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
I Report (-: You Whine )-: mmm, mmmm, mmmmm! Just sayin...
March 24th, 2012
9:32 pm
Well, at least we know Louisiana isn’t AFUBR.
luangtom
March 24th, 2012
9:32 pm
I am still waiting for someone of authority to tell the US what actually was accomplished by the Democrats when they controlled House, Senate and White House for the first two years of this administration. Anyone? Why did the Senate not even get a budget passed during those two years of ultra-control? Anyone?
Linda
March 24th, 2012
9:37 pm
Mr. WANTED@9:08, I realize that the words “to” & “too” are a little much for some people, especially those people with limited spelling abilities from third grade. Let me give my third accolades tonight to my third grade teacher, Mrs. Wilson. I’m sorry that you were not equally afforded the opportunity to be educated to the maximum degree in our sorry school system & hope that you will jump on board with this new push to offer charter school alternatives to students, such as yourself, who have been denied a proper education.
What makes you think Kyle is not paying me to be a grammar checker & that I am cheap?
Cutty
March 24th, 2012
10:12 pm
When in debt…. Cut spending, increase revenue. To think that you can only do one or the other is just asinine. Until both parties realize this, we’re screwed.
Linda
March 24th, 2012
10:23 pm
Cutty@10:12, Thanks to the Democrats, we’re “screwed.” Democrats will never cut spending & will increase spending, every chance they get.
Lil' Barry Bailout (Revised Downward)
March 24th, 2012
11:02 pm
When in debt…. Cut spending, increase revenue. To think that you can only do one or the other is just asinine.
———————–
We know they can increase taxes, Einstein. The Democrats do it every chance they get. Let’s see them cut spending. After they’ve done all of that that they can, then we can talk about confiscating more of the property of people who work for a living.
lefty_316
March 25th, 2012
12:27 am
Well it looks as though Santorum has won another primary, this time in Louisiana. It’s not a coincidence he’s winning the states that year after year have the lowest graduation rates in the nation. His voters are Christian fundamentalists and it’s an established fact that education is the enemy of religious fundamentalism.
Tiberius - Your lightning rod of hate!
March 25th, 2012
4:50 am
“When in debt…. Cut spending, increase revenue. To think that you can only do one or the other is just asinine.”
Obviously, Cutty missed the point of this piece entirely.
Why am I NOT surprised . . . ?
Lil' Barry Bailout (Revised Downward)
March 25th, 2012
6:55 am
lefty_316: It’s not a coincidence Santorum’s winning the states that year are the most conservative and patriotic (oops, redundant).
———————-
Fixed.
@@
March 25th, 2012
7:13 am
Obamacare’s Contract Problem
(“The powers not delegated to the United States by the Constitution, nor prohibited by it to the states, are reserved to the states respectively, or to the people”), the court has specifically forbidden government to compel contracts.
In 1992, the court held unconstitutional a law compelling states to “take title to” radioactive waste.
Obamacare = radioactive waste.
Hopefully SCOTUS will “award” Obama and his BFDealers with a NO DUMPING! sign.
lefty_316
March 25th, 2012
7:57 am
Lil’ Barry apparently you consider the efforts of the religious right to legislate their religious beliefs patriotic – despite the fact that it’s forbidden by the Constitution. That’s not patriotic, not in the least.
James Madison, after studying every political system ever devised by man, correctly concluded that each and every government that has become infused with religion has become terribly corrupt and ultimately failed. And that is the threat to America represented by Rick Santorum and the religious right.
dcb
March 25th, 2012
8:06 am
Let’s have the finger-pointing end and concentrate on solutions. Democrats this, GOP that – Bush’s fault, Obama’s lack of reality, Barney Frank’s blinders …. true or not is a matter of opinion anyway. What does all this really matter? Let’s get on to the solutions. And Kyle is right on – leave the presidential part out of this. Its all politics anyway. Point the finger where it belongs – Congress. And let’s put the pressure on them to accept the responsibility – and all the PR that goes with it – to come up with specific and real steps to solve the fiscal problems. If term limits or reduction in Congressional perks is what’s necessary to have them bite the bullet, then let’s get to it!
Lil' Barry Bailout (Revised Downward)
March 25th, 2012
8:09 am
lefty_316: apparently you consider the efforts of the religious right to legislate their religious beliefs patriotic – despite the fact that it’s forbidden by the Constitution.
————————
I do consider efforts to limit or prohibit the killing of unborn children patriotic. I do consider preventing the federal government from forcing people to pay for abortions, birth control, and sterilizations to be patriotic.
It’s ironic that you find protecting religious freedom, protected by the Constitution, to be “unconstitutional”.
Why do you hate freedom? Oh, right, Democrat.
Lil' Barry Bailout (Revised Downward)
March 25th, 2012
8:15 am
dcb: If term limits or reduction in Congressional perks is what’s necessary to have them bite the bullet, then let’s get to it!
—————————-
Seems to me the Ryan budget does “bite the bullet” a bit. Are you implying that it doesn’t cut deep enough?
Michael H. Smith
March 25th, 2012
8:48 am
Nah, a President holds the power of the veto and the bully pulpit. Presidents’ too, share rightful responsibility and their proper degree of accountability.
But now, what about us?
When the cuts begin are you going to cry: Don’t cut my program, my project, my benefits, my loophole, my pet deductions, my subsidy or my service? hmm…
Ryan’s plan I’ve been in close agreement with for some time: A two tier flat tax, elimination of “ALL” – not some or a few that don’t affect me-ism – deductions, subsidies and loopholes of any and every type. Including a gradual transition of the entire “safety net” a.k.a. entitlements from the direct political – federal – control to direct individual control.
My greatest difference is in the funding mechanism and investment strategies that would or could be used to assure permanent fiscal solvency and a near complete individual autonomy from government.
Liberals eat their children
March 25th, 2012
9:23 am
Untill you get the corrupt dishonest Democrats out of office and the Whitehouse there won’t be any changes to help America. So vote ALL the corrupt dishonest Democrats out of office this year. Anybody but Obama. Besides Obama than will have the time so he can attend one of his Nation of Islam and Black Panthers rallies.
Rafe Hollister
March 25th, 2012
9:24 am
dcb
As that great philosopher Dr Phil would say, “you can’t fix what you don’t acknowledge”. We have to acknowledge who is to blame, who caused this mess, and what they did to cause it, before you can correct it. Also, you can’t expect the same people who caused it to correct it. Blame is widespread among both parties and we need to replace any of them that were involved, starting with Oblamer.
Just saying..
March 25th, 2012
9:59 am
Barry; “…And I’m wondering why YOU aren’t buying oil futures if it’s so profitable.”
Ford at $1.61 and Apple at $73 worked well enough.
@@
March 25th, 2012
10:03 am
test
@@
March 25th, 2012
10:05 am
Duplicate comment that never got posted?
Okey dokey.
WANTED: Bloggers With An IQ Above 52
March 25th, 2012
10:06 am
@Liberals eat their children
March 25th, 2012
9:23 am
Untill you get the corrupt dishonest Democrats out of office and the Whitehouse there won’t be any changes to help America. So vote ALL the corrupt dishonest Democrats out of office this year. Anybody but Obama. Besides Obama than will have the time so he can attend one of his Nation of Islam and Black Panthers rallies.
***********************************************
ATTENTION:
Ryan wants to make rich people RICHER.
POOR people you are on your own.
That means that MOST of you on this blog………..YOU ARE ON YOUR OWN.
Avery
March 25th, 2012
10:08 am
This statement is unclear and actually does not mean anything: “Tax revenues during the past 60 years, regardless of tax rates or loopholes, have averaged 18 percent of gross domestic product.”
You cannot take an average of time-series data, and then claim that the “average” remains at this level “regardless of tax rates or loopholes.”. Again, the sentence doesn’t even make sense in a statistical setting. In fact, if you look at the data ( http://www.taxpolicycenter.org/taxfacts/displayafact.cfm?Docid=200 ), there are very clear trends in tax revenues which are driven by policy changes. For example, during Clinton’s second term, receipts range from 19% to 21%. They also were over 20% during the last few years of FDR’s presidency, and near 20% in the 69-70 years.
WANTED: Bloggers With An IQ Above 52
March 25th, 2012
10:09 am
@Liberals eat their children
March 25th, 2012
9:23 am
. Besides Obama than will have the time so he can attend one of his Nation of Islam and Black Panthers rallies.
*********************************************************************************
Just like MOST OF YOU have time to attend one of your WHITE HOODED rallies.
WANTED: Bloggers With An IQ Above 52
March 25th, 2012
10:13 am
@Lil’ Barry Bailout (Revised Downward)
March 25th, 2012
8:09 am
lefty_316: apparently you consider the efforts of the religious right to legislate their religious beliefs patriotic – despite the fact that it’s forbidden by the Constitution.
————————
I do consider efforts to limit or prohibit the killing of unborn children patriotic. I do consider preventing the federal government from forcing people to pay for abortions, birth control, and sterilizations to be patriotic.
It’s ironic that you find protecting religious freedom, protected by the Constitution, to be “unconstitutional”.
Why do you hate freedom? Oh, right, Democrat.
************************************************************************
I find it IRONIC that YOU want to PROTECT the unborn and you HATE freedom for PEOPLE of color.
WANTED: Bloggers With An IQ Above 52
March 25th, 2012
10:16 am
@lefty_316
March 25th, 2012
7:57 am
Lil’ Barry apparently you consider the efforts of the religious right to legislate their religious beliefs patriotic – despite the fact that it’s forbidden by the Constitution. That’s not patriotic, not in the least.
James Madison, after studying every political system ever devised by man, correctly concluded that each and every government that has become infused with religion has become terribly corrupt and ultimately failed. And that is the threat to America represented by Rick Santorum and the religious right.
***************************************************************************************
PEOPLE that INFUSE government with religion DO NOT READ THEIR BIBLES.
Their actions speak louder than words.
Just saying..
March 25th, 2012
10:27 am
Civics vs Civility
Linda’s Fight of the Century
dean
March 25th, 2012
10:51 am
You conservitives better be careful what ya’ll wish for…..the south get more government welfare then any other part of the country…………..everyone doesn’t want to live in a trailer and drive a 1966 pickup
Ol' Timer
March 25th, 2012
10:57 am
Cut taxes! Cut taxes! Even though tax revenues, as a percentage of GDP, is at a 60 year low!
Imagine trying to live and support your family on the income you had in 1960. Why, you’d have to cut, cut, cut; but I’d like to think you’d look for ways to increase your income along with the budget cuts.
This ol’ saw about tax cuts creating jobs has been proven over and again to be about as credible as the Easter Bunny, the Tooth Fairy and Santa Claus. . . but some still believe in such things and continue to repeat and perpetuate it as if it was true.
Just saying..
March 25th, 2012
11:08 am
NYTimes: “The largest tax deduction in the code, used to write off the cost of a company’s health insurance for its workers, would be phased out over 15 years. The code’s other two big deductions, for mortgage interest and charitable contributions, would be curtailed, while the deduction for state and local taxes would be eliminated.”
The Future, Obama or Romney.
Just saying..
March 25th, 2012
11:11 am
Ol’ Timer, we’ve seen this movie before, haven’t we?
WANTED: Bloggers With An IQ Above 52
March 25th, 2012
11:17 am
@Linda
March 24th, 2012
9:37 pm
Mr. WANTED@9:08,
What makes you think Kyle is not paying me to be a grammar checker & that I am cheap?
*********************************************************************************
THANK YOU for confirming what most of us BELIEVE.
THAT SOME PEOPLE on this BLOG are BEING PAID to spew HATRED.
What does that say about KYLE and what does that say about the AJC?
Jay Mann
March 25th, 2012
11:20 am
OK on the 25% higher tax rate – just make sure that Mitt Romney and all the other “portfolio managers” pay that full 25% – the labor of portfolio management should be paying just as much as the labor of the working class!!! Do this first, get rid of the “Bush tax cuts” of course either by their expiration on Dec 31,2012, or using this new tax bill. Then cut military/military industrial complex budgets FIRST and other government programs that cannot justify their current funding levels. Only as a last resort, burden the poor and working classes with cuts to the programs they have been promised for their lifetimes and have paid into for their lifetimes! This approach is the ONLY fair and equtable way to get control of the Federal deficits and begin to again pay down the DEBT. You young working people, I see you all the time at Lowes, the grocery store, Walmart, etc.- think about it, if SS and Medicare are allowed to be destroyed, what will you survive on when you reach 65 or 70 or 75? You can’t set aside anything from your check for investments because it takes everything to live on from day to day. Wise up, the wealthy have been getting ALL the breaks from Washington. Don’t believe the Crap that they are getting the shaft and paying too much! They use everything this country has contributed to make their billions – they use you, your education, your skills, our infrastructure, our military to protec them, and on and on!!! They should pay at least the full 25% and NOT be allowed to hide their wealth earned here in foreign banks [ask Romney about his foreign accounts]. Hes a liar and cheat. How did he purchase a company for Bane for $5M, cook the books and then sell the same company for $100M???? Only a liar and cheat could have pulled this off. How prowd is he of this purchase/sell? Someone should be asking for the FULL details!!
WANTED: Bloggers With An IQ Above 52
March 25th, 2012
11:20 am
@dean
March 25th, 2012
10:51 am
You conservitives better be careful what ya’ll wish for…..the south get more government welfare then any other part of the country…………..everyone doesn’t want to live in a trailer and drive a 1966 pickup
***************************************************************************************
“everyone doesn’t want to live in a trailer and drive a 1966 pickup ”
Touche’
Else
March 25th, 2012
11:46 am
While you repubs are showing us your economic acumen, please explain why the bush wars were un-funded?
Linda
March 25th, 2012
11:46 am
Mr. WANTED@11:17, I did not confirm that I was being paid. I asked you a question. You do know the difference between a statement & a question, don’t you? When have I spewed HATRED, Mr. Capital letters? The truth is that neither Kyle nor the AJC can afford me.
Just saying..
March 25th, 2012
11:55 am
Else: “…please explain why the bush wars were un-funded?”
Helps balance phony budgets.
Linda
March 25th, 2012
12:05 pm
Jay Mann@11:20, Seems like you are confused with the difference between marginal income taxes on INCOME & capital gains taxes on SALES of investments.
The upper tax brackets under the Bush/Obama tax cuts are HIGHER than Ryan’s top bracket of 25%.
If the military budgets are cut, how do we continue to use oil from the Middle East?
How have the poor paid into programs for their lifetimes?
How much more do the working class receive from programs than they paid into those programs?
The Democrats are destroying SS & Medicare by denying the problems.
Young people will survive just like all other prudent people, especially the self-employed. Don’t undermine young people & believe that they will be dependent on the govt. The fed. govt. will be bankrupt by the time they reach retirement age.
The wealthy don’t pay taxes on their wealth. High income earners pay the majority of taxes.
Abiding by the US tax code is not cheating.
AU Liberal in ATL
March 25th, 2012
12:08 pm
I can’t believe you actually get paid for your “thoughts”.
On another point, I’d bet my bottom dollar that the Louisiana (pretend it’s Obama) woman identifies herself as a Christian. Ah Christian conservatives, doing more harm to the cause of Christianity than any Muslim, Buddhist, atheist, homosexual or bleeding heart liberal could ever do.
Ima Crooked Pol
March 25th, 2012
12:16 pm
Lobbyist crooks pay off political crooks for more of the same!
http://www.ajc.com/news/georgia-government/wheeler-dealers-efforts-pay-1397380.html
WANTED: Bloggers With An IQ Above 52
March 25th, 2012
12:20 pm
@Linda
March 25th, 2012
11:46 am
Mr. WANTED@11:17, I did not confirm that I was being paid. I asked you a question. You do know the difference between a statement & a question, don’t you? When have I spewed HATRED, Mr. Capital letters? The truth is that neither Kyle nor the AJC can afford me.
************************************************************************************
DONT try to WALK IT BACK NOW.
The cat is out of the bag.
Dirty Dawg
March 25th, 2012
12:38 pm
I still say that you, Kyle, don’t really believe all this crap that you support and are doing it just for the money…of course I could be wrong, which is even worse to think about since it would mean you truly do believe and that’s really scary.
Just saying..
March 25th, 2012
12:42 pm
-Thousands of career scientists worldwide stake their professional lives on the facts of global warming? A Conspiracy!
-Liberal/Socialists/Marxists/Commie/Pinkos with a grand plan to erode core American values over several years? A Conspiracy!
-Lugo tribesman/colonial boy given peculiar name, slipped into American w/o a birth certificate, then elected US President? A Conspiracy!
-GA legislature passes complex tax code changes in 3 days at end of session, by overwhelming margins and with no public discussion? What Conspiracy?
Just saying..
March 25th, 2012
12:45 pm
52: “The cat is out of the bag.”
Artful.
lefty_316
March 25th, 2012
12:57 pm
Lil Barry, I am not a democrat and have never voted for a democrat in my life. I was a republican for 22 years before the party was destoyed by the religious right; since then I’ve been an independent. I may rejoin the GOP at some point but only if it becomes the party of fiscal conservatism once again and gets out of the religion business.
I see you’re against paying for birth control and abortion. Well tell me then …..say taxpayers quit funding Planned Parenthood. PP spends 40% of their annual budget providing birth contol to women who can’t afford to pay for it themselves. So….no birth control, no abortion….are you prepared to pay higher taxes to support the explosion in welfare assistance requests that will bring? Do you know such a policy is called? Fiscal liberalism.
And don’t give me the “we need to get back to the morality of the old days, abstinence until marriage” speech either.
Fact: The Constitutional Convention was held in 1787.
Fact: 45% of American women were pregnant when they married in 1787.
Just saying..
March 25th, 2012
1:02 pm
Lefty: “no birth control, no abortion….are you prepared to pay higher taxes to support the explosion in welfare assistance requests that will bring?”
It’s a taxing concept to grasp, isn’t it?
gm
March 25th, 2012
1:20 pm
But if you have children, grandchildren or just expectations of living more than another 10 years or so, you must know runaway
Amazing how the hypocrites on the right care about their grand children, now that Obama is spending money on Americans, but were silent when Bush was spending out of control especially in Iraq.
Were was the Ryan budget when Bush was in office for 8 years? Obama has brought this country back from life support, now we have all these monday morning quarterbacks.
Chris Sanchez
March 25th, 2012
1:27 pm
Spending, spending, spending! When will liberal realize that SPENDING is the problem? Our government takes in over $2 TRILLION in tax revenues for goodness sake. It is most certainly NOT a revenue problem this country faces. Allowing politicians of BOTH parties to continue to purchase re-election via the public purse is the problem. Before we are going to find meaningful cuts in spending, term limits will have to be enacted via Constitutional Amendment. Limit the amount of time these pols may spend in Washington DC and maybe, just maybe, we have a chance of enacting meaningful reforms to the spending habits in Washington. If we don’t, the rest of the world will when they finally refuse to purchase US government-issued debt.
Linda
March 25th, 2012
1:42 pm
Else@11:46, I think the families of all those who died on 9/11 would take offense to your question. There were no Bush wars. The Afghanistan war had bipartisan support in congress.
The Iraq was also had bipartisan support. Would you like to watch a video of the Democrats?
The Libya “not” war was Obama’s war. Congress learned about it from TV.
The economic stimulus bill was passed less than 3 weeks after Obama was inaugurated. Only 3 Rep. Senators voted for it, one of who later switched parties. At the time it was passed, the cost of both wars was about the same cost of this one bill, the largest spending bill in the history of the world, a bill that was a complete failure.
To answer your question, the wars in Afghanistan & Iraq were paid for the same way as the economic stimulus bill.
Linda
March 25th, 2012
1:47 pm
Mr. WANTED@12:20, PETA is looking for you for cruelty to animals. BTW, that’s a statement, not a question.
Just saying..
March 25th, 2012
1:57 pm
Linda: “To answer your question, the wars in Afghanistan & Iraq were paid for the same way as the economic stimulus bill.”
Actually, no. The point being made is that neither the Iraq nor Afghanistan wars were part of the annual budget process. For eight years, they were funded by “Emergency Appropriations”, a disingenuous accounting stunt that sought to conceal the actual yearly deficits of the Bush administration.