Posted by: bkivey | 13 March 2013

Paul Ryan’s Budget Proposal

Wisconsin Congressman and Chair of the House Budget Committee recently released a Federal budget proposal that would balance the Federal budget by 2023.  Mr. Ryan says that his motivation for presenting this budget is the precarious state of US Federal finances, and his budget takes a cleaver to most entitlement programs and discretionary spending. The budget also projects reduced interest payments as a result of decreased borrowing. Social Security and Defense, a combined 41% of the Federal budget in FY2012, remain largely unaffected. The reactions by the opposition party have been hackneyed and predictable.  From Senate Majority Leader Harry Reed (D-NV):

“The Ryan Republican budget will call for more tax breaks for the wealthy and an end to Medicare as we know it, and draconian cuts to education and other programs to help America’s economy grow and prosper,”

Mr. Reed may want to note that ‘Medicare as we know it’, and other entitlement programs, are bankrupting the country. It’s interesting to note that the last phrase in his quote can be construed as support of  Mr. Ryan’s budget.

Sen. Patty Murray (D-WA) weighed in with:

“While House Republicans are doubling down on the extreme budget that the American people already rejected, Senate Democrats are going to be working on a responsible pro-growth budget that reflects the values and priorities of middle class families across the country,”

That’s a meaningless statement, and would that be the budget the Senate is required by law to deliver, but has failed to do so for four years?

White House spokesman Jay Carney:

“While the House Republican budget aims to reduce the deficit, the math just doesn’t add up. Deficit reduction that asks nothing from the wealthiest Americans has serious consequences for the middle class.”

This is the same White House that has had  every one of the President’s budgets rejected. The budgets coming out of the Oval Office are so unpopular, no Democrat has ever voted for one.

Whatever the specifics of the GOP budget proposal, it achieves much of it’s savings by cutting Federal spending growth 30%, from 5% annually to 3.4%. The key is that Mr. Ryan expects the GDP to grow faster than the Federal budget increase. The record provides no such grounds for that projection, as we can see from charting GDP growth over the last decade:


The trendline shows the GDP growth rate declining, in large part from the contraction between 2008 and 2010. Even so, the last two years have shown considerably less than the 3.5%+ growth the Ryan budget requires. I’m not alone in thinking that when Obamacare fully implements in 2014, GDP growth is going to take a nosedive, as individuals and families find themselves on the hook for thousands of dollars in health care expenses or penalties they aren’t spending now.

So it’s unlikely that even if the Ryan budget were enacted in its entirety, we’d find ourselves with a balanced Federal budget in a decade. But Mr. Ryan has at least proposed something, which is more than Senate Democrats can claim. And it would be helpful if someone disabused those same august individuals of the notion that bitching and moaning about someone else’s efforts demonstrate leadership and competence. It doesn’t. The people disparaging this effort are once again exposing themselves as the petty, arrogant, incompetent oxygen thieves they’ve always been. Better they should realize that as a nation we’re in a lot of trouble, and re-election be damned, they need to step up and put national interests over personal ones.



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