The Budget Wars: Why Obama and the GOP Are Light-Years Apart

If it seems like Republicans and Democrats are on different planets with their approach to budgeting, it's because they really are providing answers to completely different questions.

"This isn't just about math, this is a cause," Republican Rep. Paul Ryan told the audience at the American Enterprise Institute this morning, on the release of 2013 budget. And he's absolutely right. Budgets aren't just a mess of paragraphs and numbers. Budgets are statements of values. They tell us what our leaders think is important for the country.

The Ryan budget released this morning has some very clear ideas about what is important for the country. Reducing government health care spending is important to Ryan. Cutting taxes is important. Shrinking non-defense discretionary spending to the size of a peanut is important. That's why Ryan's budget slashes Medicare spending by partially privatizing the program one year after proposing wholesale privatization. It's also why he aims to cap tax revenue at 19 percent of GDP for the next 40 years. It's why his plan aims to reduce non-health, non-Social Security spending to 3.75% of the economy by 2050, which would mark its lowest share in more than a century.

The Obama budget released a month ago had very different priorities. Expanding insurance was an obvious value for the administration, which happens to commemorate the second anniversary of health reform this week (quietly, since the law is still pretty unpopular). Raising taxes on the rich to maintain our social programs is important. Investing in manufacturing, education, and infrastructure is important. That's why Obama's budget excludes the "bottom" 98 percent from tax hikes and raises spending in key areas while reducing subsidies for oil and gas.

Ryan's budget answers the question: What's the best way to reduce the deficit by cutting government health care spending without doing something too unpopular? Obama's budget answers the question: What's the best way to pay for the social programs we have and the job investments we need? I'm not going to be able to convince you that one of these questions is "better" than the other. It's enough to say that they represent very different values. If it seems like Republicans and Democrats are on different planets with their approach to budgeting, it's because they really are providing answers to completely different questions.

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It's fair to have different values. It's fair to ask different question of our parties, and leaders. But outcomes matter. And the outcome of Ryan's budget is lower taxes on the rich offset by lower government spending on programs that disproportionately benefit the poor, elderly, and sick. Repealing Obamacare and cutting Medicaid and CHIP would reduce government health care spending dramatically -- as you can see in the chart below -- but with the sure consequence that millions of poorer families would go without insurance, barring some separate revolution in the private health care market. (On the bright side, our debt would plummet as a share of GDP.)
 

By contrast, there are some perfectly smart reasons to oppose the White House budget. It doesn't do enough to reduce the deficit. Rather than reform the tax code, it raises taxes on a fraction of the population. It creates new stimulus programs that Republicans would never support without offering entitlement reforms. It pays for new infrastructure projects with "savings from the Iraq war," which, like I said, is a clever bit of parallel-universe budgeting, like me paying for a new suit with "savings from not going to Atlantic City tomorrow."

It comes down to the government you want. There is no way for me to finish this paragraph in a way that will sway your deeply held beliefs about what Washington should do, or what we should pay for it. Both of these budgets are occasionally unrealistic. Both budgets are, to a certain extent, political documents. But only one maintains our commitment to insuring the entire population while acknowledging that revenue increases aren't an optional part of deficit reduction. And only one does not pay for tax cuts for the rich by cutting medical support for the poor and sick. And that's the budget from the guy in the White House.

Source: Reuters