Paul Ryan's "Path to Prosperity" Stakes GOP Claim to Fiscal Responsibility

Townhall.com ^ | April 9, 2011 | Kevin Grass

[Kaslin]

Representative Paul Ryan (Wisc.-1) and the House GOP released their ten-year budget entitled "The Path to Prosperity" [pdf] to much fanfare on Capitol Hill yesterday, laying out an alternative to President Obama's proposal. Compared to baseline numbers, the Path to Prosperity spends $5.8 trillion less, and $6.2 trillion less than the President's budget over the next ten years.

The largest spending cuts come from the discretionary budget, both defense ($830 billion) and non-defense ($1.6 trillion). Rep. Ryan's defense budget accepts the proposals laid out by defense Secretary Robert Gates and endorsed by President Obama, but cuts spending in every other category. The Path to Prosperity lays out radically different reform plans for both Medicare and Medicaid, and in the case of Medicaid finds significant savings ($771 billion).

One of the pillars of Rep. Ryan's reform plan is the complete repeal of the Patient Protection and Affordable Care Act, known infamously as Obamacare. Obamacare's repeal saves the government over $1.4 trillion in spending between 2012 and 2022. While the Congressional Budget Office has consistently reported that Obamacare repeal would increase deficits, Rep. Ryan noted this. "We retain the Medicare savings [from Obamacare] and, instead of double-counting the Medicare savings... re-apply those savings to Medicare to advance its solvency."

One of the subtler items in the Path to Prosperity is the reform of budget process rules. The budget will impose mandatory reviews of mandatory spending programs along with statutory limits on discretionary spending that will be accompanied by automatic across-the-board cuts if those limits are violated.

There's a lot of detail to come in the Path to Prosperity, as legislative language has still not been released. For example, it's unclear on how the Ryan budget will achieve the aforementioned Medicare savings. Furthermore, there remain questions as to how some of the cuts (such as the $715 billion in non-healthcare mandatory spending) will be achieved. Some of the details were missing on tax reform, though the budget stays relatively close to the CBO's baseline revenue estimates. Addressing the lack of tax reform detail, Rep. Ryan said, "You will see a broader tax base with lower rates… and so we're going to go through a bunch of hearings to figure out how exactly and precisely to do all that. We don't raise taxes in this."

Nonetheless, the budget garnered rave reviews from conservatives. Douglas Holtz-Eakin, ex-CBO director and president of the American Action Forum said, "you're going to hear that this represents a gratuitous attack on the aged and the poor. In fact, there's no greater attack than to do nothing."

Indiana Governor Mitch Daniels, seen as a kindred spirit in the deficit and debt fight on the Right, said "The House budget resolution is the first serious proposal produced by either party to deal with the overriding issue of our time."

While many of the policies are there, the political viability of the Ryan Path is yet to be determined. Speaker of the House John Boehner is fond of pointing out that the GOP only controls one half of one third of the government. With the Democrats solidly holding the Presidency and the Senate, reform as meaningful as Ryan's will have trouble seeing the light of day. What's clear is that the GOP can now credibly tout a reform plan as their own. Whereas a go-to Democrat talking point from 2009-2010 was that the GOP was "the party of No," Democrats will have to step up to the plate to avoid the mirror being turned on themselves.

[agere_contra]

(such as the $715 billion in non-healthcare mandatory spending)

What does the EPA cost? What does compliance to bizarre EPA regulations cost businesses? That's got to be worth a few billion right there.

[chuckee]

The only thing missing from Ryan’s fiscally sane budget proposal is the institution of a optional penalty tax on registered Democrats who could elect to pay higher marginal income tax rates to fund the higher levels of entitlement spending they want to continue.In exchange for electing to pay the Democrat penalty tax, said Democrat will be entitled to the higher level of entitlements than the rest of us. How many Democrats do you think would choose to pay for their own entitlements?

[gogogodzilla]

I would also mandate that if you wish to collect federal entitlements, you must pay federal income tax. No ifs, ands, or buts.

Even if it’s just a token amount (for the truly poverty-stricken), everyone would have to pay into the system to get anything out of the system.

Which, coincidentally, would cut-off any illegal from collecting, as they would need to have official indentification to actually pay the taxes.

[chuckee]

The Arizona legislature is going that route. They just passed flat tax bill where everyone pays 2.08% state income tax even folks earning less than $10,000 a year. Formerly our brackets were 2.5% to 4.5% with certain deductions and exemptions and with zero tax for those earning less than $15000. With the new bill all deductions and exemptions have been eliminated in exchange for the lower flat tax that everyone pays.