First Thoughts on the Ryan Plan

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As I said yesterday, I think it's no longer credible to complain that the GOP has not put forward any sort of meaningful solution for the budget.  At this point, they're the only ones who have put forward a detailed outline; the Democrats still seem to be hoping that if they kind of mill around long enough, eventually an angel will float over the horizon and deposit a plan that doesn't annoy anyone (and/or allows them to pay for the entire thing by raising the marginal tax rate on the Koch brothers and Richard Mellon Scaife to 110%).  


The broad outlines of the plan would work, from a budgetary perspective.  It reduces the deficit to a smaller percentage of GDP than either the current-law baseline or the more likely "alternative fiscal scenario".  On the other hand, politically, it seems very unlikely to pass in anything like its current form--the Ryan plan actually cuts spending, as a percentage of GDP, from its historical levels.  Given the burden of Baby Boomer retirements that we have promised to cover--and the GOP's craven cowardice and shameless pandering in the face of the senior lobby--I don't see how spending is going to fall in the near-to-medium term.

That is a reasonable objection, but not a fatal one.  Most bold plans get negotiated.  The question is whether the GOP is actually willing to negotiate, or somehow believes that it can get its way through sheer bloody-mindedness.  With GOP freshmen idiotically cheering a potential government shutdown, as though this had anything at all to do with getting government spending or deficits under control, "bloody-mindedness" seems like the more credible current explanation.

On the other hand, they've hardly got a monopoly on that. The wildly disproportionate fury and outrage which greeted both Bowles-Simpson and the Ryan plan from the left indicate that progressives have so far failed to come to grips with the fact that they are going to have to compromise: that while some of the gap is going to be closed by tax increases, some of it is going to be closed by spending cuts.  And not just defense cuts, or seemingly trivial changes to physician reimbursement rates that we hope will snowball over time, but actual cuts in services that people currently want and expect to get from government--but do not want or expect to pay for.

Of course, I expect Democrats to fight as hard as possible for higher spending, since they think this will be better.  But the overall level of dismay makes it seem to me as if reality is just setting in: they are negotiating with an opposition as determined as they are, and that opposition wants spending cuts, which means that they're going to have to ultimately accede to some spending cuts, because this is one policy area where doing nothing is literally not an option.

To be sure, the Republicans do not seem to me to be in much keener touch with reality--Grover Norquist not only believes we can do it all without tax increases, but enforces that discipline on the politicians of the right.  They too are wrong, and when push comes to shove, I'm pretty sure they'll have to throw Grover over the side of the sled to the AARP wolves nipping at their backs.  But at least now the GOP has staked out some territory from which they can begin negotiations .  As of this evening, the Democratic policy plan consists of yelling "You suck!"

What the Ryan plan really shows is not where we're going, but how long it's going to take us to get there.  The vengeful, partisan spirit of the times is not conducive to coming to any sort of bipartisan agreement, however grudging.  And it is going to have to be a bipartisan agreement.  Even if either side actually assembled a political coalition large enough to ram through its dream plan, look how well that's working out for ObamaCare: threatened on all sides from lawsuits and opposition politicians looking for any opportunity to cripple the program.  Democrats can complain that this is all the fault of mean, mean Republicans who are putting their narrow ideological interest ahead of the country, but of course, the Republicans think that their ideological interests are what's best for the country.  Elections also have consequences when you lose them, one of those being that controversial major legislation jammed through on a party line vote is unlikely to be particularly stable.

That means that any real budget deal is going to have to, somehow, bridge the gap between Republicans and Democrats.  The Ryan plan is fine as a starting point for talks.  It is not fine if the GOP refuses to accept that it cannot also be the ending point.

Drop-down bar thumbnail credit: AP Photo

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Megan McArdle is a columnist at Bloomberg View and a former senior editor at The Atlantic. Her new book is The Up Side of Down.

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