Why The GOP/Ryan Budget is a Non-Starter for Libertarians

It grows the size, scope, and spending of government.


After Rep. Paul Ryan (R-Wis.) released the Republican budget plan for 2014, he received public kudos from small-government groups such as Americans for Prosperity (AFP) and Americans for Tax Reform (ATR). He won praise despite proposing a 42 percent increase in annual federal spending over the next decade and locking in tax increases pushed by President Obama.

AFP sent around an email with the subject line, "AFP Supports Ryan Budget." While urging the GOP to "reject the $620 billion in new taxes negotiated by the Obama Administration during the fiscal cliff deal," the group's president Tim Phillips nevertheless said, "Our hope is that the Senate…look to the Ryan plan as a framework for their own proposal."

ATR's mass email was slugged "ATR Applauds House GOP No Net Tax Hike Balanced Budget Plan," which is a particularly curious statement given that the GOP budget incorporates the tax increase in the fiscal cliff deal. Arguably more problematic, while Ryan's budget zeroes out all spending on Obamacare, it keeps many of that plan's taxes. Those new levies are expected to raise about $800 billion in revenue over the next decade and include:

a new 3.8 percent tax on capital gains and dividends on households that earn more than $250,000 a year, 0.9 percent additional Medicare taxes on all household income over $250,000 a year, a new 2.3 percent tax on medical devices and a 10 percent tax on tanning salon services. 

Apart from the revenue side of the Ryan/GOP budget plan, there is, of course, spending. As I noted yesterday, the budget calls for $3.5 trillion in federal spending in 2014. But by the end of its projection period—2023—the feds would be spending $5 trillion a year, or an increase of about 42 percent. If Milton Friedman was on to something when he said the true measure of government is the amount of money it spends, the GOP budget massively expands the size, scope, and (obviously) spending of the federal government.

The 2014 GOP budget is essentially an update of the past couple of years' plans (also called The Path to Prosperity). The primary difference is the attempt to balance the budget in 10 years rather than 30 or 40 years. That revision relies not on proposing sharp cuts or workable reforms to the major drivers of spending—Medicare, Social Security, and defense spending—but by either ignoring them completely (Social Security), obfuscating relevant details (defense), or calling for modest changes beginning in 2024 (Medicare). The revenue projections are taken from the CBO's completely fantastic and never-before-seen scenario in which receipts grow on average by 4.5 percent year over year for 10 years. Good luck with that.

So, despite the endorsement of two high-profile groups that regularly assail increased government spending and taxes, the Paul Ryan/GOP budget does both. On top of that, it is filled with obvious contradictions, annoying diversions, and phony assumptions.

It didn't have to be this way. Due to a variety of reasons, real spending has been flat for the past several years without Americans starving to death or being overrun by Islamic fundamentalists or neo-Soviet invaders. More important, the political establishment should understand that voters respond to politicians whose actions and policies stem from principle rather than from expediency. Was it only a week ago that a handful of senators led by Rand Paul (R-Ky.) created one of the most stirring moments in recent political memory simply by refusing to conduct business as usual? In standing up to a chief executive, an attorney general, and the man who now heads the CIA over questions of transparency and executive power, Rand Paul and his colleagues didn't just show a spine and a vision sorely lacking in the typical Washington "statesman," they spoke for voters who are rightly worried and concerned about the people who rule them. Whatever plaudits the filibuster partiicipants won, they also were widely attacked by the nation's leading editorial boards and even senior members of their own party (John McCain memorably—and sadly – dubbed them "wacko birds").

Would that the crew behind the House Republican budget had one ounce of the same spine and ideological fervor of folks such as Rand Paul. If they did (or if they dared to include people such as Justin Amash in the budgeting process), they might have produced a document that would actually address out-of-control government spending and a future that is overwhelmed not simply by red ink but by slow economic growth caused by debt overhang.

Sure, "The Path to Prosperity" will be "better" than the Senate's long-awaited plan—at four years in the making, you've got to wonder if the ghost of slow-poke film director Stanley Kubrick is guiding that sad-sack document. And it will surely be "better" than the president's—already late in turning in this year's document, Obama has signaled that he's not signing on to anything that doesn't reverse the sequester's cancellation of White House tours and other core functions of government.

But being "better" than plans that will be put forth by political opponents shouldn't be mistaken for being "good," or even worthy of support. The fact is that the GOP budget plan, apart from its first two years on the spending side, in which it slightly reduces outlays from the current amount, is nothing to celebrate. There are workable alternatives out there, including plans floated by people such Paul, Sen. Tom Coburn, and the Republican Study Committee. While none of these proposed reform agendas represent a turn-key operation, they all have the benefit of actually grappling with the actual issues that are both at hand and about to slam the American people in a few years' time.

Indeed, in its unwillingness to confront directly near-term and long-term issues with the size and scope of government, the GOP budget is simply one more example of how similar both major parties really are. For all the talk of historically high levels of polarization and acrimony in D.C., this latest budget season will almost certainly prove yet again that the two parties have far more in common than either side wants to admit.

Republicans and conservatives more generally are never slow to bitch and moan about how libertarians refuse to get in line and support a first-best or second-best or even third-best option. Don't let the perfect be the enemy of the good, and all that. But by any serious measure, the GOP budget simply doesn't give those of us who— like a persistent majority of Americans—want a government that does less and spends less much get excited about. Winning the broadly defined libertarian vote— a growing demographic that includes people who are generally socially liberal and fiscally conservative—isn't difficult or complicated or hard to do. But it seems beyond the grasp of a party that doesn't seem to fully understand or trust its own limited-government rhetoric.