Though Congress and the president have still not finalized this year's federal spending plan,they are nonetheless moving ahead with next year's.
House Republicans, under the leadership of Budget Committee Chairman Paul Ryan, R-Wisc., have produced a document that balances the federal ledger in 10 years. Senate Democrats, led by Sen. Patty Murray, D-Wash., are lagging behind, but they have an excuse. They are out of practice, having failed to produce and pass a budget for more than 1,400 days. They are also apparently stuck, unable to find the $1 trillion in new taxes they want to fuel yet another increase in spending. President Barack Obama, meanwhile, is on the sidelines. The White House missed the statutory deadline for delivering its budget document to Congress and is, technically anyway, in violation of the law. Guess what is getting all the attention?
In a rational world, the Senate Democrats having passed no budget for almost five years and White House being late with its own would be at least as interesting as what Chairman Ryan has proposed. Unfortunately Washington is not a rational place, so the Ryan document has commanded the most attention.
It is a cheerful document. In addition to getting the budget in balance in 10 years it repeals the funding for Obamacare while pushing for much-needed reforms in other aspects of the federal government. The Ryan budget goes a long way toward accomplishing what the Heritage Foundation defines as the six essential goals of budget policy: Get to balance in a decade without raising taxes; defund Obamacare in its entirety; overhaul entitlement programs like Social Security in a way that keeps the promise made to America's seniors while forestalling its impending bankruptcy; fully fund national defense; roll back discretionary spending; and lay the groundwork for fundamental tax reform with federal revenues at the post-war historical average of 18.5 percent of U.S. GDP.
That is not to say the Ryan budget accomplishes all these things—but it comes closer than what either the Democrats or President Obama have proposed thus far because they have proposed nothing. We do know, thanks to White House spokesman Jay Carney, that whatever Obama proposes it will not balance—ever.
Conservatives do have some complaints with the Ryan budget—most notably that it repeals Obamacare while leaving the taxes to fund it in place. Ryan addressed this Wednesday when he said, "You have to use the baseline you get from [the Congressional Budget Office]. Does the baseline raise the revenues because of current law? Yes. And what we say is, 'Get rid of this ugly tax code with all the Obamacare tax increases—medical devices and such, with the top tax rate going up as high as 44.8 percent on successful small business. And replace all of that—the Obamacare taxes, the fiscal cliff taxes—with a better tax system.' That's exactly the job of Ways and Means."
That Ryan had punted the issue to Ways and Means might be discouraging had not Rep. Dave Camp, R-Mich., who chairs that committee, not committed frequently and publicly to hold hearings on, pass and send fundamental, progrowth tax reform to the House floor for a vote this year.
Working together, Ryan and Camp can lead the contemporary GOP back to its supply side roots, adopting the Reagan-Kemp mantra that the real cure for America's economic ills lies in liberating the productivity of the American people by getting the economy growing again. The replacement of the corporate cronyism of the Obama years—where the federal government picks winners and losers and a few politically well-connected insiders get rich at the expense of everyone else—with a tax code that allows a rising tide to lift all the boats in the water is what the country really needs to get back on its feet. A balanced budget will help but it is not the end all or be all. Under Reagan the budget was notoriously out of balance but the American economy enjoyed a period of economic growth that produced a long boom that carried through into the Clinton years. What is needed now, most of all, is a plan to create once again what the late Robert Bartley of the Wall Street Journal called "Seven Fat Years." Hopefully Ryan and Camp can accomplish this. The Democrats clearly have no interest.
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