Why Paul Ryan's Budget Matters

Paul Ryan's budget is much more vague than he'll admit, but much better for the budget wars than liberals might suggest

615 paul ryan 2013.jpg

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Paul Ryan unveiled the House Republican budget this week with an ominous yet familiar warning: "America's national debt is over $16 trillion." Having stated the problem, he then offered a solution, one which differed only marginally from what he's offered the past two years. Namely: restrain government healthcare spending on Medicare and Medicaid, reform the individual tax code, close loopholes, lower corporate taxes, and promote natural gas and energy independence. The goal? A balanced budget by 2023 that will ensure "the well-being of all Americans...and reignite the American dream."

The strongest part of Ryan's unveiling is not the specifics, which may not be very strong at all, but the unimpeachable critique of the White House and congressional Democrats for not offering their own blueprint and budget for the future. Some of that is semantics; both the president and congressional Democrats have offered various rough outlines of their long-term budget, and now Senate Democrats offered their counter-proposal. But until late they had operated more in the rough-and-tumble of dysfunctional Washington negotiations rather than with explicit, official and formal (and long) outlines of exactly what will be spent and how. Yes, each year the White House, through the Office of Management and Budget, does assess and express views about present spending. That is not the same as an explicit pathway for the future, which Ryan has indeed offered.

Such offerings are vital. You may, as I do, disagree with key elements of what Ryan and the Republicans are proposing. You may, as I do, object to the fixation on the size of the current debt without any consideration of why that debt was incurred and how much it currently costs to service it, given historically low interest rates. But Republicans are offering a set of answers, and Ryan for one is asking for those to be addressed so the process of debating and, yes, compromising can begin. No, the president is not required to offer a detailed budget; the power of the purse lies with Congress, not the White House. But a detailed vision, especially one that contrasts with the Republican one, would be welcome and productive.

Instead, what we get is mutual mistrust and bile. Assuming the worst of those you disagree with is in vogue these days, at least in politics. It's a bipartisan sport. Just as Ryan was claiming to welcome ideas from the president and Democrats, House Speaker John Boehner made the following claim on his website: "The president [is] AWOL and unserious about eliminating the deficit." Senate Majority Leader Harry Reid shot back that Ryan's budget proposal "is anything but balanced, anything but fair." The fund-raising machines of both parties jumped on these ideas. The Democratic House Majority PAC issued an email blast saying Ryan's budget ideas were recycled (which is true) and that if his plans ever came close to becoming law they would gut middle-class safety nets. At the same time, "The wealthy, Big Oil and companies that ship jobs overseas? They're sittin' pretty."

American politics, let alone any country's politics, have never been characterized by gentility. People of strong disagreements rarely engage in heated and passionate debate that stays on point, let alone debate that begins and ends with the presumption that everyone engaged is committed to the best interests of the collective. In that sense, today's political and economic discourse is no more or no less ad hominen, immature and demagogic than at multiple points in the past.

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Zachary Karabell is Head of Global Strategy at Envestnet, a financial services firm, and author of The Leading Indicators: A Short History of the Numbers that Rule Our World. More

At River Twice Research, Karabell analyzes economic and political trends. He is also a senior advisor for Business for Social Responsibility. Previously, he was executive vice president, head of marketing and chief economist at Fred Alger Management, a New York-based investment firm, and president of Fred Alger and Company, as well as portfolio manager of the China-U.S. Growth Fund, which won a five-star designation from Morningstar. He was also executive vice president of Alger's Spectra Funds, which launched the $30 million Spectra Green Fund based on the idea that profit and sustainability are linked. Educated at Columbia, Oxford, and Harvard, where he received his Ph.D., he is the author of several books, including Superfusion: How China and America Became One Economy and Why the World's Prosperity Depends on It (2009), The Last Campaign: How Harry Truman Won the 1948 Election, which won the Chicago Tribune Heartland Award, and Peace Be Upon You: The Story of Muslim, Christian, and Jewish Coexistence (2007), which examined the forgotten legacy of peace among the three faiths. In 2003, the World Economic Forum designated Karabell a "Global Leader for Tomorrow." He sits on the board of the World Policy Institute and the New America Foundation and is a member of the Council on Foreign Relations. He is a regular commentator on national news programs, such as CNBC and CNN, and has written for The Wall Street Journal, Newsweek, Time, The Washington Post, The New Republic, The Los Angeles Times, The New York Times, and Foreign Affairs.

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