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
Ron
March 25th, 2012
11:47 pm
Linda, get a life. Move away from your computer, look around you. There is more to life than “working” this blog as much as you do.
Tiberius - Your lightning rod of hate!
March 26th, 2012
1:14 am
“That why I’m happy to have some of my tax dollars go to Planned Parenthood every year to pay for birth control for the indigent.”
Fine, lefty. Then donate to them on your own hook, but don’t force me to do the same if I don’t want to.
lefty_316
March 26th, 2012
1:16 am
Linda neither you of us get our history from ABC News; in fact I do not watch ABC News, ever. My education of US history between 1770 and 1810 comes from the 150 or so books I’ve read on the topic, books by genuine degreed historians, many of which I’ve had to requisition from the dusty archives of college libraries around the country. As I mentioned earlier Jefferson, for starters, was not a Chrstian:
“The whole history of these the Gospels is so defective and doubtful that it seems vain to attempt minute enquiry into it: and such tricks have been played with their text, and with the texts of other books relating to them, that we have a right, from that cause, to entertain much doubt what parts of them are genuine. In the New Testament there is internal evidence that parts of it have proceeded from an extraordinary man; and that other parts are of the fabric of very inferior minds. It is as easy to separate those parts, as to pick out diamonds from dunghills.
-Thomas Jefferson, letter to John Adams, January 24, 1814
lefty_316
March 26th, 2012
1:22 am
Linda let’s move onto Deist the Ben Franklin:
“I believe in one God, Creator of the Universe. That He governs it by His providence. That He ought to be worshipped. That the most acceptable service we render Him is doing good to His other children. As to Jesus of Nazareth, I think the system of Morals and his Religion, as he left them to us, the best the World ever saw or is likely to see; but I apprehend it has received various corrupt changes, and I have, with most of the present Dissenters in England, some doubts as to his divinity.” Ben Franklin, in a letter to Ezra Styles.
lefty_316
March 26th, 2012
1:26 am
Founding Father James Madison:
“What influence, in fact, have ecclesiastical establishments had on society? In some instances they have been seen to erect a spiritual tyranny on the ruins of the civil authority; on many instances they have been seen upholding the thrones of political tyranny; in no instance have they been the guardians of the liberties of the people. Rulers who wish to subvert the public liberty may have found an established clergy convenient auxiliaries. A just government, instituted to secure and perpetuate it, needs them not.” James Madison, A Memorial and Remonstrance, 1775.
lefty_316
March 26th, 2012
1:28 am
Founding Father George Washington:
“I am persuaded, you will permit me to observe that the path of true piety is so plain as to require but little political direction. To this consideration we ought to ascribe the absence of any regulation, respecting religion, from the Magna-Charta of our country.” George Washington, 1789.
lefty_316
March 26th, 2012
1:31 am
Founding Father Alexander Hamilton:
“In politics, as in religion, it is equally absurd to aim at making proselytes by fire and sword. Heresies in either can rarely be cured by persecution.” Alexander Hamilton, 1784.
Tiberius - Your lightning rod of hate!
March 26th, 2012
1:36 am
Maybe if lefty_316 would stop trying to deflect from the original issue that brought him / her into the conversation; that being whether Planned Parenthood should be getting tax dollars from government to fund their objectives, and focus his / her extensive historical knowledge on the Founding Father’s designed role of a limited Federal government, he / she would realize that they really don’t have a single Constitutional leg to stand on regarding this issue.
Doesn’t matter what Jesus would do – we’re not a theocracy.
Doesn’t matter what lefty_316 wants to do with his tax dollars – just don’t take them from me.
lefty_316
March 26th, 2012
1:37 am
And finally John Adams:
“Adams was raised a Congregationalist, but ultimately rejected many fundamental doctrines of conventional Christianity, such as the Trinity and the divinity of Jesus, becoming a Unitarian. Adams’ view of religion overall was rather ambivalent: He recognized the abuses, large and small, that religious belief lends itself to, but he also believed that religion could be a force for good in individual lives and in society at large. His extensive reading (especially in the classics), led him to believe that this view applied not only to Christianity, but to all religions.” Biography, Signers of the Declaration of Independence, 1848.
lefty_316
March 26th, 2012
1:47 am
Tiberius I would rather my tax dollars not go to any social programs. I would like to see them go to a small, limited government. I am an old school Goldwater coservative – small government, fiscal restraint, individual liberty.
But I live in the real world. I would rather have my tax dollars go to birth control for the poor instead of to raise their children. It’s a simple matter of economics.
Actually I’d like to see a policy that would strictly forbid any family or single woman who is receiving any type of taxpayer assistance – welfare, Medicaid, food stamps, assisted housing, etc – strictly prohibited from having additional children. If they can’t feed their current family then adding another mouth to feed won’t solve the problem. But there are Constitutional hurdles involved there I’m afraid.
Tiberius - Your lightning rod of hate!
March 26th, 2012
1:50 am
There are no Constitutional issues in denying tax dollars to anyone for an inability to take care of themselves.
Maybe if they knew there was no safety net available for them, their bad behavior would soon stop.
Lil' Barry Bailout (Revised Downward)
March 26th, 2012
6:13 am
leftythink lefty: I think your claims of being a Christian are dubious at best.
———-
Link please.
Calista scares me
March 26th, 2012
7:37 am
Ryan is influenced by the lobby of ALEC, which has written the laws for our congress and states for years now. They provide a template and have the people we elect fill in the blanks and then try to sell it. Legislation by the Corporation, for the Corporation……..
Tiberius - Your lightning rod of hate!
March 26th, 2012
9:10 am
“Ryan is influenced by the lobby of ALEC, which has written the laws for our congress and states for years now.”
Wow! A legislator influenced by a lobby! Never would have guessed THAT!
Do you have the same angst regarding unions having bought and paid for the Democrat party, Callista scares me?
HDB
March 26th, 2012
9:47 am
The problem I see with Ryan’s budget is that it desires to take FROM those who can afford it LEAST, stymies the possibilites of growth, shreds the safety net, and creates a more Darwinian society. If you cut education, infrastructure and healthcare (Medicare/Medicaid/Social Security) and pander to the wealthy by giving them a tax cut, no one prospers.
What, IMHO, needs to be done is a two-year freeze of the federal budget and a cost/benefit analysis done by the CBO to see where the budget can be effectively cut, where revenue increases are needed, and enact the same. Yes, the federal budget needs to be trimmed…but sacrificing the poor so that they wealthy gain isn’t what this nation is about!!!
Tiberius - Your lightning rod of hate!
March 26th, 2012
10:08 am
“The problem I see with Ryan’s budget is that it desires to take FROM those who can afford it LEAST, stymies the possibilites of growth, shreds the safety net, and creates a more Darwinian society. If you cut education, infrastructure and healthcare (Medicare/Medicaid/Social Security) and pander to the wealthy by giving them a tax cut, no one prospers.”
HDB, try reading Ryan’s proposal, rather than relying on the DNC talking points about it.
“and creates a more Darwinian society.”
Who would have a thought it; a liberal who doesn’t believe in science . . .
lefty_316
March 26th, 2012
10:14 am
Lil’ Barry thank you for calling my Christianity into doubt. That was very well done on your part.
The Supremes will start hearing the healthcare case today. I’m ambivalent about the indivdual mandate but strongly oppose the addition of 11 million Americans to the Medicaid rolls. That is not the direction we need to go as a country, entitlement programs have to be cut. One of these days Congress is going to have to grow a spine and take on Social Security and Medicare.
The heathcare bill has been a spotlight hog as well. Dodd-Frank, which was a truly awful piece of legislation, did not get its deserved attention. All it would have taken was two quick steps to assure a housing collapse does not happen again: 1) require any potential home buyer to put down 15% of the purchase price upon signing and 2) require the lending institution to maintain ownership of at least 25% of the loan for the duration. But instead Congress came up with this convoluted piece of garbage that does nothing to prevent a repeat of the housing crash and also put a big hurt on small banks, regardless of how conservative those banks loan portfolios may have been.
Of course it would be naive to think the banks didn’t send their lobbyist to Washington with large checks to be used as “campaign contributions” to the members of the Frank-Dodd committee, regardless of political stripes. I recall last fall, after the AT&T merger with T-Mobile was rejected, AT&T put out a statement on the situation the following day. In the statement they disclosed that they had made over $900,000 in “campaign contributions” in an effort to get the merger through. And therein lies the root of the problem.
Jefferson
March 26th, 2012
10:17 am
Ryan’s plan will not go anywhere.
HDB
March 26th, 2012
10:44 am
Tiberius – Your lightning rod of hate!
March 26th, 2012
10:08 am
I DID read it…twice!! By making Medicare a voucher program, it’ll effectively eliminate it…thereby shredding the safety net….
….and I do believe in science…Darwin’s theories of evolution were required reading for me when I took biology in school…..
HDB
March 26th, 2012
10:47 am
Tiberius…..and from Ryan’s plan:
•Provides transparency in health care price and quality data, making this critical information readily available before someone needs health services.
•Creates state-based health care exchanges, so individuals and families have a one-stop marketplace to purchase affordable health insurance without being discriminated against based on pre-existing conditions.
•Equips states with tools like auto-enrollment programs and high-risk pools, so affordable health coverage can be accessed by all.
……sounds like what OBAMACARE is………
HDB
March 26th, 2012
10:52 am
….and for those who thinks Ryan’s plan is fiscally sane:
…from the plan itself:
•It preserves the existing Medicare program for those currently enrolled or becoming eligible in the next 10 years (those 55 and older today) – So Americans can receive the benefits they planned for throughout their working lives. For those currently under 55 – as they become Medicare-eligible – it creates a Medicare payment, initially averaging $11,000, to be used to purchase a Medicare certified plan. The payment is adjusted to reflect medical inflation, and pegged to income, with low-income individuals receiving greater support. The plan also provides risk adjustment, so those with greater medical needs receive a higher payment.
Question: where is someone 55 or over going to be able to purchase health insurance for $11,000 that covers what will be required for an aging population?? This will place all but the wealthy into bankruptcy…particularly those suffering from Alzheimers’. The preponderance of assisted living centers cost over $4K/monthly….and forces the divestiture of assets to cover said illness….therefore, no estate can be passed to heirs…….
Tiberius - Your lightning rod of hate!
March 26th, 2012
10:56 am
So I guess you believe that government can circumvent the laws of nature by providing a less Darwinian society, HDB? Should government be THAT powerful that natural law is overturned?
And Ryan’s plan does EXACTLY what Obamacare does, just gets the management out of Washington, D.C. and closer to the PATIENT! Wouldn’t want THAT, would we?
Tiberius - Your lightning rod of hate!
March 26th, 2012
10:58 am
“and forces the divestiture of assets to cover said illness….therefore, no estate can be passed to heirs…….”
So government should be installed to protect people’s estates, HDB? Is THAT a proper role of government? Why shouldn’t a person’s estate be used to take care of them while they’re alive, rather than have the rest of us foot their bill so that their heirs may enjoy the fruits of both OUR and their parent’s labors?
Jefferson
March 26th, 2012
11:11 am
Let the tax cuts expire and cut defense spending until the buget is balance — how’s that for a plan that will get as far as Ryan’s.
Hillbilly D
March 26th, 2012
11:20 am
The preponderance of assisted living centers cost over $4K/monthly…
A good point to bring up. Part of the problem here is modern society. In the old days, the younger generations took care of the ones who came before them. When somebody got old, they moved in with one of the kids or grandkids, a sibling, etc. People looked after their own. In today’s world, people usually just have a kid or two, who are scattered out who knows where. So they can’t look after theirself and nobody cares enough to look after them, so they have to be warehoused, somewhere, at great expense. Not the way it should be, in my opinion, but that’s the way it is. What’s the solution? In today’s selfish world, I’m afraid there isn’t one.
Dusty
March 26th, 2012
11:45 am
Tiberius,
Of course it makes sense that someone’s money should pay for their last illness with the government staying out of the handling. . Is there no way to keep government out of an individual’s private life? Can Americans no longer die in peace knowing that what little or more is left in their estate can be the gift for their children?
ObamaCare makes us one step closer to a life controlled by government. Not protected by government but controlled like puppets.
What happened to so many who at one time loved liberty like they loved their lives? The “leech” has replaced the lover of liberty.
—————-
So much for that, but I had to laugh. I dropped by Bookman’s just for a look and Ragnar was there giving the “regulars” a rigorous “hard time”. He had them blubbering and crying and Bookman even trying to run Ragnar down. But it did not work Ragnar is far too smarl for them. Quite a fun read if I do say so. ( I don’t read there very much. Makes me too mean!)
Bernie
March 26th, 2012
12:11 pm
Kyle, there you are again supporting a losing cause. The Ryan Plan has already been rejected one time already and considered a non starter. Why the Republicans and the Tea Party supporters decided bring this PIG out for a second showing mystifies reasonable intelligence. The Ryan plan is a PIG. No matter what make-up or the color of lipstick that is used its still a PIG. The Republican Party and Tea Party members are the REAL THREAT to America and all of its citizens.
Tiberius - Your lightning rod of hate!
March 26th, 2012
12:15 pm
Ahhh, the hyperbolic argument by Bernie, always followed up with sharp, precise analysis and explanation as to why Bernie thinks that way . . . wait – what’s missing from this? Oh, yeah! The sharp and precise analysis and explanation part!
Linda
March 26th, 2012
12:35 pm
lefty-316@11:38, I don’t want a dime of my tax dollars going to an organization founded by a eugenist with the purpose of wiping out the back race. There are thousands of charities who help the less fortunate who are not in the abortion business. Ask Texas.
What the Bible teaches is to help the needy & to give Caesar his due. What the Bible does not say is to give the needy’s money to the fed. govt. & let it hire expensive bureaucrats, create red tape & choose winners & losers.
@1:16, When I referred to the ABC media, I was not referring to ABC News, but rather the entire corrupt alphabet media.
http://www.dianedew.com/sanger.htm
HDB
March 26th, 2012
1:05 pm
Tiberius – Your lightning rod of hate!
March 26th, 2012
10:56 am
If Ryan’s plan is exactly the same as Obamacare…then what’s the issue?? Washington wants the states to set up the exchange…that shifts management to a lower level….and that’s what everyone wants!! The rich already have the government to protect THEIR assets….via the tax code…so why shouldn’t EVERYONE have the same benefits as those of means?? I’d like to be able to pass my estate on to my heirs just as the Rockefellers/Mellons have done……
Hillbilly D
March 26th, 2012
11:20 am
In certain situations…like mine….it wasn’t that I didn’t try to take care of my elderly parent, I didn’t have any expertise as to how to care for an Alzheimers’ patient…and as the only child, I needed professional assistance. In that case, assisted living was the only option….and at over $4K/monthly, it could’ve been a drain if not for my mother’s pension and Social Security!! For those who persist in stating that Social Security needs trimming….imagine yourself in that predicament….and that one resource could mean the difference……
Just saying..
March 26th, 2012
4:46 pm
Whine: “Anyone who says the Republican presidential nomination is over hasn’t looked at the remaining schedule of primaries-”
Geez, I hope you’re right.
Just saying..
March 26th, 2012
4:58 pm
Kyle-
This is ONE crowd of self-starters. Just throw some red meat out every three days, and you’re good.
independent thinker
March 28th, 2012
4:32 pm
And which GOP president passed free Medicare for the elderly with no funding source? and which president started two wars that have yet to end costing over a trillion dollars with no funding source? and which GOP president wrote the EPA into law? And which GOP president signed an unfunded mandate requiring free medical care at every emergency room which drives the cost up for everyone on hospital care? Of course all this is now Obama’s fault.