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