The Agenda

The Case Against Ryan from the Right Doesn’t Hold Water

Josh Green of Bloomberg Businessweek observes that at least some conservatives are criticizing the Ryan budget from the right:

The point of balancing the budget in 10 years, in their view, is to force Republicans to vote for entitlement cuts—and then, they hope, to see those same Republicans get reelected. This would demonstrate that voting for deep entitlement cuts would not be the automatic death sentence that many Republicans presume and, in time, would condition Republicans to think differently, and much more ambitiously, about what they could achieve. Today, my source told me, Republicans would shy from such cuts, even if they controlled all of Congress and the White House. It’s important to begin laying the groundwork now, so that future Republicans will be willing to go much further.

Ryan’s budget was supposed to be a key component of this plan, a great leap forward. But rather than balancing “the hard way”—by cutting entitlements—it balances “the easy way,” by meekly accepting the Obama tax increase. 

To say that Ryan’s budget achieves balance “the easy way” is absurd. Jed Graham of Investor’s Business Daily finds that the Ryan budget calls for restraining the growth of spending outside of Social Security and interest on the debt (16.4 percent of GDP in 2012) to 11.2 percent of GDP, the lowest level since 1948:

That is nearly 25% below the 14.6% of GDP average over the past 64 years. In the only three years over this span that saw spending on the main functions of government (outside of saving for retirement) dip just below 12% of GDP, the unemployment rate averaged 4.5% or less, shrinking safety net outlays while bolstering the spending capacity of state and local governments.

Graham also notes that if we exclude spending on Medicare as well as on Social Security, noninterest spending falls to its lowest level since 1938: from 12 percent of GDP in 2012 to 7.9 percent in 2023. 

So while Ryan’s conservative critics might claim that he is being “meek” by accepting post-cliff federal revenues, he is being rather brave when it comes to reducing noninterest spending on everything but old-age social insurance programs to levels not seen in decades. 

Granted, deeper cuts in old-age social insurance programs might have created more breathing room for this category of spending. One assumes, however, that Green’s correspondent believes that this category of spending ought to be reduced to its 1938 share of GDP, yet that entitlements should be cut more aggressively for current retirees and near retirees as well.

Does Green’s correspondent really believe that championing entitlement cuts for current and near retirees would not jeopardize the electoral prospects of a substantial number of House Republicans? This is not say Ryan shouldn’t have called for, say, an earlier start for Medicare competitive bidding. But it’s hardly a free lunch. 


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