The Budget Wars Begin, With Paul Ryan Firing the First Volley
The budget wars are under way. And that’s a good thing.
It’s been four years since our country has operated with a budget instead of careening between continuing resolutions, always one tantrum away from a government shutdown.
But now House budget chairman Paul Ryan has weighed in with his base-pleasing blueprint. Soon Sen. Patty Murray (D-WA) will add her take to the debate. Then, in April, we’re told that President Obama will finally present his budget, presumably building on some of the specifics he laid out in his proposals for a grand bargain. Don’t expect a lot of initial common ground in these competing documents but a process that looks suspiciously like governing has begun.
I don’t want to sound too hopeful here. Congress has shown an unerring ability to screw things up in recent years, propelled by 50 or so House radicals who would just as soon force our nation into default to prove an ideological point. But along with the president’s welcome outreach to Republicans in recent days, there are signs of problem-solving alchemy at work, spurred at least in part by the passage of “No Budget No Pay” legislation that passed in February. With a bit of skin in the game, Congress seems to be taking its budgetary responsibility more seriously.
But the first step in this potentially constructive kabuki is positional bargaining. And so Ryan’s budget wasn’t intended to get anything resembling bipartisan support. Building on the budgets he has put forward almost single-handedly in the past two years but aiming for an even more ambitious 10-year timetable for a balanced budget, he would cut $4.6 trillion while leaving defense spending essentially untouched. Most of the savings come from a make-believe repeal of Obamacare, and paradoxically, the accelerated timetable is mathematically plausible because of the increased revenues from taxes on the rich that came about because of the fiscal-cliff deal. (Embedded in Ryan’s budget is the implicit acknowledgment that new revenues help reduce long-term deficits and debt.)
Many details are left out, including how an ambitious proposed tax reform to reduce the top rate to 25 percent would work. The Ryan budget is silent on the specific deductions that would be reduced or eliminated to make it revenue neutral, leaving the strong possibility that the effective tax rate for middle-class families could rise.
All that said, credit where credit is due: Ryan’s budget is the first volley in the budget wars, the beginning of a necessary national conversation.
“It’s a constructive effort on his part to put forward a blueprint for people to debate,” said Reagan secretary of State George Shultz, now at the Hoover Institution. “I am very encouraged to see them talking about a budget. We haven’t had a budget in four years, and the president still hasn’t put out a budget. But that’s the way to start getting people in a problem-solving mindset.”
“Ryan should be commended for laying something out that people can discuss and debate,” concurred David Walker, the former U.S. comptroller general who runs the Comeback America Initiative. “He’s clear about his goal—to balance the budget and to do it through reducing spending. He recognizes that the disease is mandatory spending, not discretionary spending.” On the skeptical side, Walker warned: “I don’t think that you can solve this problem politically doing it solely by spending cuts,” and he tempered his praise by noting that Ryan’s plan “doesn’t provide any specificity on Social Security and not enough specificity on tax reform.”
Maya MacGuineas, president of the Committee for a Responsible Federal Budget, said that Paul should get credit for putting out a plan. But she added: “It is clearly a highly political document … and it is nowhere near where it needs to be politically serious. For example, talking about the repeal of Obamacare—that’s not going to happen. And obviously there’s going to have to be a focus on a balanced plan for anything to pass both houses of Congress. So to that extent, Paul Ryan’s plan is a nonstarter.”
Obama even weighed in on the Ryan budget in an interview with ABC’s George Stephanopoulos, not surprisingly dismissing it by saying: “We’re not gonna balance the budget in 10 years because if you look at what Paul Ryan does to balance the budget, it means that you have to voucherize Medicare, you have to slash deeply into programs like Medicaid, you’ve essentially got to either tax middle-class families a lot higher than you currently are, or you can’t lower rates the way he’s promised … it’s a reprise of the same legislation that he’s put before.”
News flash: Obama and Ryan have fundamentally different visions of the role of the federal government. And the last time those visions were put to a national vote, Obama won. Yes, divided government exists, but conservatives are going to have to wait at least four more years before they can justify feeling like they have a mandate to impose their vision on the country. Compromise is required in divided government. That’s why it was significant that Obama wasn’t just salty in his dismissal of the Ryan plan, he took care to present some outreach to the GOP in the form of an alternative plan: “If we controlled spending and we have a smart entitlement package, then potentially what you have is balance—but it is not balance on the backs of the poor, the elderly, students who need student loans, families that have disabled kids. That is not the right way to balance.”
Budgets are where philosophy meets practicality. Cuts don’t occur in an ideological vacuum. They have real-world consequences. So does unsustainable public debt, which can bring a nation to its knees.
There are some rational reasons for optimism. Earlier this month, the president put forward specific proposals for a grand bargain that contains concessions guaranteed to alienate some of the activist groups on the left, including Social Security reform through chained CPI and more means testing for Medicare. These are significant proposals from a Democratic president that should send a serious sign about his willingness to work toward a long-term plan to reduce the deficit and the debt. “It’s an important, credible plan to have out there,” said MacGuineas. “People need to put budgets forward that show they’re willing to make hard choices from where they sit.”
“I’m convinced that the president wants to do a deal,” said Walker. “I’m convinced that Speaker Boehner wants to do a deal. I’m convinced that a deal is possible. But the president has to go from campaign mode to governing mode.”
The budget wars that are just beginning represent a transition back to governing from the permanent campaign, despite the inevitable attempts to rally the base in public debates that will occur on both sides. We’re never going to take the politics out of politics. But the process itself has a purpose, reinforcing the reasoning together that has been missing from our recent debates.
“Let’s get back to serious budgeting,” said Schultz, one of the wise men of American politics. “Hold hearings—start listening to department heads about what are their priorities and why. When people start getting into that discussion, they get into a problem-solving mindset.” That’s when gridlock gets broken and constructive action across the aisle starts to occur. Better late than never.