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MURDOCK: Paul Ryan’s ‘path to prosperity’
Sensible budget plan would stave off coming financial meltdown
House Budget Committee Chairman Paul D. Ryan, Wisconsin Republican, must have been one of those elementary-school kids who spent recess fine-tuning his homework while the other boys and girls climbed trees and yanked each other’s hair. Little has changed, as many of those children won congressional seats. They are older, but hardly wiser.
“This plan would literally be a deathtrap for seniors,” shrieked Rep. Debbie Wasserman-Schultz, Florida Democrat, President Obama’s recently designated Democratic National Committee chairman. Mr. Ryan’s economic blueprint, “The Path to Prosperity,” calls for “waging war on American workers,” screeched Rep. Xavier Becerra, California Democrat.
Washington Democrats totally controlled Congress and the White House last year. Nonetheless, they dodged their duty to adopt a fiscal 2011 budget, thus triggering today’s stopgap spending bills and government shutdown talk. Meanwhile, Mr. Ryan’s comprehensive proposal would tame the tsunami of red ink that could drown America. He does this while cutting taxes, fueling entrepreneurship and spurring economic growth.
The juvenile reaction to Mr. Ryan’s measure is especially frustrating because it offers such a mature approach to America’s fiscal predicament. Indeed, “The Path to Prosperity” goers far beyond charts and spreadsheets. The inspiring rhetoric and patriotic allusions of Mr. Ryan’s manifesto advance cherished national virtues.
“This budget offers America a model of government guided by the timeless principles of the American Idea: free-market democracy, open competition, a robust private sector bound by rules of honesty and fairness, a secure safety net, and equal opportunity for all under a limited constitutional government of popular consent.”
How extreme - like a July 4th picnic.
c Mr. Ryan would cut spending over the next decade by $6.2 trillion below Mr. Obama’s plans. This would return Washington’s slice of the economy to its historical average, below 20 percent, rather than Mr. Obama’s 23 percent spending floor.
c Mr. Ryan would eliminate $2.3 trillion in tax increases, including $800 billion avoided by repealing Obamacare.
c Mr. Ryan would combine hundreds of overlapping programs, scrap others and reform some, such as Medicare. While leaving beneficiaries over age 55 untouched, future retirees would receive funds to help purchase their choice of health coverage, rather than one Washington-dictated plan. Similarly, instead of a single federal Medicaid model, governors and state legislators would use federal block grants to serve the diverse needs of poor people in, say, Arizona and Vermont.
“The U.S. government is not running sustained deficits because Americans are taxed too little. The government is running deficits because it spends too much,” “The Path to Prosperity” continues. It adds, “the structure of the tax code should be simplified and made more conducive to economic growth, high wages and entrepreneurship.”
Hence, the “Path” closes deductions and loopholes and lowers top individual and corporate taxes to 25 percent. This outright tax relief would end America’s 35 percent business levy, the industrial world’s highest.
Mr. Ryan also is bracingly candid about the cost of staying on today’s trajectory of rising outlays, deficits and debt. Between now and 2021, when national debt rises from 70 percent to 87 percent of gross domestic product, foreign lenders may tire of renewing Uncle Sam’s credit card. China, highly distracted Japan and others may extend credit but boost interest rates. Elevated borrowing costs will slow today’s modest economic upswing, consequently curb federal revenues and thus compel even more borrowing to offset still-rising debt. This would mean even higher interest rates to entice overseas financiers, and so on. Soon, America will hit the wall.
The document adds: “The government’s failure to prevent this completely preventable crisis would rank among history’s most infamous episodes of political malpractice.”
Mr. Ryan asks a question whose answer will unfold vividly in the days and weeks ahead: “Will this be remembered as the Congress that did nothing as the nation slouched toward a preventable debt crisis and irreversible decline? Or will it instead be remembered as the Congress that did the hard work of preventing that crisis - the one that chose the path to prosperity?”
Deroy Murdock is a syndicated columnist and media fellow with Stanford University’s Hoover Institution.
© Copyright 2014 The Washington Times, LLC. Click here for reprint permission.
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