Ryan’s new budget plan points the way to saner fiscal future

In February — three years after Barack Obama became president, and 32 months after the Great Recession officially ended — the United States recorded its largest monthly deficit ever: $232 billion. So, last month we borrowed the equivalent of Portugal.

The relatively good news is that February usually features low revenues and high spending. The country is not actually on pace for a $2.8 trillion shortfall this year. Whew!

The decidedly bad news: Washington still is well on its way toward a fourth straight year of spending $1 trillion more than it takes in.

That word, “trillion,” has lost some of its shock value during the past three years. But if you have children, grandchildren or just expectations of living more than another 10 years or so, you must know runaway red ink is the most important issue we face today. And, with apologies to each Republican telling the country that putting him in the White House is the key to America’s future, any steps toward solving this problem must begin in Congress.

Which brings us to the best news so far. In between the Romney campaign’s giving an unexpected boost to Etch-a-Sketch and the Broncos’ trading Tim Tebow to the New York Jets this past week, the most consequential member of Congress tweaked his plan for backing away from the fiscal abyss.

Paul Ryan, the House budget chief from Wisconsin, laid out his revised Path to Prosperity. The plan may or may not be politically practical, but it is vitally important in illustrating the kind of choices necessary to balance the federal budget.

He does this by recognizing two realities Obama still denies, if we are to judge by the president’s plans.

First: Tax revenues during the past 60 years, regardless of tax rates or loopholes, have averaged 18 percent of gross domestic product. So, if we are serious about balancing the budget, we cannot keep spending above 22 percent of GDP, as Obama proposes to do indefinitely. We have to get it to 18 percent or less.

Ryan’s plan does this, in part by holding down spending on Medicare and Medicaid. The program for retirees would be reined in by helping seniors pay for competing, private insurance plans rather than having the government insure them itself. Medicaid would be effectively handed over to the states, which would get less money from Washington but also much more freedom to shape their health plans for the poor.

But he also does it by cutting spending for defense, for education — for everything besides health care and Social Security — almost in half within 10 years. Would that be a shock to the federal system? Certainly. But, just as certainly, it represents the scale of change required to bring Washington’s spending under control.

The second fact is that we will escape our budget hole only by growing the economy. Among other things, that prevents absolute levels of spending from plummeting even as they shrink as a share of the economy, making cuts more politically palatable.

He proposes to do this with a complete overhaul of the tax code. Among other things, the current six income-tax brackets would collapse to just two: 10 percent and 25 percent. The falling rates would be offset by removing the litany of loopholes and carve-outs that favor the well-connected and distort decision-making. Ditto for corporate loopholes, as that rate fell to 25 percent, too.

There is no greater issue for the country than getting control of Uncle Sam’s finances, and no starker contrast with what Obama proposes to do if re-elected.

– By Kyle Wingfield

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333 comments Add your comment

George P. Burdell

March 23rd, 2012
6:22 pm

You are correct but I’m not real optimistic any of them are going to get it done in time. There are just too many people getting their share of the action and they will fight to protect their piece of the gravy train. I think we are going to have to hit rock bottom before it really sinks in just how bad of shape we are in. The sad thing is that whether it is cutting government benefits, high inflation or some combination of the two, it is going to hit the less fortunate the hardest. With every additional responsibility handed over to the government, people are becoming more depedant on the government and they must not realize how perilous the position the country is in. I know I’m not really planning on SS to fund my retirement, or even contribute to it, and you would think lower income people would be terrified of being completely dependant on a broke goverment to provide for them. At some point, and probably fairly soon, things are going to get really ugly and we may even see riots and other public demonstrations that we never thought possible in the US.

Hillbilly D

March 23rd, 2012
6:26 pm

Some good ideas, some bad ideas but it doesn’t have a snowball’s chance in hell of ever passing.

ragnar danneskjold

March 23rd, 2012
6:44 pm

Ryan’s blueprint may well define the November election. Well, that and the lack of a budget out of the democrat senate.

DeborahinAthens

March 23rd, 2012
6:45 pm

The Bush tax breaks are a huge part of the reason we are here. Bush was warned they would cause huge deficits. Obviously they have not created jobs, as the Republicans keep saying they will. The first thing we need to do is let ALL of the Bush tax cuts expire. Then we need to lowere the corporate rate to 24%. Then we need to eliminate the thousands of loop holes. Then, on the spending side we need to make the normal retirement age 70 for those born after 1970. We need to start a voucher system (Ryan’s plan) for the states Medicaid Federal funding. Bring our troops home from Afghanistan and Iraq. Stop sending money to these rat holes of corruption. Stop sending money to Egypt and Pakistan. If Iran acts up, drop a nuclear bomb on their heads. Don’t send troops. Don’t apologize. If you are going to fight a war, fight a war. The BS Bush promulgated has cost this country mightily and we might never recover.

MarkV

March 23rd, 2012
6:57 pm

Kyle,

I believe that the first thing when one argues something should be to show some logic behind the argument. You have started with the following:

“First: Tax revenues during the past 60 years, regardless of tax rates or loopholes, have averaged 18 percent of gross domestic product. So, if we are serious about balancing the budget, we cannot keep spending above 22 percent of GDP, as Obama proposes to do indefinitely. We have to get it to 18 percent or less.”

I am not arguing right now whether we should or should not spend above 22 percent of GDP, but I submit that you have not presented any logical argument against it. Just saying that because tax revenues during the past 60 years have averaged 18 percent of gross domestic product is not an argument. Do you mean that we should always do only what we did in the past?

The other important point of your article and of the proposed budget is the way Ryan wants to hold down spending on Medicare and Medicaid. That will be an important political issue in the campaign for sure. Reining the spending Ryan’s way means seniors paying more from their pockets. Thinking that choosing competing, private insurance plans instead of government as a payer would somehow magically lower the medical costs is pure fantasy. It might force the seniors to get less care, however.

Liberals eat their children

March 23rd, 2012
7:08 pm

The biggest problem is the DEMOCRATS in the SENATE lead by the idiot Harry Reid. They and President Obama refuse to cut spending because their REAL AGENDA is to destroy America, Capitalism, Freedom, Self Control, and the Free Market.

Road Scholar

March 23rd, 2012
7:17 pm

When you’re in debt , cut your revenue stream, right? Tax cuts for all…er…oh, only the rich?

Tiberius - Your lightning rod of hate!

March 23rd, 2012
7:22 pm

As usual, MarkV misses the point entirely just to argue with Kyle.

The point being made, MarkV, is that having 60 years of data showing that tax revenues as a percentage of GDP is significant in this regard: If you go back 60 years (that would be the 1950’s for you government educated drones), you had record growth in the economy, low joblessness rates, prosperity previously unheard of, and even funded the Vietnam War and the Space Race – and STILL didn’t rack up massive debt.

Why?

Because our Congresses and Administrations knew not to overspend what they didn’t have. They had CONTROL over their excessive vote-buying urges.

So yes, MarkV, you actually DO go back to doing what we always did – STOP SPENDING WHAT WE DON’T HAVE.

Paul Ryan just proved what many of us have been saying for years, and wondering why the rest of you are so damned slow to pick up on. We don’t have a revenue problem, we have a SPENDING problem.

Tiberius - Your lightning rod of hate!

March 23rd, 2012
7:24 pm

Hillbilly D, if Romney gets into office and the Senate gets to an even 50-50, this plan passes without the need for a filibuster.

Tiberius - Your lightning rod of hate!

March 23rd, 2012
7:26 pm

“The Bush tax breaks are a huge part of the reason we are here.”

No, they’re not. SPENDING is why we are here.

“Bush was warned they would cause huge deficits.”

And yet is was (and remains) unbridled spending that caused the deficits.

Liberals eat their children

March 23rd, 2012
7:29 pm

“It’s the Over Spending Stupid” You can’t tax us enough to keep up with this run away spending from the corrupt government.

Michael H. Smith

March 23rd, 2012
7:29 pm

Kyle, we know we have the right agenda for the country, economic and otherwise. Now we only need to put Republicans in control of the Senate, Mitt Romney in the White House and hold these people we get elected accountable unlike what we conservatives done – by merely complaining – when Bush & Company were in charge.

I Report (-: You Whine )-: mmm, mmmm, mmmmm! Just sayin...

March 23rd, 2012
7:30 pm

Arguing with liberals over the finer points of a spending budget is like trying to explain to them how to balance a checkbook, it’s just so pointless.

~~~~~

CUSHING, Okla. — President Barack Obama Thursday ordered the government to fast-track a segment of the Keystone XL oil pipeline from Oklahoma to the Gulf coast. – Urinal

The pipeline to nowhere.

Hillbilly D

March 23rd, 2012
7:33 pm

Tiberius

I think as soon as they start talking about Medicare, it’s DOA. Time will tell, though.

Michael H. Smith

March 23rd, 2012
7:38 pm

We don’t have a revenue problem, we have a SPENDING problem.

And, a Federal GUB’MENT that is too dang big and too dang powerful problem.

Our agenda remains the same: Cut the Size, Scope and Spending of the Federal Government

I Report (-: You Whine )-: mmm, mmmm, mmmmm! Just sayin...

March 23rd, 2012
7:39 pm

Listening to all of the left wing race hustlers and lunatics spew their noxious hatreds in all the wrong directions, one is reminded of why we need neighborhood watch volunteers in the first place, if you know what I mean…

MarkV

March 23rd, 2012
7:40 pm

As usual, Tiberius misses the point that there should be a logic presented when an argument is made. Kyle has not presented it. But one cannot expect Tiberius to understand that.

Rafe Hollister

March 23rd, 2012
7:40 pm

Liberals are very literal. If you talk about low taxes they say why don’t we go back to rates under Eisenhower when they were 70% on the wealthy. You can’t convince them that people did not pay 70%, they had to right that was the rate. No, there were so many loopholes and tax avoidance schemes that they paid much lower rates. What I think Kyle is saying is that 18% is just about all you can expect to ever get from the tax revenue. Liberals are not flexible enough in their thinking to absorb the fact that people change their habits to avoid taxes, they spend more on tax lawyers and accountants. There is a certain threshold that people will voluntarily pay, but cross that and watch them move, change their habits, and go into the avoidance mode. No matter how over the years they have changed the tax laws, they get about 18% in tax revenue.

So, there is only so much blood in the turnip, Congress needs to learn to live with that.

Deborah, regardless of the Obama tax cuts for the wealthy, we would still be 15 T or more in debt. 85% of the Obama tax cuts for the wealthy went to the middle class. The amount going to your enemy the rich was nice for them but insignificant, compared with the excessive spending of the Oblamer regime.

Hate to agree with a Techster, but Burdell is right, the big economic collapse will hit the poor and indigent the worst, as it always does, so instead of fighting austerity they should be for it.

Ryan’s budget is very good and more than we can get enacted, but as Ron Paul says hard to get excited about something that takes 28 years to balance the budget.

Michael H. Smith

March 23rd, 2012
7:40 pm

Hillbilly D

Why wasn’t obumerCare DOA when obumer took $500 billion out from Medicare and tossed it over the cliff along with granny tied into that dunkey driven wheelchair HUH?!

Rafe Hollister

March 23rd, 2012
7:45 pm

A very logical argument, Kyle, almost all of us were able to follow with no problem.

Just saying..

March 23rd, 2012
7:48 pm

” if you know what I mean…”

I certainly hope we don’t…

MarkV

March 23rd, 2012
7:49 pm

It is no problem to follow an argument that is not submitted.

Rafe Hollister

March 23rd, 2012
7:50 pm

Hillbilly D
I heard today that Obamacare eventually does away with Medicare rolling all seniors into Obamacare. If so, the GOP should be shouting that from the rooftops to let seniors know that the road ahead changes for them anyway.

Any one know if that is true about Obamacare eliminating Medicare. Have never heard that discussed before.

Tiberius - Your lightning rod of hate!

March 23rd, 2012
7:50 pm

“Kyle has not presented it.”

And yet he has. As have I.

That you aren’t capable of understanding logic is not our fault, but yours, MarkV.

Hillbilly D

March 23rd, 2012
7:52 pm

MHS

One reason is that the Democrats didn’t publicize that and run ads all over the TV, as they certainly would this plan because it’s from the Republicans. They took the stealth approach.

I Report (-: You Whine )-: mmm, mmmm, mmmmm! Just sayin...

March 23rd, 2012
7:52 pm

Looking at the Pukovich cartoon, one realizes how the left wing race hustlers and lunatics are extremely sorrowful that the shooter wasn’t some white guy, for now they are unable to really work themselves up into a mindless frenzy, if you know what I mean…

I guess they’ll just have to settle on a low key race hating agitation.

Rafe Hollister

March 23rd, 2012
7:54 pm

MarkV
You started the argument, the logic was clear and did not necessarily cause an argument.

Tiberius - Your lightning rod of hate!

March 23rd, 2012
7:55 pm

“but I submit that you have not presented any logical argument against it.”

And btw, MarkV, the argument against spending at 22% of GDP is that our REVENUES DON”T GO HIGHER THAN 18% OF GDP.

That is why you don’t spend higher, my reading comprehensionally-challenged friend. Of course, if you want to make the case that a nearly 20% tax hike on everybody is the way to stimulate us out of a recession, go for it.

Michael H. Smith

March 23rd, 2012
7:59 pm

Hillbilly D

Yeah, kind of like obumer/Pelosi & dunkey Company falsely advertising job creation, while the CBO was setting thei record straight and filling everyone in on the facts that obumerCare is a jobs killer.

CBO: Obamacare Will Kill 800,000 Jobs Over Decade

(CNSNews.com) – On the same day that House Democratic Leader Nancy Pelosi (D-Calif.) was chiding House Republicans over job creation, the director of the Congressional Budget Office was testifying in the House Budget Committee that the health-care law President Barack Obama signed last year will kill about 800,000 American jobs over the next decade.

CBO Director Douglas Elmendorf was responding to a question from Rep. John Campbell (R-Calif.) regarding an August report from the CBO.

http://cnsnews.com/news/article/cbo-obamacare-will-kill-800000-jobs-over-decade

I Report (-: You Whine )-: mmm, mmmm, mmmmm! Just sayin...

March 23rd, 2012
8:01 pm

Hey, just saying.., I agree that they should arrest the shooter. But I don’t agree we should use this tragedy as an opportunity to start a race war in the United States. I guess some are too blatantly and blindingly stupid to follow the bouncing ball. We are again denouncing the wrong people.

And the Urinal just joins the mob. What an ignorant country we truly live in.

I Report (-: You Whine )-: mmm, mmmm, mmmmm! Just sayin...

March 23rd, 2012
8:02 pm

Ooops-

What a truly ignorant country we live in.

Lil' Barry Bailout (Revised Downward)

March 23rd, 2012
8:12 pm

Ryan’s new budget plan points the way to saner fiscal future
5:54 pm March 23, 2012, by Kyle Wingfield
———————–

Fiscal sanity is not what interests Democrats. Maintaining their power by confiscating the property of a small group of “makers” and using it to buy the votes of a much larger group of “takers” is what they’re interested in, and fiscal sanity makes that more difficult.

Democrats: Fiscally insane America-haters.

Rafe Hollister

March 23rd, 2012
8:15 pm

http://www.heritage.org/research/factsheets/2012/01/obamacare-obama-ends-medicare-as-we-know-it

Well, the libs will argue that this is from a non objective site, but here it is. Too complicated to ever communicate to seniors who love Medicare, especially Dem seniors, who love their free stuff and don’t want to hear the truth.

Lil' Barry Bailout (Revised Downward)

March 23rd, 2012
8:16 pm

MarkV: Do you mean that we should always do only what we did in the past?
——————————–

Where is the Democrat budget?

MarkV

March 23rd, 2012
8:22 pm

Tiberius@7:50 pm: MarkV: “…there should be a logic presented when an argument is made. Kyle has not presented it.”
Tiberius: “And yet he has.”

Not surprisingly, Tiberius cannot read. Here is Kyle’s wording:

“First: Tax revenues during the past 60 years, regardless of tax rates or loopholes, have averaged 18 percent of gross domestic product. So, if we are serious about balancing the budget, we cannot keep spending above 22 percent of GDP, as Obama proposes to do indefinitely. We have to get it to 18 percent or less.”

Kyle argument is that because the tax revenues during the past 60 years averaged 18 percent, we cannot keep spending above 22 percent. That is an argument, but there is no logic for it presented. Again, one cannot expect Tiberius to understand what is an argument and what is the logic of the argument, and whether it has been presented.

Rafe Hollister@7:54 pm: “MarkV. You started the argument, the logic was clear and did not necessarily cause an argument.”

If you think so, then point out from Kyle’s argument the words that presented the logic of it.

Lil' Barry Bailout (Revised Downward)

March 23rd, 2012
8:27 pm

Don’t let 60 years of empirical evidence get in the way of your wet dream of bigger government forever.

Tiberius - Your lightning rod of hate!

March 23rd, 2012
8:29 pm

For the reading challenged such as MarkV . . .

Kyle’s argument: “So, if we are serious about balancing the budget, we cannot keep spending above 22 percent of GDP, as Obama proposes to do indefinitely. We have to get it to 18 percent or less.”

Case closed.

Now, MarkV, if you wish (once again) to opine as to why a nearly 20% tax increase for everybody is the way to get us out of a recession, please do so. Otherwise, shut up and quit whining about your limitations. Or simply tell us how we can get to 22% of GDP revenue levels without raising taxes.

Your call, son.

Lil' Barry Bailout (Revised Downward)

March 23rd, 2012
8:31 pm

Tax increases don’t grow the economy, they shrink it. Libtards think the opposite because they think the government is the economy.

WANTED: Bloggers With An IQ Above 52

March 23rd, 2012
8:35 pm

Ryan’s new budget plan points the way to saner fiscal future? HUH

Paul Ryan cannot solve the budget PROBLEM with the same mind that created it.

Out by the Pond

March 23rd, 2012
8:37 pm

Cut federal spending. End the wars and cut defense in half. We are still the most powerful country in the world and we can reduce taxes for all

WANTED: Bloggers With An IQ Above 52

March 23rd, 2012
8:42 pm

@Rafe Hollister

March 23rd, 2012
8:15 pm
http://www.heritage.org/research/factsheets/2012/01/obamacare-obama-ends-medicare-as-we-know-it

Well, the libs will argue that this is from a non objective site, but here it is.

Too complicated to ever communicate to seniors who love Medicare, especially Dem seniors, who love their free stuff and don’t want to hear the truth.
*************************************************************************************

How dare you DISRESPECT SENIORS.

I BET YOUR mother, your grandmother, their mother, their grandmother, their mothers mother

all depended on social security or some form of medicare.

So don’t get high and mighty because a lot of you on this blog AINT IN THE 1%.

MOST OF you are ONE PAYMENT CHECK AWAY FROM BEING HOMELESS.

WANTED: Bloggers With An IQ Above 52

March 23rd, 2012
8:48 pm

@I Report (-: You Whine )-: mmm, mmmm, mmmmm! Just sayin…

March 23rd, 2012
7:52 pm
Looking at the Pukovich cartoon, one realizes how the left wing race hustlers and lunatics are extremely sorrowful that the shooter wasn’t some white guy, for now they are unable to really work themselves up into a mindless frenzy, if you know what I mean…

I guess they’ll just have to settle on a low key race hating agitation.

****************************************************************************************************

It could happen to any family.

NO ONE IS IMMUNE

Tiberius - Your lightning rod of hate!

March 23rd, 2012
8:50 pm

“WANTED: Bloggers With An IQ Above 52 ”

Why do you want bloggers at least twice as intelligent as you? ;)

Atlantarama

March 23rd, 2012
8:51 pm

I think the corporate tax rate should be based on a company’s investment in the U.S. Those companies based in the U.S. or foreign companies employing more Americans should be taxed less than companies using foreign tax shelters or outsourced workers. The government would gain from taxes the American workers would pay.

Lil' Barry Bailout (Revised Downward)

March 23rd, 2012
8:52 pm

WANTED: Bloggers With An IQ Above 52
———————–

Just step over it and move on, everyone.

Linda

March 23rd, 2012
8:52 pm

Deborah@6;45, This is the same comment you have made many times before. It’s no more legitimate now than it was the first time you made it. The unemployment rate every month during the Bush Adm. for 8 years was lower than it has been every month during the Obama adm. for over 3 years. There is no question that the Bush tax cuts worked. What has not worked during Obama is his attempts to stimulate the economy with spending money that we do not have for junk we do not need. That is the difference.
Maybe you missed the fact that Obama has already brought our troops home from Iraq, months ago.
Maybe you also missed the fact that in Obama’s budget released in Feb., he raised taxes on everyone & everything & still had a trillion & a half dollar deficit every year, taking our natl. debt another $10 T, to $26 T.
Obama has added more to the natl. debt in 3 yrs. than Bush added in 8 yrs. Who was it that “promulgated?”

Now with Ten Percent More Flavor

March 23rd, 2012
8:55 pm

Now that the GOP has given the wealthiest massive tax cuts since 2001 and 2003, they want to pay for that and all past unfunded GOP expenditures plus more tax cuts for the wealthiest with what. The little that the poorest have left. Go ahead and show us that report that proves conservative Republicans are more charitable while you’re at it. Will the GOP finally be satisfied once they’ve had their fill of the poor, roasted, grilled, fried… I hear they freeze well too.

Lil' Barry Bailout (Revised Downward)

March 23rd, 2012
8:56 pm

I think the corporate tax rate should be based on a company’s investment in the U.S.
——————————

And I think people who want bigger government should pay higher taxes.

Time to pay your fair share, Democrats.

Linda

March 23rd, 2012
8:56 pm

Liberals eat@7:08, Don’t hold back! Why don’t you tell it like it is, Brother? I agree with you entirely. Wish FOX could reiterate such.

ByteMe

March 23rd, 2012
8:58 pm

Some people are statistically challenged. Anyone remember from school what AVERAGE means? Let me give you a hint: it’s not the MAXIMUM. You’re taking the AVERAGE and proclaiming it needs to be the MAXIMUM, and that’s just stupid considering we’re still winding down a war and coming back from a monster recession.