The Real Goal of Paul Ryan's Budget

Representative Paul Ryan’s Republican budget provides plenty of lines of partisan engagement this election year, including its call for a “full” repeal of the Affordable Care Act, its embrace of a form of “dynamic” fiscal scoring, and its revival of the battle over turning the Medicare system into a voucher-like program.

This austere plan is to be formally adopted by Ryan’s Budget Committee on Wednesday. But to achieve its envisioned cut of about $5.1 trillion in spending and a balanced budget by 2024, the document includes what appear to be a number of merely philosophical, aspirational, and even fantastical underpinnings.

The reality is that no one expects this budget document that pushes higher defense spending—and cuts and changes to Medicare, Medicaid, food stamps, and other social-safety-net programs—really has any chance of becoming law. The Senate won’t take it up; Democrats who control the chamber aren’t even doing a budget of their own.

Even Ryan admits that the proposal has no practical impact right now, as appropriators from both parties aren’t focusing beyond fiscal 2015. And spending levels for the next fiscal year starting in October have already been set under the two-year deal the Wisconsin Republican worked out in December with Democratic Senator Patty Murray, chair of the Senate Budget Committee.

But all of that is not necessarily the point.

Rather, this longer-term spending proposal is more an exercise by Republicans to provide voters a road map, of sorts, of what they would do if they were totally in charge. Or, as Ryan said on Tuesday: “We also think it’s important to show our vision as a party for the future.”

Perhaps the budget that Ryan’s committee will mark up is really an accurate depiction of that GOP vision. Who knows?

The truth is, there is little political risk in throwing out ideas and principles, since Republicans know there is no immediate possibility of enactment. And seeing things through, as of late, has been a bit of a problem for House Republicans on a few other difficult budget matters where they ultimately retreated from their earlier positions.

For instance, many Republicans were unable last year to swallow some of the cuts to non-defense discretionary spending called for in a previous Ryan budget. Later, the ink wasn’t dry on a cut to military pensions, passed as part of the December budget agreement with Murray, when Republicans rushed to join Democrats in undoing the cut. And last month, just hours after President Obama unveiled his own fiscal 2015 budget plan to GOP catcalls about taxes and spending, scores of House Republicans joined with Democrats in voting to weaken reforms they had passed in 2012 to save billions of dollars in federal flood-insurance costs.

Yet, with this new Ryan budget plan, it seems, the GOP budget-cutting imagination is once again unleashed to run wild.

Sixty-two House Republicans opposed the Ryan-Murray deal, ostensibly because it did not seem to cut spending fast enough, though it was pegged specifically only to the 2014 and 2015 fiscal years. As Ryan explains it, however, that was a “small, narrow agreement,” and he says he is not so much worried about similar internal GOP opposition to “this much bigger picture” that “does show a path to balancing the budget.” The federal government is now about $17.5 trillion in debt.

Some 40 percent of the $5.1 trillion in savings envisioned in Ryan’s “bigger picture” of the next 10 years is depicted as coming through a full repeal of the Affordable Care Act. In all, his plan would spend about $42.6 trillion over 10 years, compared with about $47.8 trillion under existing policies.

At the same time, Ryan’s budget does not say precisely what he would replace Obamacare with, only offering the expectation that it will be replaced. And Democrats, like Budget Committee ranking member Chris Van Hollen of Maryland, complain that Ryan’s proposal, even while scrapping the health care law, keeps all of its more than $700 billion in Medicare savings, as well as $1 trillion in revenues from Obamacare.

Ryan and the second-ranking Republican on the Budget Committee, Tom Price of Georgia, say that what they are really doing is stopping a “raid” on Medicare funding under the Affordable Care Act, and keeping the money inside the program. And comprehensive tax reform, they say, would replace some of the related taxes.

But on that point—a tax-code overhaul—Ryan’s budget does not lay out a detailed plan or even embrace a recent one proposed by Ways and Means Chairman Dave Camp of Michigan. Rather, it simply calls for reducing taxes on the wealthy—individuals would have just two rates, 25 and 10 percent—and cutting the corporate tax rate to 25 percent.

Ryan’s plan would abide by the split agreed upon with Murray in spending levels between defense and non-defense programs for fiscal 2014 and 2015. But his longer-range military spending would blow past that deal. Military spending through 2024 would actually be increased by $483 billion over a cap established in 2011, and to pre-sequester levels—$274 billion more than requested by the president. Meanwhile, non-defense spending would be cut by $791 billion.

To reach balance in 10 years, Ryan’s plan embraces a controversial “dynamic scoring” notion that there would be some positive impact on the nation’s economic growth simply by reducing the deficit and cutting spending—although some economists disagree with this and even suggest that it could slow the economy. Ryan had not included such a calculation in his previous budget proposals.

Ryan proposes turning more control of Medicaid and food stamps over to states—an annual proposal that some say would save money but has been a popular election-year target for Democrats.

The plan also retains Ryan’s idea for each Medicare recipient to choose from a list of coverage options and payments that would “best suit his or her needs,” and then payments would be made directly to that plan. Longer term, the proposal discusses giving seniors who first become eligible when turning 65 on or after January 1, 2024, a choice of selecting private plans alongside the traditional fee-for-service Medicare program.

Ryan insists that this is not a “voucher system,” a phrase that some Democrats see as potential attack ammunition on the campaign trail. Van Hollen told reporters: “The voucher plan is back!”