House Budget Committee chairman Paul Ryan has laid out a vision for 21st-century governance that will become the GOP program for 2011, 2012, and beyond.
It is unquestionably the boldest budget plan ever offered (including Reagan’s first budget), focused first and foremost on bringing federal spending commitments into line with the revenue generated from a pro-growth tax system. It reforms entitlement programs, starting with Medicare and Medicaid of course, but not ending there. Farm payments, welfare programs, and corporate subsidies all are reformed and refocused to reduce costs to taxpayers and work as they should. Outdated programs are thrown out. The bureaucracy is cut down to size. No corner of the budget is spared from scrutiny, including defense. The challenge of unlimited government, and runaway spending, deficits, and debt is immense — but the Ryan plan more than meets it.
A lot more can and will be said about the plan’s details in coming days, including by me. But for today, it’s important to focus on what this plan means in the big picture.
For starters, it completely recasts the struggle between the political parties. Everyone knows that what the president and his allies really want to do is raise taxes. They might agree to some tinkering around the margins on entitlements for show. But in their heart of hearts they believe the solution is higher rates of taxation.
The problem is they don’t have the guts to say so in public. They know that’s the surest way to permanent minority status. And so they are hoping for a more indirect route to their goal, using guile to lure gullible Republicans (see here) into agreeing to their approach without ever having to sell it to a tax-averse electorate.
The Ryan plan blows this kind of plotting by Democrats to smithereens. There’s no tax increase in the Ryan plan, and there’s no debt crisis. What’s required is far-reaching entitlement reform and serious spending discipline. By staking out that position, Ryan and his comrades have improved their leverage immensely. There’s no need to agree to tax hikes to solve the budget problem. What’s needed is for Democrats to get serious about spending reform, as Ryan has.
Moreover, with a Republican plan on the table, the media will surely start to ask Democrats, “Hey, where’s your plan?” This will force them to either come clean with their tax-hike vision, or become the party that pushed the country toward a debt-induced economic crisis. Either way, with more clarity about where the parties actually stand, Republicans can win the public fight.
At the heart of the spending problem, of course, is health care, and at the heart of the health-care cost problem is Medicare. The Obamacare “solution” is heavy-handed regulation and government-imposed cost controls. That approach never works, and only erodes the quality of the system. What’s needed is a functioning marketplace, with government oversight and cost-conscious consumers directing the allocation of resources. And that’s exactly what the Ryan plan would deliver.
The country faces serious and daunting challenges in the coming months and years. We need serious political leaders who are ready and capable of rising to the challenge. No one has demonstrated that capacity more than Paul Ryan.
— James C. Capretta is a fellow at the Ethics and Public Policy Center. He was an associate director of the Office of Management and Budget from 2001 to 2004.
"Moreover, with a Republican plan on the table, the media will surely start to ask Democrats, “Hey, where’s your plan?”"
The media will not ask that question, because that would harm the Democrats' reelection chances.
Reply to this commentLinkReport Abuse@wooga:
Reply to this commentLinkReport AbuseAgreed. The Democrats haven't been questioned yet about their solution to the debt crisis, why would that start now? That would intentionally make them look bad, so the media will not go there. It's up to the Republicans to expose the true lack of substance from the Dems. Best wishes.
To bad the media and the education mafia will slaughter conservatives on this. Most people are ignorant and naive. They want to believe Katie Couric and the other left-wing nabobs.
They also believe that Americans can get more government services for nothing, but having 'the wealthy' pay their 'fair share'.
That's why we are doomed. Really. It's pretty much over, folks.
Reply to this commentLinkReport Abuse@wooga and JimRuss:
the question was already asked and answered (I think in an article today in "The Hill") by something to the effect of... the dems will "likely" provide a responsive budget... (which of course we know they won't!)
@Scottfs:
Reply to this commentLinkReport AbuseSo maybe we're not doomed, we can certainly hope!
Here's how the Dems will go. The wealthiest 400 earners paid less than 17% effective taxes last year. Wall St speculators pay 15% tax on their capital gains, which is less than the marginal tax on people who actually work and are productive. The reason our economy is in such a mess right is due, in no small part, to these same speculators.
Republicans are correct, cuts will have to be made in our budget including entitlements. However, the Republicans feel only the poor and middle class Americans should sacrifice to make us all solvent again. In that respect, they are wrong. To solve our financial problems, rich people are going to have to pay more in taxes, especially wealthy speculators.
Or more simply, it's insane to tax labor at far higher rates than you tax speculating.
In other words, they'll tell the truth.
Reply to this commentLinkReport AbuseWhy should some people pay a higher percentage of their income in taxes than others? We are all equally eligible for the benefits of living in the United States, but the cost is not equally shared. I realize some people simply cannot contribute an equal pro-rated share (e.g 1/300-millionth of the total cost of government). But why should someone who has worked hard and been born with the rare talent of figuring out how to get rich through running a successful business then have to pay a higher percentage of his income than someone who is just a wage slave? There are inheritance taxes to pull away money that isn't earned, but if you can start a business and make it work, why should you be punished and reviled?
Being a successful businessperson doesn't require being born into a particular family, ethnic group, state, etc. Anyone can start a business and many people have started with next to nothing and made a go of it. Most people who start businesses fail within five years, so there's obviously talent and some luck involved (but "luck" is 95% perspiration, to borrow from Edison).
I suspect everyone will have to sacrifice to make the nation solvent again, so there should be no protected classes, including seniors and veterans. But I do think some people are just too close to zero to give up much more, so perhaps there's an out there for the seniors and vets (and vets have sacrificed plenty already, so that's another out). But I would sure like to see Ryan and his cronies start to push a flat tax.
Reply to this commentLinkReport AbuseRon Paul gave back over $100,000 to the US Treasury from his congressional operational budget because he runs a tight ship.
Anyone here who doesn't support Ron Paul for 2012 is a hypocritical fool.
Reply to this commentLinkReport AbuseI expect my Ron Paul endorsement to be deleted from this thread.
Quid pro quo, National Review
Reply to this commentLinkReport AbuseIf your not in the top 2% of income earners and vote republican you are a fool.
Reply to this commentLinkReport AbuseWhy should some people pay more? Because society works better that way. In order to succeed in business, you need customers, and that requires a healthy middle class; Henry Ford realized that, and he was no slouch. The quality of life in a society is highest when there is not a great disparity of incomes. A return to Reagan era taxation levels, and a decrease in defense funding would solve the budget problem. Add to that an _expansion_ of Medicare, because single payer systems have always been less expensive that the mess of pottage that passes for health care in the U.S. currently.
Reply to this commentLinkReport AbuseHank Borelli: Where did you get the insane notion that only Wall Street speculators pay capital gains taxes? Your 401K/pension plan pays capital gains taxes. If you own a mutual fund, and most Americans do, you pay capital gains taxes. If you have a coin collection and sell it for a profit, you are supposed to pay capital gains taxes.
Where did you get the insane notion that Wall Street speculators don't work, or provide nothing of value?
As to those 400 richest only paying 17%. First off, the vast majority of them are Democrats. Secondly, you have to look at the sources of their income. Many rich people invest in govt bonds, on which you don't pay income taxes. Another point is that the rich, thanks to their expensive tax accountants, make use of every loophole in the book. Ryan's plan gets rid of most of those loopholes. It's a safe bet that the amount of money those 400 richest people that bother your conscience so much won't be paying less in taxes, and could end up paying more.
Reply to this commentLinkReport AbuseDB_Alimere: Henry Ford wasn't a slouch, but there was a good deal of con man in him.
The reason he paid his workers more was two fold. First he had two. Working on the early assembly lines was less pleasant than the style of work used by his competitors. So he had to pay people more to get them to put up with the lines. The second reason was that the assembly lines were more efficient, which enabled each person to create more in a day, enabling Ford to pay them more.
Ford's line about paying people so that they could afford his cars was never more than a sales pitch, and the gullible are still falling for it.
As to paying more just because you earn more, you still need to justify such a belief with something stronger than your standard jealousy and envy schtiks.
Reply to this commentLinkReport AbuseAn equitable tax system should be based on the percentage of the total national income a person earns. If the top 1 percent of earners make 25% of the total national income they should, as a group, pay 25% of the total tax, for example.
Reply to this commentLinkReport AbuseIf the Democrats want to capture the higher ground in the budget debate they should craft a plan which addresses the problem with the interests of the ordinary Americans in mind. This could entail removing the cap on Social Security and Medicare, which would be a flat 15% tax on people earning $106,000 or more, and taxing the corporations in a fair manner.
MarkW, i never said Wall St speculators are the only ones paying 15%. Most Americans do not own mutual funds. I don't care if the wealthiest are democrats.
Let me take your bait. "Oh-my-god! If they raise capital gains taxes a few points it will wipe out my retirement accounts!!! Oh my god." Is that the reaction you expected? I'm really not sure.
Fact is, like me, most Americans do not earn their income through capital gains, but earn their daily bread through work. So an increase in capital gains will not affect workers, it will mainly impact speculators and people like hedge fund managers (whose fees are taxed like capital gains for some unfathomable reason).
I also don't believe the wealthiest 400 are making their millions per year on interest from treasury bonds (trading bonds perhaps). Look at a graph of capital gains taxes vs. effective tax rates on the wealthiest 400 over the last 15 years and you'll see they correlate very well.
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Look, unless you believe that a hedge fund manager is worth 100 to 1,000 times more than a nurse, an architect, a plumber (and should be taxed at a lower rate), you got to understand that the invisible hand is hardly an effective means to distribute wealth.
If you do think Hedge Fund Managers are worth their immense pay and that the invisible hand is perfect, well even the guy who coined the notion of the "invisible hand" believes in the progressive tax - here's a quote from Mr Smith:
"It is not very unreasonable that the rich should contribute to the public expense, not only in proportion to their revenue, but something more than in that proportion."
I wonder what he'd think about a system like ours, when the rich pay not more than in proportion, or directly in proportion, but actually LESS than in proportion to their wealth. It's sick.
Lastly, rimfrel, have you checked inheritance taxes lately? I suspect not, perhaps you should.
Reply to this commentLinkReport AbuseDB_Alimere, I never said the rich shouldn't pay more, but why a higher percentage of their income? Adam Smith's quote (provided by Hank Borelli) doesn't explain why. A tax based on the percentage of income would net more dollars from those of higher income. They would pay more, in other words, but fairly so (at the same percentage).
The rules for determining taxable income get in the way of fairness, providing loopholes for the rich to put their money into untaxable bonds or whatever. Why can't income just be income?
Inheritance taxes IMHO ought to be zero and they aren't. I think this is all I need to know about them, since I am unlikely to inherit or leave anything from/to anyone. Poverty has its advantages.
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