Tag: paul ryan

And the King of the Fiscal Squeeze Is…Bill Clinton?

When Congressman Paul Ryan takes the stage at CPAC Friday morning, he will, of course, tout his new budget as a solution to America’s spending problem. The 2014 Ryan plan does aim to balance the budget in 10 years. That said, it would leave government spending, as a percent of GDP, at a hefty 19% – as my colleague, Daniel J. Mitchell, points out in his recent blog.  

Proposals like the Ryan budget are all well and good, but they are ultimately just that – proposals. If Congressman Ryan really wants to get serious about cutting spending, he should look to the one U.S. President who has squeezed the federal budget, and squeezed hard.

So, who can Congressman Ryan look to for inspiration on how to actually cut spending? None other than President Bill Clinton.

How can this be? To even say such a thing verges on CPAC blasphemy. Well, as usual, the data don’t lie. Let’s see how Clinton stacks up against Presidents Barack Obama and George W. Bush. As the accompanying chart shows, Clinton was the king of the fiscal squeeze.

Yes, Bill Clinton cut government’s share of GDP by a whopping 3.9 percentage points over his eight years in office. But, what about President Ronald Reagan? Surely the great champion of small government took a bite out of spending during his two terms, right? Well, yes, he did. But let’s put Reagan and Clinton head to head – a little fiscal discipline show-down, if you will (see the accompanying chart).

And the winner is….Bill Clinton. While Reagan did lop off four-tenths of a percentage point of government spending, as a percent of GDP, it simply does not match up to the Clinton fiscal squeeze. When President Clinton took office in 1993, government expenditures accounted for 22.1% of GDP. At the end of his second term, President Clinton’s big squeeze left the size of government, as a percent of GDP, at 18.2%. Since 1952, no other president has even come close.

Some might argue that Clinton was the beneficiary of the so-called “peace dividend,” whereby the post-Cold-War military drawdown led to a reduction in defense expenditures. The problem with this explanation is that the majority of Clinton’s cuts came from non-defense expenditures (see the accompanying table).

Admittedly, Clinton did benefit from the peace dividend, but the defense drawdown simply doesn’t match up to the cuts in non-defense expenditures that we saw under Clinton. Of course, it should be noted that the driving force behind many of these non-defense cuts came from the other side of the aisle, under the leadership of Speaker Gingrich.

The jury is still out on whether Ryan (or Boehner) will prove to be a Gingrich – or Obama, a Clinton. But, at the end of the day, the presidential scoreboard is clear – Clinton is the king of the fiscal squeeze.

So, when Congressman Ryan rallies the troops at CPAC with a call for cutting government spending, perhaps the crowd ought to accompany a standing ovation for the Congressman with a chant of “Bring Back Bill!”

You can follow Prof. Hanke on Twitter at: @Steve_Hanke

Ryan Budget Proposal Is Not a Blueprint for Limited Government

The now annual release of House Budget Committee chairman Paul Ryan’s (R-WI) budget proposal has replaced the release of the president’s budget proposal as my least favorite policy event of the year. The president promises big government and Ryan promises smaller big government. What makes the Ryan proposal more aggravating is that it’s hardly a vision of limited government, but the left (and many on the right) treats it like it is.   

According to his numbers, Ryan’s budget ideas would reduce federal spending as a percentage of GDP from 22.2 percent this year to 19.1 percent in 2023. According to Democrats and liberals, such a savage reduction in the federal footprint would inflict unfathomable pain on various groups of Americans. 

Here’s Rep. Steny Hoyer (D-MD) with the standard Democratic scare-mongering that we can expect to hear over and over again in the coming months: 

Instead of insisting on a balanced approach to deficit reduction, Ryan’s budget will demand that our middle class, seniors, veterans, women, children, federal employees, low-income families, and those nearing retirement pick up the tab. 

Other than perhaps Oompa Loompas, I believe Rep. Hoyer got’em all (rich males aren’t included because they don’t pay their “fair share”).    

Instead of delving any further into Ryan’s numbers, I’m just going to get to my point. Proposing that the federal government borrow and spend less than what is currently projected is certainly better than the alternative. But if your goal is limited government then there has to actually be limits on what all the government is involved in

I don’t see anything in Ryan’s proposal that would end the federal government’s involvement in education, job training, energy, transportation, etc., etc. Yes, Ryan calls for ending Obamacare, but that wouldn’t end the federal government’s involvement in health care. Yes, Ryan says that higher education subsidies should be capped, but that wouldn’t end the federal government’s involvement in education. And so on. How the federal government delivers the goods would change (e.g., block-granting Medicaid and premium support for Medicare), but more efficient government isn’t the same as limited government.

Everything You Need to Know About the Ryan Budget

Sigh. Even when they’re sort of doing the right thing, Republicans are incapable of using the right argument.

Rep. Paul Ryan (R-WI), chairman of the House Budget Committee, has unveiled his proposed budget and he and other Republicans are bragging that the plan will balance the budget in 10 years.

That’s all fine and well, but good fiscal policy is achieved by reducing the burden of government spending, and that means restraining the budget so that federal outlays grow slower than the private sector.

It’s good to balance the budget, of course, but that should be a secondary goal.

Now for the good news. The Ryan Budget does satisfy the Golden Rule of fiscal policy. As you can see in the chart, federal spending grows by an average of 3.4 percent annually, and that modest bit of fiscal discipline is enough to reduce the burden of government spending to 19.1 percent of economic output by 2023.

It’s also good news that the Ryan Budget calls for structural reform of entitlement programs, including Medicaid block grants and Medicare premium support. The budget also assumes the repeal of the costly Obamacare program.

And there’s also some good tax policy. Not bold tax reform like a flat tax, but top tax rates would be reduced to 25 percent and many forms of double taxation, like the death tax and capital gains tax, presumably would be reduced or eliminated.

Let’s be clear, though, that this is not a libertarian budget. Federal spending will still be far too high. Indeed, the budget will consume a larger share of the economy than it did when Bill Clinton left office.

And while Republicans do a good job of restraining spending in the first couple of years of the new Ryan Budget, outlays rise far too rapidly beginning around 2016.

Moreover, there’s no Social Security reform.

Equally worrisome, the budget assumes that the federal tax burden should remain at about 19 percent of GDP, higher than the long-run average of 18 percent of GDP and—for all intents and purposes—permanently enshrining Obama’s fiscal cliff victory.

And it’s depressing to see that the Ryan Budget has gotten weaker each year.

At this rate, it won’t be that long before the GOP budget and Obama budget converge.

Okay, that’s an exaggeration. But the moral of the story is that the Ryan Budget is a step in the right direction, but much more will be needed to restore limited, constitutional government.

Media, Heal Thyself

Today Politico Arena asks:

 Are reporters justified in being fed up over the shallowness of the presidential campaigns?

My response:

Oh, this is rich—the media complaining about the shallowness of the two campaigns! Paul Ryan gives a substantive convention speech, but what leads the news afterward, day in and day out? Clint Eastwood’s performance the next night. Todd Aiken makes a gaffe, and two weeks later the media is still obsessing over it. Romney makes a substantive trip abroad, but his alleged “gaffes” are about all that’s reported.

Politico’s Dylan Byers complains that presidential campaigns are supposed to be “infused with big ideas and historical import,” yet this contest is “so far defined by gaffes, cynicism, knife-fights and rapid-fire news cycles.” Whose fault is that? Who’s doing the “defining”? Even the so-called respectable media go barely an inch deep on “big ideas” with “historical import”—of which there is no shortage this year.

To think that the Federalist Papers appeared in the newspapers of the day. I’ll bet not one in ten of today’s journalists has ever read them! You can’t report what you don’t see. And you can’t see what you’re unprepared to recognize.

Topics:

Republicans and Local Control

Jennifer Rubin, seeking to dispel “myths about conservatives,” takes on the idea that “the GOP doesn’t believe in community:

President Obama likes to say that Republicans want everyone to be “on his own.” In fact, conservatives, as Romney put it in a speech at Liberty University this year, believe family, communities, churches and other civil institutions are critical building blocks in society. They favor investing authority in the level of government closest to the people (locales and states), which they believe is most responsive and governs best.

That’s a nice theory, and it’s one that keeps many libertarians voting Republican.

But in practice Republicans show less respect for state and local powers than you might think. Republicans, including Mitt Romney and Paul Ryan, supported—and still support—President Bush’s proposals for federal takeovers of education and marriage law. And I’ve never heard them question the Bush administration’s defense and vigorous prosecution of federal marijuana prohibition in the face of state efforts at reform.

Would that we had a Republican party that actually favored “investing authority in the level of government closest to the people.”

Civil Liberties Have No Champion in Presidential Race

Steve Chapman, writing in the Chicago Tribune:

Back in the early days of the Republic, the framers went to great trouble to draft and ratify the Bill of Rights. And every four years, our leaders pay homage to the framers by neglecting or disparaging that creation. …

When George W. Bush was president, Democrats often decried his habit of trampling on freedoms in his zeal to stamp out terrorism at any cost. Running in 2008, Barack Obama decried Bush’s aggressive use of presidential power in the name of national security.

But Democrats usually worry about civil liberties only when the other party is violating them. Obama is not always recognizable as the same person now that he is president. He has maintained the prison camp at Guantanamo, continued warrantless surveillance of Americans and carried out lethal drone attacks on U.S. citizens abroad without making public the evidence.

Read the whole thing. More from Cato Senior Fellow Nat Hentoff.

An Update on Different Pentagon Spending Plans

On Monday, I posted a lengthy entry here comparing the different plans for military spending: the current Obama administration/OMB baseline, CBO’s latest estimate for sequestration, Mitt Romney’s plan to spend four percent of GDP on the Pentagon’s base budget, and Paul Ryan’s plan.

I should have taken a bit more time checking my numbers, because I ended up comparing apples to oranges (or 050 to 051, in budget-wonk-speak).

Thankfully, the ever-watchful Carl Conetta at the Project on Defense Alternatives spied the error, and set me straight. The gap between the Ryan plan and the current baseline (President Obama’s plan) is less than I had previously reported. The gap between the Ryan plan and the Romney plan is larger. The new numbers, and a revised chart are enclosed below.

I have had to make some inferences, so Governor Romney has some wiggle room. Romney’s surrogates have clarified other aspects of his plans for military spending, most recently here, but I still don’t know what is included when he says he will have a “goal of setting core defense spending—meaning funds devoted to the fundamental military components of personnel, operations and maintenance, procurement, and research and development—at a floor of 4 percent of GDP.” And no one seems to know how soon he intends to achieve that goal.

He could claim that the four percent goal should be applied to the entire “national defense” category (aka 050), which includes nuclear weapons spending within the Department of Energy, for example. This amounts to about a $25 billion difference annually. He could also include mandatory spending within the Pentagon’s budget, another $9 billion a year, on average.

The bottom line remains unchanged, however: Paul Ryan would spend more than President Obama on the military; Mitt Romney would spend much more. To his credit, Ryan has specified other spending cuts in domestic programs to ensure that his plan doesn’t add to the deficit or require higher taxes. Romney has not.

As before, I anxiously await additional clarification on how Romney plans to make up the difference.

Details, in constant 2012 dollars, for the period 2013-2022:

  • Obama/OMB Baseline (051, discretionary):  Total $5.163 trillion
  • Sequestration per CBO (051, discretionary): Total $4.659 trillion; $504 billion in savings
  • Ryan plan (051, discretionary): Total $5.321 trillion; $158 billion in additional spending
  • Romney 4 percent in four years: Total $7.015 trillion; $1.852 trillion in additional spending
  • Romney 4 percent in eight years: Total $6.868 trillion; average $687 billion/year; $1.704 trillion in additional spending