The ball is now in Paul Ryan’s court to produce a dramatic, shock therapy budget. The grassroots are expecting nothing less.
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If there is backroom resistance from the old bulls, the time has come to out them. Ryan needs to take chances. Propose the right budget. If the Republicans don’t follow, then the devil take the hindmost.
The House Republican majority doesn’t need the Senate. It can adopt its own budget. Let Harry Reid stew in his simple-minded confusion. The House Republicans can make their budget stick, if they stick to it in Appropriations bills, and refuse to move off. If they don’t agree to spend, then it doesn’t get spent.
Will Obama force a government shutdown? The Democrat party-controlled media has sold a false story of the Gingrich-Clinton budget battle and shutdown. Gingrich won the substance of that battle. That is where the late 1990s massive budget surpluses came from. Clinton appeared to have won the politics only because Dole was 20 years stale by 1996.
I say shut the whole thing down for two years if we have to, and let’s get on with the 2012 presidential election. Put everything on autopilot except national defense. Freeze EPA, by nullifying its budget for two years if necessary. The politics of today is worlds apart even from the 1990s. Ryan and the Republicans would be grassroots heroes if they did this, and Obama and the Democrats would be revealed as budget busting frauds. My guess is if Ryan and the Republicans stuck to their guns, Obama and the Democrats would cave. If not, so be it. Take it to the voters, and ask America if it really wants to be Greece.
Obama’s Debt Commission v. The Ryan Roadmap
The one positive turn for President Obama is that his debt Commission raised the issue of tax reform, with sharply lower rates. One idea put on the table is an income tax code with just three rates of 8%, 14% and 23%, a better rate structure even than Reagan’s 1986 tax reform with two rates of 15% and 28%. The Debt Commission even raised a possible corporate tax reform with a 26% rate.
I expect President Obama to embrace this intriguing opportunity. That would be good for him, politically and economically, but not good enough, in contrast with the Ryan Roadmap. The Debt Commission tax reform is still a trillion dollar tax increase. It would raise taxes to the highest levels in American history at 21% of GDP, nearly a fifth above the long-run historical average. For all of its talk of spending cuts, the commission actually proposes only $1 in spending reductions for every $2 in tax increases, as reported by the Wall Street Journal on December 3. Under its proposals, the federal budget would still soar to $5 trillion by 2020.
Moreover, all of this fails to take into account realistic estimates of the cost of Obamacare, which will likely soar to two or more times its projected costs, as explained in detail in my Heartland Institute study, The Obamacare Disaster: An Appraisal of the Patient Protection and Affordable Care Act. President Obama’s Debt Commission, of course, keeps Obamacare intact, adopting or sharply expanding three entitlement programs.
The Ryan Roadmap includes its own tax reform. After a generous standard deduction of $25,000 for couples and $12,500 for singles, and additional personal exemptions of $3,500 per family member, the tax rate would be 10% for additional income up to $100,000 for couples, $50,000 for singles. A rate of 25% would apply to income after that. Businesses would pay a consumption tax (controversial among conservatives) at a rate of 8.5%, raising as much revenue as today’s corporate tax with its internationally uncompetitive 35% rate.
Moreover, CBO scores the Roadmap as permanently balancing the federal budget at the long-run historical average for federal taxes and spending at 18.6% of GDP, which means the budget will be balanced with no tax increase. The Roadmap would also:
• Achieve full, permanent solvency for Social Security, as scored by CBO.
• Achieve full, permanent solvency for Medicare, as scored by CBO.
• Provide a comprehensive health care safety net for the poor and uninsured that would replace Obamacare at tremendous long-term savings.
• Reduce the national debt by 2060 by 82% from where it would be on our current course.
With sharply lower tax rates, federal spending, and national debt, CBO projects that under the policies of the Roadmap, per capita GDP by 2058 would be nearly 70% higher than under current law. That is an enormous prosperity bonus for the American people.
A man of faith in a godless age is hitting Americans where it hurts.
Mr. and Mrs. American Spectator Reader, let P.J. O’Rourke talk sense to your kids.
In Britain, defending your property can get you life.
The debacle of this president’s administration is both a cause and a symptom of the decline of American values. Unless Congress impeaches him, that decline will go on unchecked. An eminent jurist surveys the damage and assesses the chances for the recovery of our culture.
It won’t take long for conservatives to scratch this presidential wannabe off their 2008 scorecard.
The American Christmas, like the songs that celebrate it, makes room for everybody under the rainbow. Is that why so many people seem to be hostile to it?
Was the President done in by the economy, or by the politics of the economy?