Congressman Paul Ryan (R-WI) released his budget proposal for FY 2015 yesterday, and as expected, it is quite similar to the budget blueprints from previous years. Let me first say that this budget would be superior to the status quo a million times over. Medicaid and Food Stamps would be block granted to the states and Medicare would be subject to at least some optional free market reforms at the end of the budget frame. Fannie Mae and Freddie Mac would be eliminated. And most importantly, it defunds the Obamacare programs.
If Republicans would only fight for this budget during the debt ceiling fisticuffs, many conservatives would be more than satisfied.
But that is the point. Given the fact that Republican have no intention to fight for even some major components of this budget when the deadline looms in September, why put out a half-baked proposal? If this is just designed to be a messaging document that is tossed in the trash at the end of the fiscal year, why not place our ideal proposal on paper?
Ultimately, Ryan accepts the entire fiscal cliff ($618 billion) and Obamacare tax increases (roughly $1 trillion), working off the [optimistic] CBO 10-year revenue projections of $40.6 trillion. Yet, even with the optimistic revenue projections and tax increases, the budget still runs deficits because not enough government programs are phased out or reformed, especially in the Department of Education and some of the other bloated bureaucracies.
As you can see, this year’s budget proposal is essentially the same as the FY 2014 document. It’s just that entitlement spending will grow every year, engendering a $1.2 trillion increase in this year’s budget. Even in the near term, this budget actually spends more, increasing spending in 2015 to $3.664 trillion ($166 billion more than what as projected in last year’s budget).
Outlays: $41.466 trillion
Revenues: $40.241 trillion
Hence, although the budget comes close to balancing in 10 years from now, much of that is achieved by accepting the current tax baseline. Republicans should be able to show how the budget balances within a conservative framework of the tax code. Granted that this budget would easily balance if we implement Medicare premium support before 2014, but that is the point. If we plan to leave traditional fee-for-service Medicare in place and make premium support optional, why not begin the free market option earlier?
Moreover, there is a difference between balancing a budget and limiting government. Balancing a budget is all about accounting. You can coalesce enough small cuts across many programs and come up with a big number, without ever eliminating many of the 2228 federal government assistance programs. I’m not sure how many of them would be abolished under this budget, although as mentioned earlier, solid reforms are imposed on Medicaid and Food Stamps.
Even as it relates to cutting raw dollars and cents, spending would increase, on average, 3.5 percent a year until 2024. In other words, the federal government will still grow faster than the private economy.
Overall, this would be a great start if Republicans planned to fight for this document throughout the appropriations season. They should announce upfront that they have no plans to pass a CR or omnibus bill this year and force Democrats to go to conference on each of the 12 appropriations bills through regular order. That way, we can fight Obamacare in the HHS bill without fear of the Democrats holding the rest of government hostage. Yet, that demand has not been made. And sadly, we know from past experience that Ryan will be the first one to ditch his own budget when the going gets tough in September.
One other important point: if Ryan gets his way on amnesty, all of the supposed savings from welfare reform will be rendered null and void.