COMMENT & ANALYSIS
If conservatives ran Washington Paul Ryan revises his blueprint for economic recovery
House Budget Committee Chairman Paul Ryan returned to the stage on Tuesday to call for more entitlement reform, spending restraint and lower tax rates. It’s a message this country needs to hear. Assured of support from all the Republican presidential candidates, his budget is essentially the party’s platform as it seeks to retake control of the White House and Senate in November.
Mr. Ryan’s proposal spends $19 billion less in discretionary funds than the top limit for 2013 under the Budget Control Act — an important nod to House conservatives who otherwise might have opposed the budget. Senate Democrats oppose spending less than every dime allowed under last year’s debt-ceiling deal. Congressional insiders already are worried that House Republicans have set up a politically sensitive situation in which the caucus will vote on limits now, only to be forced to support an end-of-the-year omnibus that spends more than their own budget. In addition, the House will work this spring to find further cuts to take into account the $97 billion that will be sequestered automatically in January to pay for the higher debt ceiling.
Despite being pummeled by the Mediscare ads from Democrats, Mr. Ryan did not back away from tackling the health care program for seniors that has become the biggest driver of debt. “If we allow entitlement politics, fear that your adversaries will turn your reforms into a political weapon used against you, and we cow to that, then America is going to have a debt crisis,” Mr. Ryan told reporters on Tuesday. This year’s plan has been tweaked to blunt the worst of the fear tactics. The proposal maintains the existing pay-for-service plan as an option for seniors who choose not to take advantage of premium-support, private-sector choices. Mr. Ryan’s budget also would repeal Obamacare, saving some of the expense of Medicare and hundreds of billions overall.
The proposal doubles down by curbing other out-of-control entitlements. These include blockgranting Medicaid and other means-testing program funds to the states; raising government employees’ contributions to their pensions; reforming welfare by capping spending and eliminating overlapping programs; and putting a work requirement and time limit on programs such as food stamps.
On the revenue side, Mr. Ryan proposes for the first time a pro-growth individual tax reform plan. It would replace the existing six tax brackets with a 10 percent and 25 percent bracket. He asks the Ways and Means Committee to close loopholes and other breaks so that the whole package will be simpler, but revenue neutral. Easing compliance burdens will give the economy a boost.
Unfortunately, Mr. Ryan’s plan does not reach balance for almost 30 years, whereas the Cut, Cap and Balance budget from the Republican Study Committee evens the ledgers in 10. However, Mr. Ryan said his budget actually would balance in a decade, but he has to use faulty projections from the Congressional Budget Office that assume tax increases in 2013 will make the economy tank.
Mr. Ryan’s get-out-of-debt strategy sets up a clear choice for voters. President Obama and Senate Democrats refuse to produce a budget. Republicans have a viable road map that will end the culture of borrow-and-spend. Those who want actual change will know which lever to pull on Nov. 6.