Ryan Budget Plan Sounds Good But Lacks Substance
The addition of Paul Ryan to the Republican ticket for the 2012 presidential election has been hailed by many as a welcome turn in the campaign away from vacuous mudslinging and toward a more substantive debate about pressing issues. Both Democrats and Republicans appear to welcome that debate, at least now. In that sense, Ryan’s nod for vice president is unequivocally a positive and does in fact inject what has been a curiously hollow campaign with a dose of real substance.
At the same time, Mitt Romney and the Republicans should be mindful of the adage “Be careful what you wish for.” The injection of substantive debate about government obligations for the health care of seniors and those at or below the poverty line may be welcome relative to an endless debate over the virtues or vices of Bain Capital. Ryan’s blueprint, however, is less a viable plan than a hope and prayer about the ability of “the market” to govern outcomes in a manner that serves the common good.
Ryan has made a name for himself the past two years as the leading champion in the House of Representatives for radical changes in the current trajectory of the federal government and future spending. The past two Republican budget proposals bear the moniker of the “Ryan plan” and are marked by a substantive attempt to deal with the escalation of health-care spending and the complexity of the federal tax code.
His proposals were exhaustively analyzed and covered in the past two years, but now that he’s in on the presidential ticket, that has been revisited. Unsurprisingly, the Republicans tend to laud his efforts. He has called for a massive simplification of the tax code to two rates, one for those making less than $100,000 a year (10 percent) and one for those making above that (25 percent). Even more significant for future budgets, he has called for a complete overhaul of Medicare and Medicaid spending after 2022, with direct subsidies from the federal government giving way to block grants to states. His agenda demands a repeal of most elements of the health-care reforms passed in 2010 (what the Republicans have dubbed “Obamacare”). And he also calls for freezing federal government spending and allowing for a partial privatization of Social Security plans.
As everyone inside the Beltway knows, all congressional revenue plans are “scored” by the Congressional Budget Office. Ryan’s plans were only partially evaluated, but the analysis tended to be favorable insofar as it showed government spending dropping precipitously by midcentury and the deficit declining. But it did so based purely on an assumption that Ryan’s plan would lead to a freeze in government spending other than defense and to increased tax revenue. In short, the plan scored well simply because the Congressional Budget Office accepted the assumptions without any claim that there was any reason that those assumptions would or could actually come true.
Under that logic, any plan that dictated a set of favorable outcomes would score well, as long as the assumptions proved true. If I were in Congress and submitted a plan that said government spending on health care would decline to $1 trillion 10 years from now (rather than the projected $1.8 trillion), that obviously would reduce the federal budget assuming that it did indeed decline to $1 trillion 10 years from now. But there is nothing—zero, zilch, nada—in the Ryan plan that demonstrates how that reduction would come to pass.
And even if a Republican majority in Congress and a Republican president mandated that spending on health care would never exceed $1 trillion (or any other figure), that would perhaps improve the economics of government spending, but in no way change the burden on society as a whole. That is the perverse beauty of federal block grants to states: they can make the optic of government spending look better while simultaneously simply shifting such spending from the federal government (which gets massive scrutiny and is largely transparent) to state and local spending (which gets less scrutiny and is at best opaque).
As a ranking representative, Ryan could act as a beacon for conservatives and even for the Tea Party as an intelligent and articulate spokesman for reducing the size, scope, and spending of the federal government. As he becomes a vice-presidential nominee, however, his ideas will and should be scrutinized not simply as a good-faith effort to deal with real issues, but as realistic plans to deal with those issues. Here his plan gets high marks for effort (defined as confronting an issue head-on and substantively) and very low marks for substance.
Democrats and the Obama campaign, however, can’t just attack the plan for its many assumptions and failings. They must offer a path of their own, and on that score, they have fallen very, very short. Obama’s deficit-reduction commission chaired by Erskine Bowles and Alan Simpson did chart a compelling course, but Obama dismissed it. In the world of endless second chances, he will have to revive that plan or offer another one in its stead.
If the campaign simply tears Ryan (and Romney) down, Obama and the Democrats may just achieve victory at the polls. But they will leave the country rudderless, the victory will be hollow, and the problems will be left to fester. All of us should demand more than a Pyrrhic victory, and attacking Ryan’s plan in the absence of a credible alternative would be a craven path to a second term.