Congressman Paul Ryan created a Roadmap for America’s Future, which aims to fix our fiscal situation by tax and entitlement reforms. While President Obama and many democrats opposed the plan’s changes to Medicare/Social Security/tax stuff, both Obama and his budget director conceded the plan was serious and thoughtful. The Congressional Budget Office scored the proposal, and said it would cut a lot of spending, and could reduce our debt greatly.
Yet, the Tax Policy Center looked at Ryan’s proposal and said the large tax cuts would prevent the plan from achieving its revenue goals. The plan cuts a lot of spending, but gives a lot of it away in the form of tax cuts, rather than using it to fix the debt. Relying on TPC analysis, Nobel Prize economist Paul Krugman wrote a scathing Op-Ed, calling Ryan a charlatan and fraud because the CBO only scored the spending side of his bill, not the revenue side. But, as Megan McArdle and TPC both mention, that’s how CBO works, and there was nothing odd about the proposal’s scoring. CBO measures the costs associated with a bill, not the revenues.
Almost every official in federal politics talks about our fiscal problems, but they don’t offer real solutions. Conservatives talk about deficits, but won’t say what spending they would cut. Liberals talk about robust programs, but won’t be straight with voters about the costs. But, Paul Ryan has gone remarkably far toward solving the problem. If he scales back the tax cuts (it might have to be a lot), maybe includes a few more programs to find and eliminate waste (DOD?), this could really be the solution.
And why shouldn’t it be? He’s removing tax-breaks and loopholes that don’t make a lot of sense, the removal of which will allow us to lower tax rates and keep the same tax base and progressivity. He’s transitioning us away (slowly, fairly and responsibly) from wildly expensive programs, whose services the middle class doesn’t need, and whose costs our grandchildren shouldn’t pay.
Most politicians who believe that global warming exists, and is man-made, believe our government must turn toward sustainable policies that hand a better world to our grandchildren. Paul Krugman has expressed those beliefs passionately. But to the extent there is factual controversy about global warming and human causation, there are no such controversies about the perils of national debt. How can the dream of sustainable American life extend to environmental sustainability and not fiscal sustainability? Why doesn’t Paul Krugman care more about this, or offer an alternative? It’s shouldn’t just be name-calling, and certainly not at Paul Ryan.
Not only have I not heard any other plan to solve these spending problems, I can’t imagine a plan without these cuts to entitlements and some kind of tax reform. Maybe the tax rates should be higher or lower, but that seems like the easier part of this problem. Maybe I’m wrong. Maybe Paul Ryan knows that his Roadmap will never work without tax cuts to grease the way. Maybe his math was wrong and he thought his goals could afford more tax cuts. Maybe he is sneaky and hid these cuts in there. But, if we created a spending solution and knew what spending had to be cut, we could lay out exactly how much deficit/debt could be eliminated at each tax rate. We could then have a simpler debate about paying down the debt v. current tax rates. Even if Ryan’s plan were perfect, we’d still have to fight about taxes all the time.