Ryan Criticizes Obama Budget, “Ducking Responsibility”

The Republican budget committee chairman in the House of Representatives criticized President Barack Obama on Sunday for “not leading” and “ducking responsibility” for the nation’s fiscal problems. His administration “isn’t even trying” to reduce the deficit, Paul Ryan said.

On NBC’s Meet the Press last week, the president’s chief of staff argued that “the time for austerity is not today” because fiscal restraint would imperil the economic recovery. Democratic proponents of continued deficit spending point to Greece as an example of what happens if a government cuts back too fast.

Ryan begged to differ. He warned on the same program this Sunday that if America doesn’t rein in spending soon, “it gets ugly, like Greece, and then you have to impose the kind of austerity that they’re imposing in Greece.”

The congressman from Wisconsin championed tax reform besides deficit reduction in order to fuel economic growth and “actually get more revenues into the government that way.” However, he was critical of extending a temporary payroll tax cut that was part of the president’s original stimulus package.

These temporary sugar high economics, these stimulus effects just don’t work to grow the economy and they’re a very poor substitute for lowering tax rates, for having predictable regulations, for getting rid of crony capitalism, for addressing the real drivers of our debt which would do so much more for our economy.

The Republican budget that Paul authored and was enacted by the House majority last year would have reduced federal spending relative to current projections by more than $6 trillion over the coming decade compared to $4 trillion under the president’s plan. The latter includes $1 trillion in “savings” achieved by ending the wars in Afghanistan and Iran however; a gimmick according to Republicans because neither conflict was ever expected to last for another ten years.

The president doesn’t question the need for fiscal consolidation in the long term but believes in a “balanced approach” that also reduces the deficit by raising taxes on the wealthy.

Democratic congressman Chris Van Hollen, who appeared on Meet the Press besides Ryan, similarly argued that there is no question “about whether or not we should reduce the long-term deficit. It’s how,” he said.

The Republicans’ approach, according to Van Hollen, is tilted in favor of the rich. “They want to take it all out on middle income Americans,” he said, “because they do not want to ask folks at the very high end to pitch in.”

Republicans have rejected tax increases and proposed to privatize Medicare, which finances health care for seniors, for future generations. Democrats do not want to reform entitlements even, as Paul pointed out, they are willing to ration care in an effort to reduce costs.

Republicans Reject Tax Hike for Millionaires

Republican lawmakers on Sunday rejected President Barack Obama’s call to raise taxes on the wealthiest of Americans and argued that business taxes should be cut instead to stir economic expansion and job growth.

House budget committee chairman Paul Ryan, a Republican congressman from Wisconsin, characterized the president’s proposal, which was reported by The New York Times over the weekend, as “class warfare” which “may make for really good politics,” he said, “but it makes for rotten economics.”

Ryan, who put out his own plan for tax reform this week, warned on Fox News Sunday that increasing tax rates could reduce tax revenue. “If you tax job creators more, you get less job creation,” he suggested. “If you tax investment more, you get less investment.”

The Republican plan, by contrast, would eliminate tax loopholes and exemptions and lower the corporate tax rate from 35 to 25 percent which approximates the average rate among industrialized nations.

Several Republican presidential contenders also support eliminating taxes on dividends altogether, something Ryan described as a “double tax” on Sunday.

A person who’s paying an income tax is paying the first level of tax on that money and then when you pay capital gains and dividends tax, you are paying that tax again on that money that earns it.

The president argues that raising taxes on millionaires and billionaires merely asks them to contribute their “fair share” to fiscal consolidation but according to Ryan, it is a plan that “seeks [to] prey on people’s fear, envy and anxiety.”

We need a system that creates job and innovation and removes these barriers for entrepreneurs to go out and rehire people.

The Republican leader in the Senate, Mitch McConnell, agreed. “We don’t want to stagnate this economy by raising taxes,” he told NBC’s Meet the Press. He pointed out that even members of the president’s own party are wary of raising taxes while the economy is still in recession.

“The way you get more revenue,” said McConnell, “is getting the economy going.” To do that, he urged the Obama Administration to constrain its regulatory zeal.

Right now, we’ve thrown a big wet blanket over the private-sector economy. We borrow too much, we spent too much, we’re dramatically overregulating every aspect of the private sector in our country and now we’re threatening to raise taxes on top of it! That’s not going to get the economy moving.

Nearly one out of ten American workers is unemployed and the federal government is projected to spend $1.6 trillion it doesn’t have this year. To close the fiscal gap, President Obama is expected to recommend long-term spending cuts on Monday besides the tax increase that was reported this weekend as part of what he believes is a “balanced approach” to deficit reduction.

American Politics Divided on Growth Strategy

Despite an agreement to raise the nation’s legal debt limit in conjunction with future spending reductions, the major political parties in the United States remain deeply divided over the question how to best stir economic growth. Democrats have suggested more stimulus and tax hikes whereas Republicans insist on austerity. The political gridlock was cited by Standard and Poor’s as a reason for downgrading America’s creditworthiness last week. The two parties have blamed each other for the unprecedented move.

Senator John Kerry of Massachusetts, a former Democratic Party presidential candidate, blamed the downgrade on the Tea Party, a conservative minority in the House of Representatives that pushed for trillions in budget cuts but refused to consider revenue increases. Their intransigence “countered even the will of many Republicans in the United States Senate, who were prepared to do a bigger deal,” he said on NBC’s Meet the Press.

Some of these congressional freshmen, Kerry added, were actually willing to risk a default.

The almost inevitable downgrade of America’s credit rating by Standard and Poor’s also reminded Washington that its current deficit reduction plans fall short of balancing the books in the long term. Kerry recognized that the federal government would have to enact more than $4 trillion in deficit reduction over the next ten years to assure markets. But he also championed additional stimulus spending on infrastructure to save and create jobs.

Although private-sector hiring in July was slightly up, unemployment is still over 9 percent while millions of Americans are only able to find a part-time job.

Republican congressman Paul Ryan of Wisconsin — who chairs the House budget committee and is the architect of the opposition’s plans for fiscal consolidation — rejected another “demand sided” stimulus on Fox News Sunday which he believes could only resuscitate the economy, not hasten its recovery. Instead, he urged entitlement and tax reform to boost America’s competitiveness.

Ryan pointed out that unlike the president’s party, Republicans “passed a budget that would make debt peak in two years at 74.5 percent of GDP” and reduce the debt burden on the economy thereafter. “We put out a plan, very specific plan to address the situation, pay off the debt, balance the budget, reform the tax code to create jobs in the economy,” he added.

Unfortunately, our partners on the other side of the aisle, the president and the Senate, have always been unwilling to put a specific plan out there to address entitlements, specifically health-care entitlements.

By 2021, more than 50 percent of federal spending would have to be allocated to public pension and health support programs, according to the Congressional Budget Office. Along with defense, interest payments on the debt and unemployment insurance, it would be nigh impossible for the federal government to continue to finance other domestic programs unless taxes are raised substantially.

The largest entitlement programs could not be solvent for the next generation unless they are significantly reformed soon. Medicare, which finances health care for the elderly, is expected to run out of money in 2024 while Medicaid, which subsidizes health care for the poor and is paid for through the states, is increasingly crowding out investment in other areas, including education and infrastructure.

The Social Security trust fund is projected to last until 2036 but once it is depleted, the annual payroll taxes that pay for the program will only be sufficient to cover 75 percent of the retirement benefits it is required to pay seniors.

Former Federal Reserve chairman Alan Greenspan previously expressed support for Ryan’s budget plan, noting that with government borrowing over a third of what it spends, to find reductions, lawmakers should look for “not individual, piecemeal cuts or taxes,” but reconsider whole programs instead.

This Sunday, he stressed that the country would not be able to solve its debt problem without pain. “Cutting back on government spending will cause some contraction in economic activity,” he admitted. But tax increases could curtail growth even further.

The old central bankers also warned last year that businesses would not be likely to hire and expand “unless and until we can begin to lift [the] pall of uncertainty.” He reiterated that sentiment on Meet the Press this weekend.

“The evidence is reasonably strong,” Greenspan said, that as a result of new regulations, especially for the financial industry, corporate America is sitting on a pile of cash “in excess of $500 billion in liquid assets held in nonfinancial corporations” that it would invest if it had more confidence. Because it fears more state activism from the incumbent administration though, that capital is not put to work.

The Economics of $350 Wine

One economist and the leftist commentary website Talking Points Memo are outraged that Republican congressman Paul Ryan of Wisconsin, who drafted the opposition’s 2012 budget proposal which included deep spending cuts and the partial privatization of health-care support for the elderly, should have ordered two expensive bottles of wine in a Washington DC bistro Wednesday night.

The economist told Talking Points Memo that she was “stunned” to see the congressman and his guests buy two bottles of wine which each sold for $350 at the establishment. “I was an economist so I started doing the envelope calculations and quickly figured out that those two bottles of wine was more than two income working family making minimum wage earned in a week.” She was angered to see Ryan consuming hundreds of dollars in wine while Congress was in the midst of intense debates over whether to cut seniors’ safety net.

Ryan — who apparently didn’t know that the wine was so expensive — properly paid $472 for the drink and his meal and included a generous $80 tip.

Why is this story relevant? Because it plainly shows the left’s ignorance of basic economics. The instinct, that a wealthy congressmen shouldn’t order $350 bottles of wine while families all across America are suffering, is understandable but it’s also misguided. That wealth “trickles down” is a theory that leftists have never accepted but from the trivial example of Ryan’s dinner last week, it’s obvious that it’s true.

The extravagances of millionaires, whether it’s exclusive wines, private jets, yachts or designer clothes, provide income and employment for an exponential number of ordinary people. Imagine if, at a time of crisis, the rich would stop spending money on luxury items. There would be even higher unemployment and even less private-sector growth! Imagine if Congressman Ryan hadn’t dined at that Washington bistro on Wednesday night. The restaurant, its wine supplier and the producer would not only not have made fat profits on those two bottles; the waiting staff would have missed out on a big $80 tip.

If you’re serious about “stimulating” the economy, don’t tell the rich to give up on their luxuries. They should buy even more expensive wines!

Democrats Would Let Medicare Go Bankrupt

Democrats have predictably resorted to “Mediscare” in their attacks on Congressman Paul Ryan’s plan to reform America’s popular health support program for retirees, claiming that it would deny seniors the “bedrock promise” of affordable care even though people currently in or near retirement aren’t affected and warning that it would leave seniors “no choice” but to buy insurance of the private market, as MSNBC anchor Rachel Maddow put it on Thursday, even if choice is precisely what Ryan’s plan introduces contrary to the current one size fits all government program.

Despite Democrats’ demonization of Paul Ryan, and some Republicans’ unwillingness to stand by him, his plan is currently the only one written by any politician that would save Medicare from bankruptcy.

Last week Medicare’s trustees warned that the program will run out of money in 2024 — five years earlier than they projected last year.

Once the main trust fund is depleted, revenues from Medicare taxes will initially be enough to cover 90 percent of expenses but that share will decline to 75 percent by midcentury, then rise to 88 percent by 2085. Read more “Democrats Would Let Medicare Go Bankrupt”

American Seniors Favor Ryan Plan

A recent Gallup poll found that more American seniors support Paul Ryan’s reform plan for Medicare than they do the president’s.

48 percent of those over the age of 65 favor the Wisconsin congressman’s approach that would privatize the program and entitle people to “premium support” or vouchers with which to buy health insurance on the private market. 42 percent support Barack Obama who has promised that he will not leave seniors “at the mercy of the insurance industry.”

You wouldn’t know it listening to Democrats though. They say the Ryan plan “ends Medicare as we know it” and claim that more seniors would “suffer and die” as a result of it.

In al local newspaper, New Jersey Congressman Steve Rothman forecast “suffering, pain and terror” for tens of millions of seniors this week. “Where would they turn?” he wondered. “Charity? Family members? Early death? And why?”

Rothman acknowledged that the country faces an unprecedented fiscal crisis and believes that “all options should be on the table” — except reforming Medicare.

He notes that under the Republican plan, “the average senior would see their out of pocket health-care costs double to $12,150 per year, $6,400 more than today,” which is real money but far from condemning them to early death.

“Medicare is an essential and successful American program that has worked extremely well for the past 46 years,” according to Rothman but it won’t anymore. The Congressional Budget Office predicts that before the end of this decade, Medicare will have bankrupted itself unless significant reforms are enacted.

In the demonization of Paul Ryan, Democrats won’t let facts stand in the way of scoring political points. They are trying to convince retirees that Republicans intend to take their health care away even though the Ryan plan wouldn’t change a thing for people over the age of 55. They are pretending that America won’t need to rein in entitlement spending even as the explosive growth of Medicare and Social Security is utterly unsustainable, if only because Americans live longer than they did half a century ago when these programs were created.

Paul Ryan’s plan has its shortcomings and doesn’t even attempt pension reform yet. For all the Democrats’ demagoguery, nearly half of all seniors fortunately realize that it may be the only way to preserve health support for the elderly well into the future.

Ryan’s “Extreme” Budget Takes Center Stage

With a government shutdown over this year’s budget narrowly averted, Washington turns to fight over spending in 2012. House Republican Paul Ryan, who chairs its budget committee, has proposed to cut more than $6 trillion in federal spending over the next ten years, including $4.4 trillion in cuts compared to the president’s budget.

Barack Obama’s 2012 budget was criticized by fiscal conservatives for its utter lack of entitlement reforms. The major health care and unemployment support programs account for the bulk of federal spending. Their costs are expected to skyrocket in years ahead unless their scope is significantly reduced.

By 2021, more than 50 percent of federal spending would have to be allocated to Medicaid, Medicare and Social Security alone. Along with defense, interest payments and unemployment insurance, it would be nigh impossible for the federal government to continue to finance education and other domestic programs unless taxes are raised substantially.

Ryan’s budget would transform Medicare for the elderly in a “premium support” program which subsidizes retirees’ health plan of choice. “We want to have comprehensive Medicare plans available to future seniors that they can pick from and have these plans compete against each other for their benefit,” he told NBC’s Meet the Press this Sunday. By introducing competition, such a reform measure would encourage health-care providers to enhance quality while reducing inefficiencies and costs.

The Congressional Budget Office has warned that unless Medicare is reformed, it could go bankrupt before the end of the decade. “Our goal is to repair the safety net,” Ryan said in response to criticism that his budget would cut benefits; “make it more sustainable.”

The growth of Medicaid, the health support program for the poor, would be reduced by block granting spending to individual states, forcing them to rein in costs however they see fit. “They will have more money over time than what they have now; it’s just the level of growth in those programs” that is affected, said House Majority Leader Eric Cantor on Fox News Sunday.

We believe that if you put in place the mechanisms that allow for personal choice as far as Medicare is concerned, as well as the programs in Medicaid, that we can actually get to a better result and do what most Americans are learning how to do, which is to do more with less.

Democrats have been skeptical and so far unwilling to reform entitlement programs that are popular with their millions of beneficiaries. Former House speaker Nancy Pelosi professed last year that reform should do “what is right for our seniors, who are counting on the bedrock promises of Social Security and Medicare.” Senate Majority Leader Harry Reid in January described Republicans’ efforts to repeal the president’s health reform law as “a gesture in futility” even as health-care costs are mounting faster than other expenditures.

According to senior White House advisor David Plouffe, who was Barack Obama’s campaign manager during the 2008 election, the president’s commitment to deficit reduction is “absolutely firm. But while we do that,” he told ABC’s This Week, “we’ve got to make sure that we are not hurting our ability for our people to get the education they need to compete with people in Beijing and Bangalore; that we are investing in research and development; that we’re investing in infrastructure.”

Balancing the budget requires a “balanced approach,” said Plouffe. “Certainly the wealthiest in this country are going to have to contribute something.”

Under Ryan’s plan, by contrast, “the average millionaire in this country would get at least a $200,000 tax cut while the average senior down the road is going to pay $6,000 more in health costs.” Republicans would lower both corporate taxes and the top income tax rate from 35 to 25 percent in a measure designed to stir investment and economic growth.

On the same program, conservative commentator George Will offered a different perspective. “This extreme plan by Paul Ryan,” which is how opponents have labeled it, “envisions over the next decade a 34 percent increase in federal spending. It envisions adding trillions of dollars to the national debt.” And it would only barely balance the budget by 2021.

Spending Cuts to Combat Moral Decline

In defense of his plan to cut some $4.4 trillion in federal spending over the next decade, Wisconsin Republican Paul Ryan said at the American Enterprise Institute today that America is at a “tipping point” in its debt crisis. Unless serious spending reductions are enacted soon, he warned, it could “curtail free enterprise” and hasten both a moral and political decline “as dependency and passivity weaken the nation’s character.”

The Republican spending plan introduced by Ryan would achieve some $4.4 trillion in cuts from the president’s budget over the next ten years. It includes $6.2 trillion in deficit reduction over the same period compared to the administration’s proposed $1.1 trillion.

Barack Obama’s budget was criticized by fiscal conservatives for its utter lack of entitlement reforms. The major health care and unemployment support programs account for the bulk of federal spending. Their costs are expected to skyrocket in years ahead unless their scope is significantly reduced.

Ryan’s budget would transform Medicare for the elderly in a “premium support” program which subsidizes seniors’ health plan of choice. By introducing competition in the scheme, such a reform measure would encourage health-care providers to enhance quality while reducing inefficiencies.

The growth of Medicaid, the health support program for the poor, would be reduced by block granting spending to individual states, forcing them to rein in costs however they see fit.

The chairman of the House budget committee has consistently championed more choice for citizens as a way to combat the entitlement mentality which he fears is wrecking the very nature of the American experiment. Read more “Spending Cuts to Combat Moral Decline”

Ryan Previews Republican Budget Proposal

Republican congressman Paul Ryan, chairman of the House budget committee, is expected to propose his federal budget for the fiscal year 2012 on Tuesday. He appeared on Fox News Sunday two days earlier with a preview.

According to Ryan, his budget would cut spending by more than $4 trillion over the next ten years. The president’s budget, by comparison, foresees some $1.1 trillion in deficit reduction over the same period of time.

This year alone, the federal government is set to spend $1.6 trillion it doesn’t have on a budget of $3.7 trillion. Unless serious spending reductions are enacted, the Congressional Budget Office estimates that by 2021, the national debt will have swollen to equal 100 percent of GDP.

President Barack Obama’s budget was criticized by fiscal conservatives for its utter lack of entitlement reforms. The major health care and unemployment support programs account for the bulk of federal spending. Their costs are set to skyrocket in years ahead unless their scope is significantly reduced.

Ryan’s budget would transform Medicare for the elderly in a “premium support” program which subsidizes seniors’ health plan of choice.

The growth of Medicaid, the health support program for the poor, would be reduced by block granting spending to individual states, forcing them to rein in spending however they see fit. “We’ve had so much testimony from so many different governors saying, give us the freedom to customize our Medicaid programs; to tailor for our unique populations in our states,” said Ryan. The Republican plan would give them the freedom to do so.

Americans over the age of 55 would be exempt from Ryan’s proposals but he warned that unless entitlements were reformed soon, heavier austerity measures akin to those enacted in Europe would become a necessity. “Then you have cuts to current seniors, tax increases that slow down your economy,” he warned.

By addressing the drivers of the debt now, we do it in a gradual way. We can guarantee the mission of health and retirement security, not just for current generations but for future generations.

“That in and of itself will help us grow the economy today and create jobs,” the Wisconsinite added.

Ryan’s budget would further cap the growth of discretionary spending and reform the tax code. “Pro-growth tax reform is a key ingredient to getting this economy working again.” He volunteered no details but did suggest that taxes could be simplified and corporate welfare in the form of exemptions for specific industries might be cut.