The Ryan Budget Plan is a Start, but Only a Start

The Republican budget plan that Congressman Paul Ryan introduced last week, which is headed for a House vote Thursday, has been predictably met with a polarized response. Those on the left have cried that such a plan would destroy social programs and blow a hole in the deficit, while those on the right have said that this plan offers a bold way to strengthen the economy, reign in spending, and take on entitlements.

Both sides are in fact correct. And because both sides are correct, the plan is a first step – but only a first step – towards solving the entitlement problem.

The Ryan plan undoubtedly gives Republicans a platform from which they can provide a contrast to President Obama and the Democrats’ ideas on the budget, entitlement reform, and debt and deficit reduction. Republicans can now say that they are putting forward actual solutions to the nation’s fiscal problems, repudiating the Democrats’ attack that they have only rejected President Obama’s initiatives without proposing ideas of their own.

However, it is unclear how strong of a platform the Republicans have. Their cuts to social programs are very extreme, somewhat unrealistic, and likely to not be supported by a vast majority of the American public. They dangle lower tax rates without specifying which tax credits and loopholes they will eliminate to make up for lost revenue. And the Ryan plan will in fact increase the deficit after ten years.

Meanwhile, the Democrats have largely avoided taking a serious approach to entitlement reform and balancing the budget. Despite what Obama senior advisor David Plouffe said on last Sunday’s morning talk shows, the President did not really embrace the Simpson-Bowles deficit reduction plan, and has not yet committed to fiscal discipline and achieving a balanced budget.

Thus, both the Republicans and Democrats are at fault for the lack of a real plan to take on entitlement reform and deficit reduction thus far. But Congressman Ryan deserves credit for his willingness to take on these serious issues, and his ideas should certainly be included in the dialogue and debate going forward.

Ryan is one of the few politicians in Washington who has acknowledged that debt and deficit reduction and entitlement reform need to be addressed immediately, even though such reductions will be painful and politically unpopular.

Indeed, Ryan ’s plan has some strong ideas that are certainly responsive to our country’s fiscal situation and could well help get the economy back on track. He simplifies the tax system by reducing the number of tax rates from six to two, and offers a fairer system by eliminating deductions and loopholes that favor special interests. He reduces the corporate tax rate – something Obama has said he would support if it were put with other reforms – and eliminates certain subsidies.

Ryan’s budget also offers a starting point for reducing the size and scope of government. Given the realities of our country’s fiscal situation, this is a concept now supported not just by Republicans, but also by many independents and even some Democrats.

Yet the Ryan plan, which would cut federal spending by $5.3 trillion over the next decade, puts forth a budget path that is unrealistic and extreme, with draconian spending cuts that would ultimately make the government incapable of meeting its essential responsibilities. The budgetary plan would implement cuts that would disproportionately hurt the poor, middle-income families, and senior citizens by drastically reducing key domestic programs such as Medicaid, college grants, job training programs and food stamps. Medicaid specifically would be cut by about 45 percent, leaving 19 million people without care.