Paul Ryan's bud­get won't help Repub­li­cans win

The Pak Banker - - OPINION - Ramesh Ponnuru

SOME of Paul Ryan's big­gest fans are dis­ap­pointed in his lat­est bud­get. Take New York Times colum­nist Ross Douthat. He cred­its Ryan, the Repub­li­can House Bud­get Com­mit­tee chair­man, for try­ing to give Medi­care re­cip­i­ents the power and the in­cen­tive to make health spend­ing more ef­fi­cient, and get­ting his party to take up this re­form. He also cred­its Ryan for re­vis­ing his Medi­care plan be­tween 2011 and 2012 to re­spond to the smartest crit­i­cisms. But Douthat says that the 2013 ver­sion of the bud­get is "a step back­ward" - - and I'm in­clined to agree.

My own list of the pros and cons is slightly dif­fer­ent from Douthat's. I would have pre­ferred that Repub­li­cans rein in the growth of So­cial Se­cu­rity, es­pe­cially for peo­ple with high life­time earn­ings. That way younger and poorer Amer­i­cans would have to bear less of the bur­den of bud­getary re­straint. For the same rea­son, the bud­get should find sav­ings from Medi­care faster. Ryan's 2011 plan would have cre­ated a com­pet­i­tive struc­ture only for peo­ple younger than 55. Now that he's ad­vanc­ing a ver­sion of Medi­care re­form with fewer risks for se­niors, that slow phase-in makes less sense. And the plan should raise co-pays, es­pe­cially for the af­flu­ent, which would also lighten the bur­den on younger peo­ple.

A bud­get that re­duced spend­ing on those older than 55 would make it pos­si­ble to bring the government's long-term debt to a man­age­able level while al­low­ing for a higher (and more real­is­tic) level of Med­i­caid spend­ing than the Ryan bud­get in­cludes.

The House Repub­li­cans should have been bolder on health care, too. Their new bud­get en­vi­sions the re­peal of Pres­i­dent Barack Obama's health-care law but out­lines no re­place­ment for it, which is rather odd for a doc­u­ment that pur­ports to pro­vide a Repub­li­can vi­sion for the fu­ture of the wel­fare state.

The Ryan bud­get keeps the level of rev­enue that re­sulted from the tax in­creases that came at the start of the year, but it aims to raise that rev­enue with a new tax code that features a top rate of 25 per­cent. A 25 per­cent rate would mean a big tax cut for the high­est earn­ers in the coun­try: Some­one who makes $1 mil­lion a year isn't go­ing to have enough tax breaks to make up for a 14.6 per­cent­age-point re­duc­tion in rates.

The mid­dle class would al­most cer­tainly have to pay higher av­er­age tax rates to make the num­bers work. A sim­i­lar plan seems to have been a se­ri­ous po­lit­i­cal li­a­bil­ity for Mitt Rom­ney in last fall's pres­i­den­tial elec­tion.

And it is a lit­tle strange for the Repub­li­cans to leave the re­cent tax in­creases in place. Some House Repub­li­cans voted to limit the tax in­creases that were tak­ing place, and some voted against any deal to reg­is­ter their op­po­si­tion to any in­crease.

None of them fa­vored the new taxes. So why aren't they call­ing for a roll­back? Be­cause it's a dead is­sue? It's no deader than the prom­ise to re­peal the health-care law, a prom­ise they re­newed.

Or is it be­cause it helps them reach their new goal of balancing the bud­get in 10 years? Just a few months ago, though, Repub­li­cans didn't think higher taxes for a smaller deficit was a good trade.

What­ever their rea­sons, the 10year dead­line is the real in­no­va­tion in the 2013 bud­get. Yet there's no par­tic­u­lar rea­son to think elim­i­nat­ing the fis­cal short­fall in 10 years is an ur­gent goal. The coun­try isn't go­ing to look ap­pre­cia­bly dif­fer­ent if it takes 15 years, or if we shrink deficits to a mod­est size and keep run­ning them.

I sus­pect that Ryan him­self shares some of th­ese re­grets about his bud­get. He has spon­sored leg­is­la­tion to re­form So­cial Se­cu­rity and health care in the past, but he did so on his own and not in the name of House Repub­li­cans. He has al­ways been more in­ter­ested in struc­tural re­form of the fed­eral government than in end­ing deficits.

An­other thing I sus­pect Ryan ap­pre­ci­ates is that dif­fer­ent bud­get choices would have come at a po­lit­i­cal cost. Hit­ting zero in 10 years was a way to get House con­ser­va­tives to ac­cept a bud­get strat­egy that didn't in­volve a debt-ceil­ing show­down in Fe­bru­ary. A lot of con­ser­va­tives would have com­plained if he had aban­doned the 25 per­cent tax rate, too.

Democrats would cer­tainly have said the Repub­li­cans had be­come "even more ex­treme" if they had lim­ited spend­ing on those over 55, and House Repub­li­cans -in­clud­ing some of the con­serva- tives who say Ryan is be­ing too soft -- would have got­ten very ner­vous about pub­lic opin­ion.

Still, the risks would have been worth tak­ing. The choices that Ryan made have kept Repub­li­cans uni­fied but also re­in­forced the im­pres­sion that they are too at­tuned to the in­ter­ests of the rich, and more con­cerned with their own ob­ses­sions than what the pub­lic wants. House Repub­li­cans are in dan­ger of be­com­ing like the House Democrats of the early 1980s: se­cure and com­fort­able in their power base, and not ori­ented to­ward achiev­ing a gov­ern­ing ma­jor­ity.

Newspapers in English

Newspapers from Pakistan

© PressReader. All rights reserved.