"The principle of spending money to be paid by posterity, under the name of funding, is but swindling futurity on a large scale." --Thomas Jefferson
2013-03-15-digest-1

It's budget time in Washington, which for the last four years has meant the Democrat-controlled Senate not passing a budget. Rep. Paul Ryan (R-WI), Chairman of the House Budget Committee, released his third "Path to Prosperity" budget with several tweaks to previous versions. Believe it or not, Ryan's Senate counterpart, Patty Murray (D-WA), also released a budget blueprint this week. Naturally, one budget is reasonable, and the other exacerbates the problem.

Ryan's budget is far from extreme as the Left wants us to believe. On the positive side, he made changes to bring the budget into balance in 10 years instead of 30. But spending under his budget still increases 3.4 percent annually compared to Democrats' planned 5 percent growth. Over a decade, that means federal expenditures of $41 trillion instead of $46 trillion. Ryan calls for, but does not assume, tax reform -- just two individual income tax brackets of 10 percent and 25 percent, which would create far more economic growth than any "stimulus" plan. He emphasizes economic growth rather than austerity.

On the downside, Ryan assumes that the recent Obama tax hikes remain in place and that tax revenue will be roughly 19 percent of GDP over the next decade, almost a whole percentage point higher than the post-1980 average. While his budget does assume the repeal of ObamaCare -- impossible given the current White House occupant -- it keeps ObamaCare's $1 trillion tax increases.

 

Just as Barack Obama's budget has, the plan counts "savings" from no longer fighting the wars in Afghanistan and Iraq. Yet those expenses won't be incurred regardless of what budget, if any, becomes law. Though Ryan's budget is generally strong on defense, this accounting gimmick is disappointing.

 

Finally, Ryan's budget continues to put off real entitlement reform. Medicare reform is deferred until 2024, and Social Security isn't touched at all. In light of political reality in Washington, this is at least understandable, but since Ryan's budget stands no chance of becoming law, why not lay out real limited government priorities? These programs are unsustainable in their current form -- Medicare will be insolvent by the time reforms kick in -- and Ryan's plan should have been stronger and more than just "not the Democrats' plan."