The liberal crowd asked for it. Now they can’t deal with it.
Before Paul Ryan’s 2012 budget released yesterday, the Liberal Establishment was telling us that what was needed was an adult conversation on the budget and entitlements. Now that they have got their adult conversation, they can’t handle it.
The Washington Post’s E.J. Dionne began the brain-dead name calling, labeling the Ryan budget “radical,” “irresponsible,” and “extreme.” This began the Post’s shameful institutional policy of not reporting to its readers what the Ryan budget actually does, as compared to President Obama’s budget, which I will show by the numbers below is actually what is radical, irresponsible, and extreme. The Post’s institutional policy is to mislead its readers on the issue, in service to Democrat party politics.
Ryan’s budget is actually careful and restrained, making sure that no one who is vulnerable is hurt by the undeniably necessary changes he proposes on behalf of the majority House Republican Conference. His budget carefully begins the process of fundamental entitlement reform, exempting anyone in or near retirement from any change at all, and adopting proven reforms that would actually benefit the poor, as I show below. Again, that is in sharp contrast to Obama’s budget, which irresponsibly ducks any entitlement changes at all.
Three months ago in this space, I explained that the new big picture was now Ryan v. Obama. Ryan’s 2012 budget released yesterday shows what I meant. The battle over the 2011 budget, which last year’s Democrat-controlled Congress never provided for, has distracted from this real, big picture, with the Republicans trying to make marginal cuts to that 2011 spending with the fiscal year now more than half over. The government remains unfunded for the rest of this year because the Democrat-controlled Senate has never gotten around to providing for it at all. The House Republicans, and only the House Republicans, by contrast have passed numerous continuing resolutions funding the government for the rest of the year. Harry Reid and his Senate Democrats need to show up to work and do their job, or resign and let someone else do it.
But Reid and Obama are convinced that their base at least and enough of the public is stupid and will be easily misled by their party-controlled media allies into blaming the Republicans for any shutdown that occurs. So they seem to want to cause a shutdown over 2011, all the more to distract the public from Ryan’s blockbuster Tea Party budget for 2012.
Real, Powerful Spending Cuts
Ryan fully delivers on the campaign promise of Republicans to cut federal spending, cutting the spending President Obama proposes in his disgracefully inadequate budget by $6.2 trillion over the first 10 years alone. In contrast, President Obama’s budget actually proposes to increase runaway federal spending by $400 billion over the old CBO current policy baseline. President Obama has actually already increased federal spending by 28% compared to 2008, to $3.819 trillion this year from $2.983 trillion in 2008, after promising repeatedly in the 2008 election that he would adopt a “net spending cut.” He then proposes in his 2012 budget to increase federal spending by another 57% to $5.756 trillion by 2021 according to CBO. That’s not radical, irresponsible and extreme? Ryan’s budget would spend a trillion dollars less in 2021 alone.
Ryan’s budget would reduce domestic federal spending to below 2008 levels, restoring pre-stimulus, pre-bailout spending, again as promised. Federal spending is reduced to below 20% of GDP, the long-run, postwar, historical level, by 2015. With that level of federal spending prevailing on average for 60 years since World War II, to call it radical, irresponsible, and extreme is itself unprofessionally irresponsible and misleading.
To achieve that, Ryan’s budget would defund and repeal Obamacare. It would eliminate hundreds of duplicative programs, and slash corporate welfare. That would include President Obama’s “expensive handouts for uncompetitive sources of energy,” establishing instead “a free and open marketplace for energy development, innovation and exploration,” as Ryan explained in yesterday’s Wall Street Journal. Ryan also explained that his budget “gets rid of the permanent Wall Street bailout authority that Congress created last year,” in President Obama’s Dodd-Frank so-called financial regulatory reform bill.
Ryan’s budget reduces the federal deficit to below $1 trillion by next year, while President Obama proposes his fourth year of federal deficits over $1 trillion, at $1.2 trillion according to CBO. CBO projects that under Obama’s proposed 2012 budget, the federal deficit is still $1.2 trillion by 2021. That’s not radical, irresponsible and extreme? Ryan’s deficit by that year is $385 billion, after achieving what is called primary balance by 2015, meaning that the budget is balanced apart from interest on the national debt.
Ryan’s budget achieves full, permanent balance soon thereafter, with federal spending reduced to 15% of GDP by 2050, less than half the level of federal spending by that year under President Obama’s budget. Indeed, by 2050, President Obama’s budget would double federal spending as a percentage of GDP from the long-run, postwar, historical average, which is disgracefully radical, irresponsible and extreme.
Ryan’s budget reduces the national debt by nearly $5 trillion relative to the President’s budget in the first 10 years alone. As result, the national debt as percent of GDP is reduced every year, until the national debt is ultimately paid off entirely! President Obama’s budget, by contrast, would double the national debt in his first term alone, and triple it by 2021. That’s not radical, irresponsible, and extreme?
Fair and Competitive Tax Reform
The Ryan budget also begins the process of tax reform, restoring the federal tax burden to 18% of GDP, again the long-run, historical, postwar average. This would be achieved by reducing the top income tax rate to 25% for those earning over $100,000 a year, and 10% for those below that, in return for eliminating what Ryan calls a burdensome tangle of deductions, credits and other loopholes.
Ryan proposes the same on the corporate side as well, reducing the federal corporate rate to 25%, in return for eliminating the loopholes that allowed a megacorporation like GE to earn $14 billion in profits last year while paying no taxes. This responsibly restores some competitiveness to American business, which will soon otherwise bear the highest corporate tax rates in the industrialized world. Counting state corporate taxes, American businesses bear a corporate tax rate of nearly 40%, while the average corporate tax rate in the European Union has been reduced from 38% to 24% over the last 10 years. Yet, President Obama irresponsibly proposes to do exactly nothing about restoring American competitiveness. No wonder that under President Obama America has suffered the worst economic recovery since World War II.
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