Welcome Budget Talk

What Paul Ryan's plan gets right-and wrong

John Stossel | 4.14.2011 4:30 PM

Finally. A serious budget plan. House Budget Chairman Paul Ryan's proposal has the head-in-the-sand crowd horrified . A Washington Post columnist called it "radical … irresponsible … extreme."

Ryan's plan offers some great things: less spending than President Obama wants; a path to a balanced budget; repeal of ObamaCare; an end to corporate welfare. And it would make the social safety net sustainable rather than open-ended and going broke.

It even inspired President Obama to say he'd come out with his own deficit plan, although he reportedly "will not offer details," just "goals." And of course his plan will "raise revenues." That means more taxes. Ryan's plan is better.

Scott Garrett of New Jersey, who worked on Ryan's plan, told me last week, "We want to be able to make sure that the programs that people rely on today will actually be there tomorrow."

Ryan's "roadmap to prosperity" lays out $6.2 trillion in cuts over the next 10 years—not, sadly, cuts from what government spends today, but from what President Obama wanted to spend. Spending would actually increase by about a trillion dollars over the decade.

Garrett is chairman of the Republican Study Committee, which proposes more cuts than Ryan. Its plan would actually cut spending by about $300 billion and end the deficit in eight years—[AZ2]Ryan's plan wouldn't balance the budget until 2050 or 2080. I asked what the RSC cuts that Ryan doesn't.

"We take additional cuts in the entitlements."

It raises the retirement age for Social Security to 67. Good. When FDR created Social Security, most Americans didn't even make it to age 65. Today, Americans on average live 78 years. Raising the age to 67 doesn't do much. I wish they'd index the retirement benefit age to life spans.

The RSC plan would sell 5 percent of government lands. That's good, too. It would also reduce the federal workforce by 15 percent. Ryan's figure is 10 percent. That's a start. But they would do it by "attrition." That's cowardly. It's not management. They should fire the worst 10 or 15 percent. That's what private-sector managers do.

Also, neither Ryan nor the RSC really address "defense." There's nothing in either plan that asks what the military's mission should be, or even what the role of government should be. Ryan and the RSC don't kill off any departments. They just cut most things a little—assuming that almost everything government does, it should do. That's not management. When Ronald Reagan campaigned, he said he would close the Education and Energy departments. He didn't, and they've only grown. Now, when they acknowledge the budget crisis, even the Republicans don't want to close them.

Today, the federal government spends 25 percent of gross domestic product. Ryan would get it down to 20 percent. But when Bill Clinton left office, it was 18 percent.

Sen. Rand Paul has a program that would balance the budget in five years by cutting $4 trillion—or 20 percent—off the Congressional Budget Office's baseline. It's a better plan.

"The president's plan will add about $11 trillion to the debt over 10 years," Paul told me. "Congressman Ryan … is trying to do the right thing, but his plan will add $8 trillion to the debt over 10 years. We need to do something much more dramatic, or I think we're in for a world of hurt."

He'd get rid of whole departments, like Education, Energy, Housing and Urban Development, and Commerce. He'd also reduce "defense" spending.

Paul said: "The inconvenient truth for conservatives is you cannot balance the budget if you eliminate (only) nonmilitary spending. … I do believe in a strong national defense … but it doesn't mean that all military spending is sacred or that all military spending is well-spent."

Neither Paul's plan nor the weaker RSC and Ryan plans will prevail this year. After all, Democrats control the Senate and the White House. But at least they got the conversation going. It should pay off in the future. And that's cause for some cheer.

John Stossel is host of Stossel on the Fox Business Network. He's the author of Give Me a Break and of Myth, Lies, and Downright Stupidity. To find out more about John Stossel, visit his site at johnstossel.com.