Ryan Plan Merits Serious Consideration

Amid much reciprocal back-slapping, congressional leaders and the Obama Administration recently came to terms on a budget for the rest of the current fiscal year, which lasts through September.  The deal will cut $38.5 billion in federal spending.

That may sound like a lot of money, and all parties involved in the budget negotiations are claiming victory because they avoided a “shutdown” of the federal government and managed to cut a “record” amount of spending.

Members of Congress can congratulate themselves all they want, but what these Democrats and Republicans have done is hardly a profile in greatness. These spending cuts are only a tiny fraction of the projected $1.6 trillion current-year budget deficit; and are hardly worth comparing to the real elephant in the room – our nations massive, $14.2 trillion national debt.

In January 2007, the new House Speaker, Nancy Pelosi, promised there would be “no new deficit spending.” Democrats had hammered the reckless spending of the George W. Bush-led Republicans throughout the 2006 mid-term election. And while the criticism of big-spending Republicans was an all-too-legitimate issue, Pelosi and her team then proceeded to spend an astonishing $5 trillion in the next four years.

During this four-year stretch, the only serious plan proposed to cure America’s addiction to deficit spending was authored by Paul Ryan, a young Wisconsin Republican with a keen mind for public policy and economics.  Of course, with the House under Democratic management, Ryan’s “Roadmap to America’s Future” went nowhere.

Well, he’s back; and this time he’s chairman of the House Budget Committee.  Ryan’s latest plan, the “Path to Prosperity,” is a comprehensive budget proposal that cuts spending by $6.2 trillion over the next decade and pays off the national debt in 40 years.

Ryan explains that the goal of his plan is to cut spending by bringing it down to historical levels (20 percent of gross domestic product).  He would continue to build on the bipartisan welfare reform agreements of the late 1990s; and would reform and simplify the tax code and the entitlements that pose a clear and present danger to our prosperity if not dealt with.

By far the most intriguing aspect of Ryan’s proposal deals with entitlements — specifically Medicare; a task clearly not for the faint of heart.

As currently structured, Medicare and Social Security are not sustainable. As Michael Tanner, a senior fellow at the Cato Institute wrote last year, “Social Security’s total unfunded liabilities top $15.8 trillion, and depending on what accounting measure is used, Medicare’s future shortfall could exceed $100 trillion.”

Ryan notes pointedly that his intent is not to dismantle Medicare, but to save it. As he explains, individuals near retirement would not be affected by these reforms, and new enrollees will have the same health coverage that members of Congress enjoy. Importantly, his plan would offer choice to those coming into the system; an idea that is anathema to many, including Democrats and liberal special interest groups.

Sadly, but not surprising, instead of presenting their own substantive proposal or plan, something more than President Barack Obama’s nonspecific speech last Wednesday, to counter Ryan’s work, the response from Democrats and liberal special interest groups is not just “no,” but “hell no.”  On the other side of the aisle, some conservatives complain Ryan’s plan does not cut spending enough, and that it takes too long to reign in the national debt. Such criticisms may be valid in theory, but are not rooted in the real world.

Congress is divided, and a Democrat occupies the White House. There are political considerations that must be considered, and there may be further compromises along the way, as even Ryan acknowledges.

“The Path to Prosperity” is not a perfect proposal, but it is a much-needed step in the right direction. To paraphrase Ronald Reagan, it just may represent the last, best hope for America, which otherwise faces a long and inevitable slide to economic mediocrity.

-by Bob Barr, The Barr Code

71 comments Add your comment

Civilian

April 18th, 2011
11:15 am

Debbiedoodoo you did it again! You poked your fat finger right in ol’ Bob’s eye. It is surprising that you have time from your Jerry Springer show to even post your insults. Once again you display your genius…another Einstein!

DebbieDoRight

April 18th, 2011
11:23 am

So for the liberals, it is ok for middle class and low income families (a lot of which are that way due to continuous poor decision making) to have loopholes, but not the rich. You make me sick!

Why those people in Appalachia (who account, US wide for 55% of ALL welfare btw) are poor because of their decision making (and not a systemic generational poverty. As of 2000, the per capita income in Martin County was $10,650, and 37% of its residents lived below the poverty line.) You are correct sir!!! Brilliant and correct!!! And might I add a humanitarian and a fine upstanding modern day Christian too….. :roll:

Barack

April 18th, 2011
12:15 pm

TGL – Barack

Please do us all a favor and go back under that rock you crawled out from. Off you go. Theres a good toady

Carlos…you are just upset that the storms on friday tipped over your trailer and you are going to have to wait for your govenrment hand out to fix ‘er back up. Your free money will be processed quickly so you don’t need to be so touchy.

Old Hippie

April 18th, 2011
12:46 pm

“This isn’t the first time Americans have had to deal with a tax code that lets the nation’s richest firms get away with shirking their tax responsibilities. In the middle of his presidency, then-president Ronald Reagan learned that a number of big corporations, including his former employer, General Electric, were completely escaping paying federal corporate income taxes. “I didn’t realize things had gotten that far out of line,” Reagan told his Treasury secretary, Donald T. Regan, according to his 1988 memoir.

So Reagan undertook a comprehensive tax reform effort that actually raised the corporate taxes and closed numerous loopholes that allowed big firms to dodge their tax responsibilities. As part of these reforms, Reagan passed the 1986 Tax Reform Act. This law “raised corporate taxes by $120 billion over five years and closed corporate tax loopholes worth about $300 billion over that same period.”

During the signing ceremony for the speech, Reagan explained that his goal in pursuing these reforms was to make sure “that everybody and every corporation pay their fair share”:

REAGAN: We’re going to make it economical to raise children again. Flatter rates will mean more reward for that extra effort, and vanishing loopholes and a minimum tax will mean that everybody and every corporation pay their fair share.”

One of the few things I ever agreed with Reagan on.

Larry

April 18th, 2011
1:11 pm

Old Hippie – Notice the end of Reagan’s statement. …everybody and every corporation pay their fair share.” The thought that everybody has to pay seems to be an unconventional thought nowadays. The calls for the repeal of the Bush tax cuts for example, are always to repeal those at the high end of the brecket when 2/3 of the revenue to be gained is in the lower brackets. One of the side effects of our government policies is that you cultivate a feeling of entitlement because a very high percentage of people/voters are disconected from the costs of government. If you don’t have a cause effect relationship between your demands and the cost of those demands, then you become detached from reality. The fact that people are even debating over the need for spending cuts shows how detached we have become. We cannot look to one segment of our society to pay for all of our wants and desires. I am not against increasing taxes as long as everyone contributes something to the common good. And lest people forget, when we had those high tax rates in the pre-Reagan years, everyone paid taxes and the government provided incentives to invest your money in the economy (tax shelters versus confiscation through taxation).

Just my Opine

April 18th, 2011
1:59 pm

Do you think the GOP could start even more unjustified wars and could they spend even more trillions so that our debt will get downgraded even further into a Greece level junk security?

Von Cracker

April 18th, 2011
2:06 pm

There’s that word again – “Serious”.

So Bob, should we be Serious about a budget where the numbers used were made up of whole cloth? Really, 2.8% unemployment in 10 years? Ha, Serious, yes!

The Heritage Foundation already admitted that the numbers used were BS and had to disavow, but here you are telling me, and everyone else who wasted 5 minutes, to take this Serious!

Are You Serious?!?

h/t – J.P. McEnroe.

Jefferson

April 18th, 2011
2:20 pm

Ryan’s idea is bad. Americans want what they pay their medicare taxes for. The doctors,administrators and health care workers are taking more than they should. Like the Hope deal, greed will kill the golden goose.

jconservative

April 18th, 2011
3:36 pm

Ryan’s plan will get serious consideration. So will Obama’s plan and the Gang of Six plan if they ever lay it on the table.

The Ryan plan passed the House. It goes to the Senate where it will not get the 60 required votes.

So then we negotiate.

Then we compromise. A budget for 2012 will pass. No one will be happy.

But mostly we will conduct the 2012 presidential campaign.

Politics!

Felix

April 18th, 2011
3:59 pm

Georgia has no high risk pools to begin with. If it were not for ObamaCare, those with pre-existing conditions would not be insurable today.

With regard to Ryan’s proposal for Medicate: Insurance companies use nearly any lame excuse to deny coverage to those over 50 years of age, currently. Given this knowledge, why would throw seniors into the open market? How is that much different than herding them to wolves, or ice floats? All along Republicans have been saying the best way to lower health insurance premimiums for the general population is to segregate out the old and those with pre-existing conditions. Can you imagine how astronomically high the health insurance would rise under these circumstances? If you can’t afford to pay the excess over the coupon/voucher amount, you are not going to be insured when Ryan’s plan kicks in. Here is the dirty secret, that is the Republican plan.

poison pen

April 18th, 2011
4:09 pm

DUH! Why not just try eliminating all the tax loopholes that the MORONS in CONGRESS passed for themselves and their friends.
This would give the gov’t all the money they need to repair all the damage they have done to the people in this country.

poison pen

April 18th, 2011
4:18 pm

JF McNamara

April 18th, 2011
9:48 am
The Ryan plan is unrealistic, but I do think it can be a starting point.

Republicans are known as the party of No. I’m not sure how calling the Democrats isn’t the pot calling the kettle black.

Being in my 30s, I’m expected to pay for a benefit others get knowing that I won’t get it. On top of that, I’ll have the pleasure of being gouged by insurance companies. What in the world would make me want to do that? Raise taxes now. Make people pay for their own benefits instead of constantly screwing over future generations (ie ME).

JF, guess what i’m in my late 60’s and I paid all my life for others and myself also, it’s just the way it works. I can assure you that many years ago there were a lot of younger people who felt the same way and now they are collecting SS Benefits. LOL

JP

April 18th, 2011
4:34 pm

The key part about the Medicare vouchers is, will they match the rate of health care inflation? If not there might be huge gaps in coverage. But I guess fundamentally, the voters will have to decide…..

JF McNamara

April 18th, 2011
4:46 pm

The Truth,

Here’s how you get screwed over at an assumed Fair Tax of 25%.

Rich Person with $1M in income – currenly pay 35% or $350K. In order to pay the same amount under the fair tax, they would need to spend $1.4M. That’s impossible since they won’t receive that in income.

Lets say they are an aggressive spender and spend $200K a year on taxable items. That’s a LOT of groceries. They pay $50K in taxes.

Moreover, lets say they decide to buy a car. It cost $80K. That’s an additional $20K. They are still nowhere near their old tax level as they now total $70K.

Who makes up the $300K that the U.S. government no longer receives from this rich person? You do. That’s why its only “fair” to wealthy people.

Since I answered your question, answer mine. How am I wrong? Give me an example with math just like I did for you.

Jefferson

April 18th, 2011
5:08 pm

Fair tax is a over simplistic attemp to starve gov’t of its revenue under the guise of “fairness”. The politicians see through it.

Fred

April 18th, 2011
6:02 pm

You invest in the next generation because they are the ones who will taking care of us in the future, down to removing your bed pan, and wiping your drool, with love and respect, if you and your fellowmen have lived their lives well.

Push for jungle rule, and “personal responsibility”, and see how you feel on a cold hospital bed, waiting out in the halls for someone who gives a darn about their crummy job to take you back to your room (for less than min. wage, because this social protection is next to fall, if the Republicans have their way).

Jungle rule makes for an ugly society, and that is the ditch they are driving us into.

Patrick Doherty

April 19th, 2011
12:45 am

Engaging and well written article! This tops anything I have read lately on the subject at hand. I wonder if this’ll be posted on Twenty-First Tycoon. Although the site has awesome political, business, technology and real estate news, they could use more stuff like this. http://www.21Tycoon.com

the watch dog

April 19th, 2011
7:27 am

The U.S. has a system of taxation by confession. That a people so numerous, scattered and individualistic, annually assesses itself a tax liability, often in highly burdensome amounts, is a reassuring sign of the stability and vitality of our system of self-government.
That was 65 years ago, today 69 million households pay no federal tax at all and many get money from the government, all the while the U.S. is swimming in debt. It does not make sense, and now the Government wants to divest itself of General Motors stock, which they bought on high, apparently to save the company from bankruptcy, which is exactly what GM should have done, gone belly up. It makes sense only, to the recipients of the money, no one else.

Just my Opine

April 19th, 2011
10:11 am

“These spending cuts are only a tiny fraction of the projected $1.6 trillion current-year budget deficit; and are hardly worth comparing to the real elephant in the room – our nations massive, $14.2 trillion national debt. ”

Hardly news. Who doesn’t understand this. This is the implied motivation that Barr thinks is the theme. Wrong. A writer should Use the unspoken zeitgeist to drive a theme for a piece. We know spending cuts is a meaningless phrase, and that any reductions are a drop of rain in the ocean. We have known that since high school. We also know that the new last refuge of a scoundrel is “Spending Cuts”. Does the honorable Bob Barr think that we are morons? Read his language. You decide. (Unless you’re too stupid to decypher his word patterns, that is, unless you’re a moron.)

bwa

“To paraphrase Ronald Reagan, it just may represent the last, best hope for America, which otherwise faces a long and inevitable slide to economic mediocrity.” The giant leap for mankind’s economy was when the electorate rid themselves of any vestige of conservatism in the white house.

songbird

April 19th, 2011
7:01 pm

Several of you keep mentioning that many individuals pay no federal income taxes, well neither do many very large corporations. Corporations with billions in net income paying no taxes. A lot of those individuals paying no income taxes are working poor who barely earn enough to make ends meet. They pay state taxes, sales taxes, etc. The taxes they do pay probably add up to a higher percentage of their income that the percentage that the richest people in this country pay.

I agree everyone should pay something, but in fact, most are paying taxes in some form.

WOW

April 19th, 2011
7:54 pm

So this is what Wooten’s blog is like.