A Path to Prosperity
A couple years ago, Rep. Paul Ryan (R-WI) kick-started the conversation on deficit reduction with the release of “A Roadmap for America’s Future.” Since then, a number of organizations from varying ideologies have put forward their proposals to fix the nation’s fiscal crisis. The most notable of these were the recommendations made by the National Commission on Fiscal Responsibility and Reform, which was led by Erskine Bowles and Alan Simpson, in “The Moment of Truth.” While many of the recommendations differ, all sides tend to give Congressman Ryan credit for advancing his outline and stimulating the dialogue.
This week, Rep. Ryan has once again put forward a plan to aggressively tackle the Federal budget deficit titled “The Path to Prosperity.” Since the release of the “Roadmap,” Republicans have taken control of the U.S. House, and Ryan is now the Chair of the House Budget Committee, with responsibility for setting the FY 2012 budget. Therefore, the “Path” is really an outline for the House GOP leadership to explain its overall vision moving forward. Rep. Ryan presents this vision both through a YouTube video (complete with compelling charts showing the dire fiscal situation that we are in without action) and in an April 5 Wall Street Journal op-ed. In his piece, he writes, “America is facing a defining moment. The threat posed by our monumental debt will damage our country in profound ways, unless we act.” He then goes on to write that his plan seeks to cut $6.2 trillion from the budget over the next ten years, bringing government spending back to 20 percent of gross domestic product.
Specifically, the plan would: (1) convert Medicare for those under 55 years of age into a private plan which would be subsidized by taxpayers, with those individuals 55 and over remaining in the current system; (2) allow states to tailor their own Medicaid programs with federal block grants; (3) lower the top individual and corporate marginal tax rates to 25 percent along while reducing tax “loopholes;” (4) reduce federal spending to pre-FY 2008 levels; and (5) repeal the Patient Protection and Affordable Care Act of 2010 (P.L. 111-148).
I have no doubt that this plan will be picked apart and analyzed over the coming weeks and months. Already, praise and criticism has come mostly along ideological lines, and given political realities, none of this is likely to be enacted anytime soon. But, it will provide a “roadmap” from which the 2012 presidential electoral debate will run. Republicans will emphasize that the Rep. Ryan plan is “pro-growth” and “fiscally prudent,” while Democrats will denounce the drastic cuts in spending, the privatization of Medicare, the “tax cuts for the wealthy,” and the exceedingly optimistic economic predictions (e.g., 4 percent unemployment by 2015?).
With that said, there is something to be said about setting a marker to start the debate. Rep. Ryan has done that (again). As if to emphasize this point, the Center for a Responsible Federal Budget (CRFB) issued a press release calling the “The Path to Prosperity” a bold document, but finding fault with the fact that not all areas of the budget were on the table, preventing its support from being broad-based. However, Maya MacGuiness, the president of CRFB and a staunch fiscal hawk, said, “We hope that Congressman Ryan’s proposal will not generate attacks but rather lead to a larger discussion over how to move forward with a comprehensive solution. With lawmakers overly focused on a very small part of the budget, this is an important reminder of the tremendous fiscal challenges the country faces and that we should be looking to save not just billions, but trillions.”
With the 2012 election already underway, discussions about the budget have become paramount. Rep. Ryan has laid down one path, but there will be countless other plans put forward as well over the coming months. These debates will be heated at times (especially as they have the potential to dramatically alter the status quo and upset well-established constituencies), but there is a broad consensus that something must be done about our fiscal situation. Whether Rep. Ryan’s plan succeeds or not will depend on whether the public agrees with his stark view of the country’s path forward without action and with his vision for how to address those challenges.