One of House Budget Committee chairman Paul Ryan’s favorite phrases is “adult conversation.” As in, we need to have an adult conversation about the nation’s fiscal challenges. With the release of his budget resolution, Ryan is beginning the discussion even if his purported conversational partners on the other side of the aisle insist on banging their cups on their highchairs and wailing.
Three inescapable realities drive the federal budget: We spend too much on health care, we are growing older, and we face an alarming federal debt. Ryan is daring to tell the country how he’d react to this in a stark instance of reality-based budgeting. His implicit challenge to those who reject his solution is, “Fine, what’s yours?”
Advertisement
Health-care costs are far outpacing inflation, and Medicare is growing at twice the rate of the economy. The two trends are related: Medicare’s blank-check payment system contributes to soaring medical costs. Beginning in 2022, Ryan would give new Medicare beneficiaries a subsidy to buy their own insurance. It would bring consumer choice and competitive pressure to an area sorely lacking them. Maybe you think this reform of Medicare — which has an ungodly unfunded liability over the next 75 years — is too radical. Fine, what’s yours?
As we age as a society, the burden of maintaining our old-age entitlements falls more heavily on young workers. The Ryan budget notes that in 1950, 16.5 workers supported each Social Security recipient. In 2000, it was 3.4 workers. In 2040, it will be 2.1. Ryan’s budget would force the president, working with Social Security’s trustees, to submit a proposal to right the program’s fiscal balance. This path might strike you as too timid — or too bold. Fine, what’s yours?
The Ryan budget controls federal spending and brings it below 20 percent of GDP by 2015. It reduces the deficit $4.4 trillion compared with Pres. Barack Obama’s budget over the next ten years and reaches so-called primary balance — a balanced budget outside of interest payments on the debt — by 2015. Obama would keep adding to the debt at a prodigious clip, almost doubling it from its current $14 trillion to $26 trillion over ten years. Perhaps Ryan’s method of controlling the debt is not to your liking. Fine, what’s yours?
Ryan keeps tax revenue at the historic level of roughly 18 percent, and brings both the top personal and the top corporate tax rates down to 25 percent while eliminating deductions and loopholes. This reform — designed to make the tax code simpler and more pro-growth — might strike you as “unfair.” Fine, what’s yours?
The unspoken Democratic answer to all of the above questions is yet more taxes, coupled with price controls on health care. Democrats don’t want to be frank about it for political reasons. They cover for their own substantive vacuity with evasions and crude attacks on Ryan’s proposal as a budgetary death panel. Such is the lot of the adult in the room.
Paul Ryan is Washington’s answer to those Republican grown-ups out in the states, Govs. Mitch Daniels of Indiana and Chris Christie of New Jersey. They all drench themselves in the details of policy, are unafraid to speak hard truths, and — in their own ways, in keeping with their different personalities — relish the art of public persuasion. No wonder the three of them are so often mentioned wistfully as (unlikely) potential presidential candidates.
As the chief executives of their states, Daniels and Christie have more power to enact policy into law than does Ryan. His budget is fundamentally an exemplary exercise. It demonstrates a comprehensive solution to the nation’s fiscal condition, without tax increases and without more heavy-handed government intervention in health care. Ryan needn’t sweep all before him to succeed, but merely survive — accomplishment enough, given his frankness on entitlements — to pass the baton to a Republican presidential candidate.
Perhaps you think this isn’t the best way to start an “adult conversion.” Fine, what’s yours?
Great comments and observations Rich. I fully agree, and the days of listening to Democrats demagogue Republicans to death with the support of MSM are over. Reid looks and sounds increasingly weak and more pathetic by the day. There is now way 19 months of that is going to play well when people can see a clear solution and logic available by the other side.
I'm with you up until Paul Ryan has to pass the baton. As Dr. Krauthammer writes today, no one can begin sell the new budget like Ryan himself and if republicans are smart they will run on Ryan's plan. We need opinion leaders like yourself to compel Ryan to run. He will appeal to the younger voters that need to buy in to entitlement reform (and that Obama is losing rapidly). A Ryan win is a mandate for his plan.
Couldn't we for once have a young, exciting, articulate candidate with real conviction and passion? A girl can dream..
Will the Republicans in Congress ever find adults across the aisle to converse with? Any Democrat who grows up will be ostracized by his juvenile colleagues.
Awesome plan! Why not just increase the top tax bracket to 90%? Cap gains up to 85%? Then we could give all that revenue to the poor and the needy. We could solve all the countries' problems, give free housing, health care, food, cable, internet, swimming pools, and any other luxury that the "rich" enjoy if we just tax the hell out of them, am I right?
Your proposal, unfortunately, doesn't take into account that the more you tax something, the less you get of it. If you tax investment and capital gains (the means and reward of economic growth), you will get less investment and less growth, higher unemployment, and lower revenue. There is no such thing as a static tax revenue model. Streamlining the tax code, eliminating loopholes, and LOWERING the overall tax burden, will actually increase revenues while allowing for more growth in the economy. It's simple, fair, and by far the most intelligent answer to our obvious problems. Thank Heaven for grown-ups like Ryan!
MikeB and maksutov66: Yeah, you did it all right...
If you mean take what's left of the economy and shoot it in the back of the head. That's the sort of spending and taxation level that is common in Europe...but it's working out great for them, right?
I find it amusing that one of the primary reasons given against raising taxes on the wealthy, is that they will just find a way to not pay them. Wow, that's going to be your argument? I thought these were the entrepreneurial, moral, courageous gods we all should aspire to be? Turns out they're just trying to get away with something.
Oh wait, it's civil disobedience right?
How about this - no deductions or credits, lower the middle class tax rates and raise them for the wealthy?
I'm more than willing to see if they all really 'pack up and go elsewhere' and then come up with a Plan B. This is the greatest country on earth right, where would they go? Oh, you're saying the only thing that stands between the U.S. and a whole set of other desirable countries is tax rates?
Yeah, this'll work out real well with
small businesses (sarc/). Don't worry though, the larger ones will gladly pay enough CPAs and lawyers to navigate through the loopholes to reduce their burden to 17%. Laffer curve at work
3. Restore estate tax on estates over $5 million, indexed for inflation.
Sure why not tax someones previously taxed wealth.....sounds fair; collectively it won't make a dent in 1% of this nation's total liability, but you'll have one more weeks worth of Gov't cheese thanks to finacially raping a corpse and their rightful heirs.
4. Restore 28% long term capital gains rate.
Do you want anyone to do business in this country, or even conceive of starting one?? Guess we all better start brushing up on our Mandarin.
5. Subject interest and dividends to Social Security and Medicare taxes.
Considering we have severely limited business growth which hamstrings employment; and we technically have two employees paying for every one individual receiving these programs, would'nt it be better to reform those systems.
IOW's remove all of you're tiresome, antiquated, lib bullet points and stop spending money you don't have.
BTW: You can tax everyone at 100% and you still couldn't pay for this years 1.65 trillion dollar Obama spend-o-rama budget proposal.
MikeB's plan, plus cuts to defense, also works for me.
Another option, if it is tax simplification you want, would be to eliminate all deductions and credits and create a larger standard deduction and personal exemption such that there are no taxes at income levels below, say, 2-3 times the poverty level. Above that level create many tax brackets, say, 5%, 10%, 15%, 20%, 25%, 30%, 35%, 40%, 45%, 50% on all income, whether it be from wages, capital gains, or dividends.
Let's stop the lie that the number of rates has anything to do with simplification. It doesn't, whether there is one rate or 20, you simply look the taxes up in a table (or a program like turbo tax determines the correct figure). What makes taxes complex is determining what is taxable income and planning around all the tax preferences (including those for capital gains).
Mr Lowry can't seem to write a column without mentioning Daniels or Christy.Mr. Lowry reminds me of George Will pushing Howard Baker or George Bush for the GOP nomination in 1980.
Unfortunately it doesn't "get is all the way there," not even remotely. There aren't enough people subject to what would be the 39.6% tax bracket to fill the gap. Same issue with capital gains.
Remove the cap on SS (without removing the cap on benefits I am assuming) and (in addition to not making a big enough dent in the deficit) you eliminate whatever's left of the argument that its a pension program and leave it as another wealth transfer program. One that primarily shifts wealth from the young to the old.
A trivial amount of research will show you that the Estate tax has never brought in meaningful amounts of money to treasury.
Basically, these suggestions are all policy goals that could be argued individually on their merrits. However, they are utterly insufficient to address our budget problem.
Try googling "Eat the Rich" on youtube. Its not perfect, but does give a pretty good idea of the scope of the problem.
The dems idea is the same as always. Spend with no regard to the consequences. Then, when responsible people try to make some difficult choices to deal with the consequences, they throw themselves on the floor, kicking, screaming, holding their breath, threatening to take their ball and go home, etc... We have seen it all before.
Realistically, they have no credibility on this subject and should not be taken seriously in their complaints. Having allowed an entire legislative session expire without a budget leaves them irrelevant in this debate.
Freeing 40% of the wealth and 25% of the yearly income from taxes, as we presently do, is plain foolish. There can be no long-term wealth without security, and by allowing the rich to shed their fair share of the burden of that security, we guarantee that we'll fail. So tax everyone (including corporations) equally, and quit spending trillions on military field trips. Budget fixed.
To all those who want to claim that we only have a "revenue problem", not a spending problem - when there is any liberal contingent controlling a substantial portion of the government, whether it's the presidency or one of the congressional bodies, there is practically no level of spending that is considered objectionable. Raising taxes on anybody doesn't "fix" anything. It only encourages more spending from liberals. We didn't go from a $200B deficit to a $1.5T deficit in 2 years by not raising taxes on the wealthy.
What we need to raise is some common sense.
Follow
