The Republicans on the Senate Budget Committee have a new chart out today that really clarifies what President Obama’s budget will mean for future national spending priorities. Under Obama’s budget, interest payments on debt will exceed national defense spending by 2019:
The reason for this is that under Obama’s budget, rapidly growing debt would lead to higher interest payments, and substantial cuts to the defense budget would cause defense spending to increase at a slower rate.
House Budget Committee Chair Paul Ryan’s latest budget plan includes a few deviations from last year, most notably to his Medicare reform proposal. Last spring, Democrats assailed Ryan and House Republicans for trying to “end Medicare” — a charge so false and prevalent that PolitiFact named it the “Lie of the Year.”
But the attacks from Democrats still hit their mark, and the new plan is a bit milder. Ryan still proposes a system in which senior citizens could purchase private insurance plans with Medicare vouchers. But this time around, he preserves the option for seniors to choose the public plan.
Today Paul Ryan, chairman of the House Budget Committee, released his budget. (For the full budget, see here; and for a summary, see Ryan’s Wall Street Journal op-ed here). About this remarkable document, I want to say two things.
The first is that Ryan’s budget does what Americans generally, and the pundit class in particular, says politicians don’t do. It tackles head on the issue of entitlements. It offers a real path to re-limiting government (over the next 10 years it cuts more than $5 trillion dollars from President Obama’s budget). It makes the “hard choices” that elected officials often avoid.
According to the AP, two of the central promises of President Barack Obama’s health-care overhaul law are unlikely to be fulfilled, Medicare’s independent economic expert told Congress today.
The landmark legislation probably won’t hold costs down, and it won’t let everybody keep their current health insurance if they like it, Chief Actuary Richard Foster told the House Budget Committee. (Foster’s office is responsible for independent long-range cost estimates.)
Mr. Foster was asked by Republican Tom McClintock for a simple true or false response on two of the main assertions made by supporters of the law: that it will bring down unsustainable medical costs and it will let people keep their current health insurance if they like it.
On the costs issue, “I would say false, more so than true,” Foster responded. As for people getting to keep their coverage, “not true in all cases.”
Foster also sided with those who argue that moving toward a defined contribution model is much more likely to keep health-care costs down than the kind of centralized, top-down price controls that are in ObamaCare.
Finally, in an exchange with Representative John Campbell of California, Foster blew up the claim that the Patient Protection and Affordable Care Act’s Medicare provisions could both reduce the deficit and extend the solvency of Medicare, as President Obama has claimed. Mr. Foster pointed out the obvious: this isn’t possible unless you double-count the savings.
“Is it legitimate to say,” Campbell asked, “that you can add a dozen years to the solvency of Medicare or that you can reduce the deficit, but it is not correct to say both simultaneously?”
“Both will happen as a result of the same one set of savings, under Medicare,” Foster said. “But it takes two sets of money to make it happen. It happens directly for the budget deficit, from the Medicare savings, and then when we need the money to extend the Hospital Insurance Trust Fund, we have a promissory note — it’s an IOU, not a worthless IOU, but it is an IOU — and Treasury has to pay that money back. But they have to get it from somewhere. That’s the missing link.”
Unraveling the false claims of ObamaCare continues apace.
Yesterday e21 and the Manhattan Institute co-hosted an event featuring Representative Paul Ryan, the new chairman of the House Budget Committee. The interview, expertly conducted by the Wall Street Journal’s Paul Gigot, lasted 45 minutes; 15 minutes were set aside for questions.
The conversation is intellectually engaging and candid, timely and quite thoughtful. But take a look for yourself.
Hugh Hewitt conducted an hour-long interview yesterday with Rep. Paul Ryan (R-WI), the new chairman of the House Budget Committee, currently in his seventh term in Congress. It is an unusually candid conversation; the transcript is worth reading in its entirety.
Ryan covered the role of the Budget Committee in the rollback of ObamaCare, the broader budget battle coming this fall, the siren song of inflation as a solution, and the relationship of all this to the next election. Here’s an example:
HH: … Jerry Brown is already figuring out how to come with a tin cup to Washington, D.C. and beg for money. What’s the message to those governors in California, Illinois, New York, where they’re broke?
PR: … Look, and no offense to Californians, but those of us from more frugal states, we’re not interested in bailing out people from reckless states. You know, the moral hazard of bailing out states who fail to get their finances under control, why would we want to do that? … States need to clean up their own messes, their own acts, in my opinion. … All we would do is just buy delay, which is painful for everybody. Plus, Washington’s out of money. I mean, 41 cents on the dollar is borrowed here. 47% of that 41 cents on the dollar comes from other countries like China and Japan. We just can’t keep going the way we are. …
HH: Are you ready for the media assault, and I use that term advisedly, when they show children without milk at school. …
PR: Yes, that’s just going to happen. And look, I’ve been around these fights before, so it’s not as if this is the first rodeo for some of us. … It’s just the entire system we have could go down in a debt crisis. You know, we really do have a fiscal disaster coming. And if we blink to these forces of status quo, then it’s over with. The worst painful thing to have occur is us not to do anything, and just go down this path, and watch this debt crisis eat us alive. …
Ryan told Hewitt why he thought Congress would not be allowed to go on “porking the place up”:
What makes me feel better this time around, Hugh, is people pay attention. People are actually paying attention to what Congress is doing. The Internet has been a great equalizer. You can no longer go to Washington and do one thing, and then go home and say you’ve done another. Your words catch up with your actions, and that is a new day in Congress that a lot of people around here just don’t recognize.
It is a critical point, made yesterday in a similar analysis of a different issue, about the changed environment in which Congress is operating. The issues are no longer played out in hallways and backrooms; they are covered by an Internet propelled by the force-multipliers of blogs, portals, and social media. It creates a revolutionary situation, reminiscent of a slogan from the 60s.
Sometimes, well-educated people can write the silliest essays. Take Boston College professor Alan Wolfe, who has written an article — “Why Conservatives Won’t Govern” — in the Winter 2011 issue of Democracy: A Journal of Ideas.
According to Wolfe:
There is much to be learned from the way Republicans behaved during the first two years of the Obama Administration. If that history is any indication, the problem will no longer be that conservatives cannot govern. We are instead in for an era in which conservatives will not govern. [emphasis in the original]
The problem with the GOP, you see, isn’t that it is cynical, because even a cynic cares. “What we witness instead is nihilism,” Wolfe writes, “and in the most literal sense of the term.”
Nihilism, we are told,
is as dangerous a political stance as one can find. Unlike polarization, it guarantees that words become divorced from any underlying reality they are meant to describe, that those watching the spectacle turn away in disgust, that tactical maneuvering replaces all discussion of substantive policy issues, and that political opponents are to be treated as enemies to be conquered. Lacking regenerative qualities of its own, nihilism can never produce new sources of political energy.
In case the point isn’t clear enough, Wolfe goes on to write:
[C]onservative nihilism poisons the soil that allows any set of ideas, liberal or conservative, to grow … a party that will not govern does not wish to replace strong government with weak and decentralized government in order to show how often the public sector fails. It instead much prefers to make it impossible for government to carry out its functions in the first place. If its political strategy is nihilistic, its ultimate outcome is anarchistic … when it comes to government, [conservatives] are as nihilistic as Abbie Hoffman. … No 1960s radical ever went as far as so many twenty-first century conservatives are going now.
All told, Wolfe used some version of the word “nihilism” more than 30 times in describing Republicans and conservatives.
The editor who allowed this essay to be published did Professor Wolfe no favors. His arguments are not only foolish; they are delusional. Read More
Chris Van Hollen, who will be the ranking member of the House Budget Committee in the new Congress, was on Fox News Sunday this morning (transcript not yet available). To no one’s surprise, I’m sure, he decried extending the “tax cuts for the rich” and raising the estate tax from its present zero to 35 percent for estates over $5 million. That, too, according to Van Hollen, was an unconscionable giveaway of $26 billion to a few thousand families who already have far more than they need. John linked to Senator Bernie Sanders’s 8 1/2 hour rant on the Senate floor on Friday in which he said, less succinctly, the same. And Peter the same day linked to Congressman Alan Grayson (soon, mercifully, to be former congressman Alan Grayson) saying, again, much the same thing. Their animus against “the rich” is palpable and their adherence to the principle of high taxes on the rich (which dates back to Karl Marx in 1848) is religious rather than rational.
I carry no brief for “the rich,” although I’d be happy to be counted among them. But this all reminds me of a conversation I had many years ago with a close friend, now gone, on this subject. She was very liberal. (How liberal? In 1948, she not only voted for Henry Wallace; she went to the convention and worked in his campaign. That’s liberal.) I proposed a thought experiment. “Suppose,” I said, “there were an economic magic bullet — that if Congress would pass the necessary legislation and the president were to sign it, the effect would be to double everyone’s real take-home income. If you were living on $50,000 this year, you’d have $100,000 to spend next year.”
“Sounds great,” she said.
“But there’s a catch,” I answered. “The effect of the magic bullet would not double the take-home income of those earning over $1 million — it would quintuple it. In other words, the rich would make out far, far better than the average Joe. But there’s no way out, it’s all or nothing. Would you vote for the magic bullet if you were a member of Congress?”
“Certainly not!” she indignantly replied.
“Fine,” I said. “Now it’s six months later and you’re running for re-election. A constituent comes up to you and says, ‘I’m an English teacher at the local high school. I take home $50,000 a year. I have a daughter who needs serious orthodontics that’s not covered by insurance, my son has learning disabilities and has to be tutored, I’m driving a 10-year-old Buick that will have to be replaced very soon, and my mother-in-law will not be able to live on her own much longer. We never go away on vacation and seldom eat out. You voted against my earning an additional $50,000 a year because you objected to Mr. Bigbucks getting $5 million a year instead of $1 million. I don’t give a damn what the Rockefellers earn. I care about what I earn so I can take care of my family.’ What do you tell him, in order to win his vote?”
Her response: “It’s time for dinner.”
We have lowered the marginal rates on high incomes four times since the inception of the income tax — in the 1920s, the 1960s, the 1980s, and the 2000s. In each case, the result was a much more prosperous national economy, lower unemployment, and higher tax revenues for the government. If you do A (lower marginal rates) four times, and four times, despite differing economic circumstances, B (increased prosperity) happens, a rational person might conclude, at least tentatively, that B is the result of A. Not liberals.
As I said, high tax rates on the rich is a religious principle with the left. If the poor have to suffer because of it, so be it.
In a recent interview with Philip Klein of the American Spectator, Representative Paul Ryan spoke about the limits of the strategy to defund ObamaCare:
Obviously, I’m in favor of anything we can do to stop it, to halt it, but the problem we have is, he [Obama] has to sign those bills. I get this question every single day, ‘If you take back Congress, you have the power of the purse, just defund the thing.’ Well, yeah, technically speaking, we can put riders in appropriations bills that say, ‘No such funds can go to HHS to do x, y, or z in implementing ObamaCare.’ He’s gotta sign those things. And he doesn’t strike me as the kind of person who would sign those things. And so that means we go to a continuing resolution or something like that. So I see a lot of stalemate — not over just whether we defund ObamaCare and cap and trade and FinReg or whatever — because he’s not going to agree to our spending levels anyway. We’re going to cut spending way below where he would go. So I don’t see him signing our spending bills, which are the bills you’d have to pass into law to defund ObamaCare.
There is no more committed budget cutter on Capitol Hill than Ryan, which is why his words are worth taking into account for conservatives who, once Republicans retake the House (as I fully expect they will), insist that the GOP repair much of the damage President Obama has done. It won’t be easy — and conservatives should internalize that fact sooner rather than later. There are certain governing and political realities that cannot be wished away. Repealing ObamaCare is impossible so long as Obama sits in the Oval Office — and even defunding the Patient Protection and Affordable Care Act is going to prove to be exceedingly difficult. Those in the conservative movement who set that up as the standard of success are setting themselves and their closest political allies up for failure. Read More
On the Fox News Sunday roundtable, the panel discussed the 2012 GOP presidential front-runners. It is interesting that, aside from Sarah Palin, lesser-known Republicans seem to have gained top-tier credentials:
KRISTOL: … I think it won’t be the usual situation of nominating the next in line or the most senior person, the Bob Dole or the John McCain. So I think right now Palin is the frontrunner. We can say it’s a geological era away. It’s 17 months till Iowa. It’s not that long, you know? And she’s more — she probably has a slightly better chance than anyone else. She’s not an odds-on favorite, but she goes off with lower odds, better odds, than anyone else.
If I had to do win, place and show at this point, I would say Sarah Palin, Mitch Daniels and Paul Ryan. If I could make my trifecta bet, I think I would bet on them. But you know, there are 10 other people. …
WALLACE: Wait a minute. That’s really interesting…
KRISTOL: … who could be the nominee.
WALLACE: … because what you’re saying is, you know, that a lot of the — frankly, all of the conventional names we had on there, like Pawlenty and Romney and Barbour, you’re saying that they’re going to go for somebody that — none of the above?
KRISTOL: Look, those people could also win, and they’re impressive politicians in their own right, and have been good governors, in the case of someone like Haley Barbour. And there are senators who want to run, like John Thune. There are former governors like Pawlenty, Mitt Romney.
I just think — I don’t know. My sense is someone new, someone different, either someone who’s governing successfully, like Mitch Daniels — really a striking contrast with Obama — Paul Ryan, who will be at the center of things in 2011.
He’ll probably be chairman of the House Budget Committee if Republicans win the House. He will be articulating the Republican — he’ll set forth the Republican budget, articulating the Republican national vision against President Obama. And then Palin, who’s impressive, so — but you know, that could easily — I mean, this will shock you, but I could be wrong and one of those three will not be — will not be the nominee.
…
CHENEY: I think some of the people that Bill mentioned. I think Mitch Daniels is a clear, very interesting potential frontrunner. Paul Ryan is very interesting. I think you’ll have people who emerge after these 2010 elections as real challengers. You’ve got fascinating governors out there. Chris Christie is terrific. I think, you know, it’s impossible to sort of say it’s going to be the establishment guys.
With the Iowa caucuses (which we’ve learned aren’t very predictive of much, as Mike Huckabee can attest) well over a year away, it is nearly impossible to predict where the country, the economy, and the GOP base will be. If ObamaCare is defunded and/or repealed, does this boost the chances of Mitt Romney (whose biggest handicap is RomneyCare)? If Paul Ryan becomes the president’s chief nemesis in the new Congress, does his star rise? If Palin’s endorsees all win in 2010, does she take on an aura of invincibility — or if many of them lose, does her mojo evaporate?
The complications and permutations are endless. (And recall that Rudy Giuliani was the “front-runner” in the GOP polls until his campaign imploded and his Florida-first strategy proved to be a bust.) But we do know that the GOP base wants to offer an un-Obama. So look for a candidate who can connect emotionally with voters, advocate American exceptionalism, articulate who our enemies are, defend American capitalism, demonstrate executive acumen, point the way to fiscal sanity, and embody the values and outlook of the American heartland.
The candidates(s) who can do these things well and convince Republicans, who are desperate to recapture the White House, that they can go toe-to-toe with Obama will be at the top of the heap. And remember, many of the old rules (e.g., that a congressman can’t run, a presidential candidate has to look like a professional pol, an Ivy League background is a plus) simply don’t apply. It’s going to be one heck of an exciting ride.
Democrats wary of pushing for a “surtax” for the war in Afghanistan are tiptoeing into an argument that they may want to avoid. Steny Hoyer was the most recent example:
Hoyer said he is generally in favor of legislation that would institute a surtax to pay for congressionally mandated war efforts. But he pointed to the sagging economy as a primary reason not to levy new taxes on Americans.
Sen. Evan Bayh made the same argument over the weekend.
Well, it’s nice to see that Democrats appreciate the link between tax hikes and the recession. But wait: they’re considering hundreds of billions of new taxes as part of health-care reform. There’s no difference from an economic standpoint whether you’re “paying” for health-care subsidies for your neighbor or salaries for troops in Afghanistan. Taxes are taxes. If it’s a dumb idea to pass a surtax to pay for a war, then it’s equally dumb to pass taxes as part of ObamaCare. And come to think of it, until we’re out of the economic woods, it would be equally dumb to let the Bush tax cuts expire.
I’m not sure why Democrats have wandered into this minefield. But those opposed to hundreds of billions in new taxes — for whatever purpose — might want to collect these quotes. They may come in handy — if not in a debate, then in the 2010 elections.
UPDATE: Another Democrat joins the “Don’t raise taxes in a recession!” chorus: “House Budget Committee chairman John Spratt on Tuesday (D-S.C.) said he could not support a proposed ‘war surtax’ to fund troop increases in Afghanistan. Spratt said that the measure introduced by Appropriations Committee chairman David Obey (D-Wis.) would raise taxes during a recession, an uptick he believes the country cannot afford.”
