts for the wealthy and corporations. The government would lose roughly $7 trillion in revenues compared to Ryan's projections, and while he plans to close loopholes to pay for the cuts, he has in the past failed to specify which loopholes he would close, and raising enough revenue from the elimination of tax expenditures would prove politically difficult, if not impossible. Ryan would also convert the corporate tax code to an "international" plan, resulting in an even bigger giveaway to American companies that are already paying historically low tax rates.
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