Our non existent budget plan is much better than the one you put in writing Once again Oscum - but has no clothes
It is therefore no surprise that the president used what was nominally a budget address — before an unabashedly friendly audience of Associated Press editors and writers on Tuesday — instead as a campaign speech. When by your own lights you have no plan on offer to prevent a predictable and potentially catastrophic debt, it is best to try to render your political opponents as granny-gutting demons and their budget as a kind of occult document.
Thus we have a president accusing the Republican party of building a “Trojan horse” to “impose a radical vision” on the country that is “antithetical to our entire history as a land of opportunity and upward mobility.” Glossing cuts to the growth rate of discretionary spending as “draconian” measures in a program of “Social Darwinism” instead of setting GDP-percentage spending levels within 50-year norms. Painting a lengthy portrait of the 2000s as a supply-sider’s utopia in the throes of an orgy of deregulation and “trickle-down economics” to which the GOP would hasten our return. Repeating the canard about “end[ing] Medicare as we know it.” Detailing the long and tenuous causal chain between marginal budget cuts to the National Weather Service and the specter of Americans being trapped in a deadly hurricane, or between the devolution of Medicaid to the states and the forced deprivation of children with Down’s Syndrome.
As the president himself said in his remarks, “This is not an exaggeration. Check it out yourself. . . . These are facts.”
Here is another fact. The president’s budgets, with their record-setting deficits and shameful silence on the entitlement crisis, have been voted against by 511 of the 535 elected members of Congress over the last calendar year. They have garnered zero votes in their favor. Not a Nancy Pelosi or a Debbie Wasserman-Schultz. Not one Harry Reid or Dick Durbin. His heralded “balanced approach” is in fact a cocktail of non-starters: spending cuts his base won’t abide and nobody else trusts in exchange for tax hikes like the ones that snookered Reagan, all admixed with a heavy dose of central planning for seniors and served with a twist of accounting gimmickry.
By contrast, the Ryan budget is the product not of a rump on the “radical” right but of a consensus in conservatism’s vital center. It attempts — we believe with a fair degree of success — to thread the needle between what the times require and what the politics allows. It is not a perfect document. But contra the president, the fact that it has been challenged by congressional Republicans to both its right and its left, criticized for both going to far and doing too little, is indicative not of a party trapped by ideology, but of one engaged in a serious conversation about how to solve our most pressing problems. That the president’s DOA budget has been challenged by a fantasyland proposal from the House progressive caucus (it doubles down on the president’s tax hikes and includes a public option for health care), and that there has been no budget at all from Senate Democrats is also indicative.
And so we end up after the president’s speech in precisely the same place we were before it. The president still doesn’t have a plan. And he still doesn’t like ours.
In April 2011, President Obama went to George Washington University and delivered a highly publicized and very political attack
on the budget plan put together by House Budget Committee Chairman Paul
Ryan. In that speech, the president called the Ryan plan, and
especially its Medicare-reform component, an unconscionable attack on
the elderly. He also accused it of being, effectively, un-American.
Fast-forward to April 2012. Congressman Ryan has again assembled a budget plan to head off national insolvency.
He has again rallied his colleagues to take up this budget blueprint
and pass it through the full House, despite the political risks
associated with doing so. And, like night following day, the president
has again delivered an incredibly partisan attack on the House’s
handiwork, denouncing it with some of the most over-the-top political
rhetoric ever heard in a presidential address.
In that regard, yesterday’s “address” was very similar to last year’s
highly political budget speech. It was sort of like a movie sequel,
trying to capture that same partisan magic that fired up his electoral
base a year ago. Unfortunately for the president, his speech today was
about as imaginative and interesting as most big-budget movie sequels.
He called the budget plan adopted by the House last week a “radical
vision” that would undo the nation’s social contract by penalizing the
poor and favoring the rich. And he again supported an alternative vision
for fiscal policy, based on what he calls a “balanced plan” for deficit
reduction — meaning a plan that raises taxes to cover higher
governmental spending commitments.
At the bottom of this budget standoff is a fundamental difference of
views on what is causing our fiscal crisis in the first place, both
today and in the future.
The president and his allies continue to cling to the false narrative
that the reason we are experiencing budget deficits is because of tax
cuts and unfinanced wars. This is a completely distorted view of
As shown in the following chart, the real source of today’s deficits
and debt, and the source of our national insolvency if it is not
addressed soon, is runaway entitlement spending. Taxes have gone up and
down over the past four decades, but have always hovered around 18
percent of GDP. Meanwhile, back in 1972, spending on the three largest
entitlement programs — Social Security, Medicare, and Medicaid — was
just 4.4 percent of GDP. Today, spending on those three programs is just
over 10 percent of GDP. That’s a 6 percentage point jump above what it
was 40 years ago — an increase that is more than the size of the entire
Defense Department today. Worse, spending on the “big three” is headed
toward 16 percent of GDP in 2035, according to the Congressional Budget
Office (CBO). If that were allowed to happen, there would be virtually
no room left in the budget for anything else, assuming the historical
rate of federal revenue collection.
And what does the president propose to do about this problem? Exactly nothing.
His plan for deficit reduction can be summed up briefly: tax hikes and defense cuts.
According to CBO, the federal budget deficit
under the president’s plan in 2022 would be about 3 percent of GDP,
down from about 8.1 percent in 2012. What is the source of that deficit
reduction? First, the president’s plan would bump federal revenue up
from its historical average of 18 percent of GDP to 19.8 percent in
2022. Further, according to the president’s own numbers, spending on
security-related items in the budget would plummet from about 5.6
percent of GDP today to about 3.4 percent of GDP in 2022. So, between
tax hikes and defense cuts, that’s 4 percent of GDP in supposed deficit
reduction. The rest would come from projected improvement in the
economy. There’s no real spending discipline at all beyond the deep
defense cuts. In fact, CBO estimates that outlays under the president’s
budget will still be nearly 23 percent of GDP in 2022, well above the
historical norm of about 20 percent — and that assumes an unprecedented
era of international tranquility.
The president was right about one thing today: The House budget plan
is built on a very different vision for our country. Voters should be
grateful for that.
But, contrary to what the president said yesterday, the House budget plan is not a tax giveaway for the rich. CBO expects
current tax policy — including all of the tax provisions enacted in
2001 and 2003 and extended through 2012 — to produce about 18 percent of
GDP in total federal revenue over the coming decade (these projections
are under what the agency calls the “alternative fiscal scenario”). In
other words, if Congress were to extend current tax policy for another
decade, total federal revenue collection would be where it has been for
the better part of a half century.
That’s essentially the level of revenues the Ryan budget plan would
collect. It’s not a giveaway to the rich. It’s not even really a tax cut
at all. It’s a plan to reform federal income and corporate taxes to
broaden the bases, lower the top rates, and promote growth while
providing a responsible level of revenue for the federal government.
On taxes, the Ryan budget is very much in line with other bipartisan
plans developed over the past couple of years to reduce deficits. For
instance, the Bowles-Simpson plan and the plan developed by the Bipartisan Policy Center
both included tax-reform proposals to lower the top individual
income-tax rate below today’s current 35 percent bracket. The outlier in
this regard is President Obama, not Chairman Ryan. The president’s plan
is the only major proposal on the table today that would go in the
other direction and push the top individual income-tax rate up — to around 40 percent — rather than down.
On spending, the Ryan budget does what the president refuses to do: provide leadership on entitlement reform. On Medicare, the plan would move toward a premium-support model that independent estimates
show could reduce Medicare spending by 5 percent right away by making
the program more efficient. The president’s alternative is to cap the
program with price controls and thus to ration care.
Most of today’s presidential speech was devoted to claiming that the
Ryan budget plan makes cuts that simply aren’t there. The president and
his aides pretended that the Ryan plan applied across-the-board
reductions to all domestic programs. But that’s not what the Ryan budget
would do. It caps spending for sure, but it emphasizes over and over
that cuts would come from programs that aren’t working, streamlining the
bloated federal bureaucracy, and giving states much more power to take
the next steps in welfare reform.
The president and his team complain regularly that they are unfairly
blamed for doing nothing to address the massive debt explosion that has
occurred during the Obama years. Really? Every time there’s a serious
proposal from conservatives to actually solve the problem, the president views
it as an opportunity to score cheap political points. That’s the reason
for fiscal gridlock, and it’s something voters should hold him
accountable for in November.
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