The 2 Most Magical Numbers in Paul Ryan's Magical Budget


Magical (adj): "delightful in such a way as to be removed from everyday life." [Synonyms: fake, absurd, couldn't-hardly-happen-even-if-Republicans-controlled-both-houses-and-the-presidency]

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2.1% and $6.7 trillion

Without context, these are inconsequential numbers. With context, they're magical numbers. So here's the context.

Paul Ryan and his budget have taken lots of flack for giving Medicare an unrecognizable facelift and gutting federal spending on the poor and sick to reach his balanced budget goals next decade. Both of those goals are radical and/or visionary, depending on your opinion of Ryan, but neither are quite magical.

What is magical, however, is thinking you can cut non-defense discretionary spending -- what most people think of as Government -- to 2.1 percent, one-third below its modern low. That's what Ryan's budget does. Here's how he does it.

He keeps the sequester -- a $1 trillion guillotine to non-defense and defense spending. But his breakdown of spending pushes virtually all of those cuts into non-defense categories. In other words, everything in our discretionary budget -- scientific research, housing, international relations, education, public safety, public health, environmental protection, job training -- doesn't just get a sequester. It gets a double-sequester! Plus another $250 billion in cuts, under the Ryan budget. Win the future.

Here's the long view of non-defense discretionary spending, with data from Loren Adler and the Bipartisan Policy Center (plus an assist from Michael Linden at the Center for American Progress). The green line is today's law, including the sequester (a law passed specifically because it was so bad that it would force us to change it). The blue line is the Ryan plan (even worse).

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"It's just fake," Linden said. "It's just total fake. Ryan's projection is about a third lower, as a share of the government, than any year since [we have records]. No future Congress would ever approve this."

The second most magical number comes from the other side of the budget. We talk a lot about Ryan's spending cuts. But it's his tax spending cuts that are perhaps the most ludicrous.

Ryan wants to change projected tax revenue by $0.0. But his plan to cut and consolidate rates creates a $6.7 trillion hole in federal revenues, as Matthew O'Brien pointed out. That can only be made up by eliminating the biggest (and most popular) tax breaks. He would almost certainly have to tax employer-paid health care, mortgage interest, charitable donations ... the list goes on and on. Ryan doesn't say what he could cut because it would be despicably unpopular, even more so than his proposed cuts. In fact, his $6.7 trillion in mystery tax-spending are 46 percent more than his spending cuts. (Good luck, Ways and Means Committee!)

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If I appear to be disproportionately picking on Paul Ryan, it is only because I am. There is widespread understanding that unemployment is a real crisis, right now. There is thorough economic evidence that our most immediate crisis is long-term unemployment and the permanent structural deficiencies it will create. There is widespread belief that we need to reduce future deficits through a combination of higher revenues and lower spending. Ryan's budget neither protects the unemployed, nor fixes their hysteresis, nor proposes a balanced solution to a future budget problem that it also overemphasizes. Make-believe numbers in the pursuit of misguided goals is dark magic, indeed.


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Derek Thompson is a senior editor at The Atlantic, where he writes about economics, labor markets, and the entertainment business.

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