It's about time someone with some kind of power led and actually acknowledged what is plain: we cannot sustain our current economic pattern. President Obama has been an empty suit.

Enter Paul Ryan:

On Tuesday, House Budget Chairman Paul Ryan is expected to put out his 2012 proposed budget resolution.

His budget will give the first real indication of how House Republicans want to tackle the country's long-term budget shortfalls.

Budget resolutions, typically partisan documents, will lay out House Republicans' preferred levels of spending and revenue for 2012 and in the future.

Ryan told Fox News Sunday that his plan would cut more than $4 trillion, exceeding the targets set for the next decade by the president's bipartisan debt commission.
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How would his plan do that? "By cutting spending, reforming entitlements and growing the economy," said Ryan, who was a member of the debt commission.

Taking on entitlements: Ryan said his budget resolution would propose overhauling Medicare, the health care program for seniors, and Medicaid, which provides health benefits to the poor and disabled. Spending on the entitlement programs is one of the biggest drivers of the country's future debt.

"By addressing the drivers of our debt now ... [we will get] our debt on a downward trajectory," Ryan said. And in the process, he asserted, "we save Medicare, save Medicaid."

Under his proposal, he said spending for each of the programs would still go up every year, just not at as fast a rate as would otherwise be the case.

Ryan is the only Republican who has offered concrete proposals in the past to reform Medicare and Medicaid.

He said the proposals in the resolution would be similar to those he proposed most recently with longtime budget expert Alice Rivlin, who served as President Clinton's budget director and founded the independent Congressional Budget Office.

If history tells us anything, it is this: Democrats will not engage the proposals. Instead, they will claim Republicans want to kill Grandma, end Social Security, and help their fat cat corporate allies.

The only question is whether it will work this time. Did the American people mean they wanted change when the voted in 2010, or was it only change "if someone else" had to take a hit?

I am not over 55, so my benefits will be trimmed. You know what? I haven't seen the proposal yet, but I support it, whatever it is. Why? Because I have enough time to adjust AND because I don't believe the government is a separate entity--it is my kids and grandkids. They should not have to care for me just so I can have an easier life now.

All I can say about the President is that he has been either a coward or an ideologue on spending.

One problem I see is the Military is still some sort of sacred entity that can't be touched. I am all for a strong military but this war nonsense and bases in every other country is insane. I'm all for cutting back on the military spending as well. This is not popular among Republicans ...too bad. But this used to be a Democrat pledge that has since gone out the window. Even in Obama's promises, he seems to have dropped any mention of bringing sanity back to the military budget. One of the few Democratic "ideals" I could get behind and they too have gone over the edge in this megahuge military monster out of control!

I am retired military, and I called for a 20% budget cut in all departments INCLUDING the military. Every budget would get 20% off the current spending budget (that was never produced for 2011, What was up with that!). I think both Dems and Repubs are to blame for this, and some harsh spending cuts need to be imposed across the board. Picking and choosing what gets cut and what gets saved only punts the problem down the road.

We cannot play favorites anymore.

Now, we're talking! Watch this video and compare Ryan's leadership and fact-based presentation with the nonsense Senator Reid and President Obama spew.

I can't wait to hear the President explain why doubling and tripling the debt are mandatory or Reid tell us that Social Security is just fine, etc.

Hmm. I notice that the budget presented by Ryan includes large reductions in tax on the rich. I wonder how much would be needed in cuts if taxes were held instead?

danivon wrote:Hmm. I notice that the budget presented by Ryan includes large reductions in tax on the rich. I wonder how much would be needed in cuts if taxes were held instead?

What I would encourage you to notice instead is the Democratic reaction. Not, "Hey, what if we don't do those tax cuts?" but "Millions will die."

Demagogues. Read Obama-fan Brooks

The Ryan budget doesn’t touch Medicare for anybody over 55, but for younger people it turns it into a defined contribution plan. Instead of assuming open-ended future costs, the government will give you a sum of money (starting at an amount equal to what the government now spends) and a regulated menu of insurance options from which to choose.

The Ryan budget will please governors of both parties by turning Medicaid into a block grant — giving states more flexibility. It tackles agriculture subsidies and other corporate welfare. It consolidates the job-training programs into a single adult scholarship. It reforms housing assistance and food stamps. It dodges Social Security. The Republicans still have no alternative to the Democratic health care reform, but this budget tackles just about every politically risky issue with brio and guts.

Ryan was a protégé of Jack Kemp, and Kemp’s uplifting spirit pervades the document. It’s not sour, taking an austere meat ax approach. It emphasizes social support, social mobility and personal choice. I don’t agree with all of it that I’ve seen, but it is a serious effort to create a sustainable welfare state — to prevent the sort of disruptive change we’re going to face if national bankruptcy comes.

It also creates the pivotal moment of truth for President Obama. Will he come up with his own counterproposal, or will he simply demagogue the issue by railing against “savage” Republican cuts and ignoring the long-term fiscal realities? Does he have a sustainable vision for government, or will he just try to rise above the fray while Nancy Pelosi and others attack Ryan?

Are there any adult Democrats in office?

I'm sure you do want us to focus on the Democrats. But I want to discuss the actual budget proposals. Also, Boehner's attitude could well be compared with the other side. No compromise here either. "$33bn isn't enough" and of course the odd idea that he needs 218 Republican votes to get a budget through. So essentially if a couple of dozen Republicans don't like it, but a larger number of Democrats back it to make a House majority, he won't sign it off?

Frankly they all come across as idiots to me.

But let's get back to the actual policy proposal. How wise is it to attempt to close a deficit by including a cut on the higher rate of Income tax to 25%? I know that some people love to believe they know the shape of the Laffer Curve, but surely this will result in reduced revenue in the short term at the very least.

And, are your economic geniuses looking at what's happening to countries that have made large-scale spending cuts as opposed to those that are gradually bringing them in? The latest OECD estimates have the UK (one such country) growing slower than it's peers over the next few years. We are seeing high inflation, growing unemployment and the effects of spending cuts are having those 'unintended consequences' things, in that they seem to be hitting people at the middle and bottom of society more.

Will millions die? Don't know. We are seeing people having to wait longer for operations they need, we are seeing reductions in the number of police officers out on the beat or patrol, we are seeing reduced cover from Fire services, we are seeing care homes for the elderly close, charities that provide respite care unfunded. All of those would tend to increase the risks to people's wellbeing, health and even lives.

I wonder what Brad feels about large tax cuts for the richest with his philosophy of an across the board spending cuts to hit everyone the same. Sounds to me like some people will gain out of the budget, while many will lose out or see services they support being hit.

But hey, perhaps you need to do what we are so that people can see what the results of such policies are. The rich do fine, and don't suffer so much from spending cuts (and given that some people running banks into the ground are also very rich it's nice to see those partly culpable for the crash getting their dues), the rest of the country finds out how they actually benefit from public spending. Could be a salient lesson.

he needs 218 Republican votes to get a budget through. So essentially if a couple of dozen Republicans don't like it, but a larger number of Democrats back it to make a House majority, he won't sign it off?

He simply stated it this way because the Democrats will not vote for this. It's not him not wanting to accept Democrat votes, he's simply being a realist in what he is saying. If the Dems follow, he will of course accept their votes and work both sides of the aisle, this is getting very picky if you want to criticize his choice of words here.

and taxing the rich sounds so Robin Hood-ish
Tax the rich, give to the poor, who can argue ?

But in reality, the rich drive the economy and overtaxing the rich shuts down the economy.
Look at US corporate taxes, they are among the highest in the world. Why don't our Euro friends tax business more? You are all for taxing the rich, why not tax wealthy businesses more? US companies set up shelters outside the US by incorporating in Switzerland and other countries to avoid taxes. Same thing here, tax the rich too much (and they do pay more already) and they hide their money. There is a line, taxing "more" ...I can get behind that possibly, but the levels we keep hearing would more likely affect the economy and the total dollars coming in far worse. It's not simple math of tax more = more money coming in, it just doesn't work that simply.

I DO agree with one thing,
They are most certainly all idiots!
That part is "spot on"

We tend to have lower taxes on profits, that is true. But higher taxes on income and capital gain. I'll give you a while to think through the implications, but here's a hint: not all of the rich use their assets to generate enterprise, there is such a thimg as a rentier class

danivon wrote:I'm sure you do want us to focus on the Democrats. But I want to discuss the actual budget proposals.

Well then, please do.

Also, Boehner's attitude could well be compared with the other side. No compromise here either. "$33bn isn't enough" and of course the odd idea that he needs 218 Republican votes to get a budget through. So essentially if a couple of dozen Republicans don't like it, but a larger number of Democrats back it to make a House majority, he won't sign it off?

So, immediately you go after the 2011 budget problem--after saying you want to focus on Ryan's 2012 budget? Okay.

Frankly they all come across as idiots to me.

In one sense, I agree: the 2011 budget is $3.7T, yet they can't find a number between $33B and $61B to agree on? Even $33B is too much for some Democrats? Really?

The President is leading how exactly? I know you're not saying he is, but it is his "job" to lead, isn't it? What's he going to be doing as we're headed for a shutdown? Going to speak to Al Sharpton's group!

In New York City, Obama he won’t be wooing big-money donors, like he did last week. Instead, he will appear at the 20th anniversary of National Action Network, the group run by black activist and Obama backer the Rev. Al Sharpton.

And, remember why we are debating the 2011 budget: Democrats, who controlled all the levers last year didn't do their constitutional duty. They failed to pass a budget for the first time in 30+ years. So, any whining on their part is absolute hypocrisy.

But let's get back to the actual policy proposal. How wise is it to attempt to close a deficit by including a cut on the higher rate of Income tax to 25%? I know that some people love to believe they know the shape of the Laffer Curve, but surely this will result in reduced revenue in the short term at the very least.

That only tells part of the story. He reduces deductions as well. I think you have to look at the overall effect. In any event, rather than just dismissing it out of hand, why not view it as a starting point for negotiation? Instead, the Democrats are trying to make it out like Paul Ryan is Scrooge. From USA Today:

So don't be distracted by the shutdown sideshow. For all the noise, the cuts politicians are shouting about this week are measured in the tens of billions. The Ryan plan would cut $5.8 trillion over the next 10 years. This is the important fight.

Democrats have already begun to demonize the Ryan plan, but where is theirs? Two bipartisan deficit panels produced serious, workable proposals last year, which President Obama treated as if they had cooties. Asked Tuesday about Ryan's plan, Obama said merely that he looks forward to having a "conversation" about the parties' "sharply contrasting visions."

Attacking the Republican plan might reap short-term political rewards, but the lack of presidential leadership is distressing. Without a credible proposal of their own, it's hard to believe the Democrats understand the danger posed by the rapidly escalating national debt.

Though worthy in its ambition, Ryan's plan raises several deep concerns.

Its revenue side goes too far in the direction of retaining or expanding tax breaks that disproportionately benefit corporations and upper-income Americans. Ryan's fundamental changes in Medicaid (giving states lump sums of federal money to care for low-income people) and Medicare (giving future beneficiaries — people now younger than 55 — a specified amount of money to buy private health coverage) are far-reaching proposals that require detailed cost-benefit analysis and extensive debate about consequences. They would leave the most vulnerable Americans — the elderly and the poor — with dwindling care.

It's hard to have a serious debate, though, if one side appears to be in denial about the extent of the problem. Democrats' lack of an alternative suggests that all they really support is the unsustainable status quo.

Let the adult conversation begin.

And, are your economic geniuses looking at what's happening to countries that have made large-scale spending cuts as opposed to those that are gradually bringing them in? The latest OECD estimates have the UK (one such country) growing slower than it's peers over the next few years. We are seeing high inflation, growing unemployment and the effects of spending cuts are having those 'unintended consequences' things, in that they seem to be hitting people at the middle and bottom of society more.

However, you gloss over a key point: Obama has massively increased spending, so conservatives are talking about getting things back into proportion (and it's not overnight) while Obama is trying to freeze the massive increases into place. His plan will ultimately bankrupt us--or force massive tax hikes (like 88% if we want to stay solvent and keep all the benefits we have now).

Will millions die? Don't know.

Pelosi said millions of seniors will go without food. Please. Do you really believe that--or that if it was happening the American people would yawn? Democrats are against block-granting Medicaid, something even Democratic governors want. Why would they object? Because it takes power away from DC. They say it will result in governors cutting programs for the needy. Really? Governors face elections too. What block-granting would do is allow each State to address its own needs rather than be dictated to by DC. To DC Democrats, that is unacceptable.

I wonder what Brad feels about large tax cuts for the richest with his philosophy of an across the board spending cuts to hit everyone the same. Sounds to me like some people will gain out of the budget, while many will lose out or see services they support being hit.

In a non-socialist society, the focus is on freedom, not government-dependency. Besides, you're still talking generalities. Let's get a bit specific.

As an example, there are currently dozens of federal programs for job training, many of them overlapping. Ryan's plan consolidates them into one program. That's efficiency, not a loss of services.

Ryan's proposals will put Medicare on a path to solvency. Obama's will guarantee we will have to make future draconian cuts to people getting benefits OR massively increase taxes. Which is better? Currently, Medicare alone faces tens of TRILLIONS of dollars in unfunded mandates.

But hey, perhaps you need to do what we are so that people can see what the results of such policies are. The rich do fine, and don't suffer so much from spending cuts (and given that some people running banks into the ground are also very rich it's nice to see those partly culpable for the crash getting their dues), the rest of the country finds out how they actually benefit from public spending. Could be a salient lesson.

I see your class warfare. Like most Americans, I'm not buying.

danivon wrote:, Boehner's attitude could well be compared with the other side. No compromise here either. "$33bn isn't enough" .

Actually, I read today that in a meeting yesterday Boehner offered a compromise at $40B in cuts and the Democrats said no and that Boehner will eventually have to stand up to the tea party. So it's starting to seem like the Democrats are the ones not interested in compromise.

geojanes wrote:

danivon wrote:But let's get back to the actual policy proposal. How wise is it to attempt to close a deficit by including a cut on the higher rate of Income tax to 25%? I know that some people love to believe they know the shape of the Laffer Curve, but surely this will result in reduced revenue in the short term at the very least.

This is more far more complicated than it appears on the surface, and from what I understand the rate is capped at 25%, but the proposal also removes many deductions (but didn't get into any of the details). If we can get Warren Buffett, Bill Gates and their ilk up to a 25% tax rate, that would be great since they don't pay anywhere near that now.

The corporate rate is even worse since big companies like GE can game the system to pay no income taxes (or even get credits back) while less sophisticated small business end up paying GE's share.

For better or worse, we have a system that allows people to petition our government and the richest of us have done a great job petitioning the government to make laws in their interest, so that they pay less (as a percentage) than the average working man or small business. If the system were reformed into a progressive system of tax reform with a net 25% rate with fewer deductions for the very rich it could go a long way to making the system more fair, and even, possibly, generate more revenue, even in the short-term.

Considering the source of the proposal, I'm not holding my breath, but you never know. If the gov't commits to tax reform on this giant scale, who knows what will come out of the end? There's a lot of folks who write regulations who understand that our current system is grossly unfair and if people start paying attention to tax reform again, they might be able to make it more equitable.

I've said this many times, but I think if you put reasonable liberals (like George) and fire-breathing conservatives (like me) in a room, we could come to an agreement. I'm not against "the rich" paying more than the poor. They do now. Well, they would, except as George points out, they pay for loopholes and exploit them. What is needed is a more straightforward tax code.

Thanks George for a fair post. The Ryan plan may not be the end all and be all, but the Democratic plan is . . . nothing. Obama's plan? Triple the debt in 10 years. Ignore SS and Medicaid, cross our fingers and see what happens.

Please. Before commenting, watch Ryan's video. It's what 3 minutes? If you don't understand the tidal wave of entitlement spending that is heading our way because of our aging population, you cannot grasp the depth of the problem. Pretending there isn't one is not helpful.

Randy,

It is my understanding the big difference is in the structural changes of certain programs in the Ryan plan. For example, currently Medicaid has the states paying the bills of covered participants directly to the providers. Ryan's plan changes Medicaid into a block grant program where the money used for Medicaid would be given directly to people to buy health insurance on the open market.

The answer to this is absolutely not raising taxes. That's such an absurd knee jerk stupid reaction it's beyond consideration. That's like Joe Citizen who clears a net household income of $40,000, but he and his family spend $60,000, suddenly realizing that there’s not enough money to pay for all this, and simply accepting that Joe's employer will kick in a $20,000 raise simply because he demands it. The answer to Joe's problem first and foremost is to stop spending. If he wishes to have the lifestyle that $60,000 provides, then he needs to send his wife to work, or get a second job, or seek out a job that pays him more. This doesn't happen as if by magic. There are investments in time, training, and education required, and other sacrifices in terms of lost leisure/family time.

This is of course an item of faith among American conservatives. Absolutely under no circumstances whatsoever can raising taxes ever be justified, even if all that means is raising them back to the levels that were seen under that notorious communist Ronald Reagan. It's a bizarre position to adopt because it means that in order to bring the budget back into balance you'll need to make much deeper and more painful cuts than would otherwise be the case, which will surely have to include cuts to conservative sacred cows such as defence. The sort of cuts you'd need to make to balance the budget without any tax increases are likely to be politically unfeasible. Grown-ups are aware of this problem. It all leads me to believe that American conservatives are not really serious about balancing the books. Sure, you guys do want to cut spending, and you're quite right to want that because it's necessary. But there's absolutely no way you'll balance the budget through spending cuts alone and deep down I think you know it.

I'd also like to say that all these folksy metaphors which compare the national budget with Honest Joe Citizen and his household budget are completely absurd and have no grounding in reality. State finances are vastly more complex than household budgets and governments have a whole host of different ways to raise money other than simply relying on one income stream. When we're talking about huge governments like the USA then they're also almost invulnerable to their creditors and can always simply print money to inflate their debts away. Sure, there are problems with that, and of course it's not sustainable in the long term to maintain enormous runaway deficits, but it's not the case that a government with huge debts is anywhere near as endangered as a family would be with a similar proportion of debts to income.