Tag: paul ryan

Paul Ryan’s Budget: It’s Still Big Government

Chris Edwards provided an ample overview of Rep. Paul Ryan’s (R-WI) budget proposal, so I won’t rehash the numbers. Instead, I’ll just add a few comments.

Democrats and the left will squeal that Paul Ryan’s budget proposal is a massive threat to the poor, the sick, the elderly, etc, etc. It’s baloney, but a part of me thinks that he might deserve it. Why? Because the excessive rhetoric employed by the left to criticize lower spending levels for domestic welfare programs isn’t much different than the excessive rhetoric Ryan uses to argue against sequestration-induced reductions in military spending. For instance, Ryan speaks of the “devastation to America’s national security” that sequestration would allegedly cause. (See Christopher Preble’s The Pentagon Budget: Myth vs. Reality).

Now I’m sure that I’ll receive emails admonishing me for failing to recognize that the Constitution explicitly gives the federal government the responsibility to defend the nation while the constitutionality of domestic welfare programs isn’t quite so clear. Okay, but what are Ryan’s views on the constitutionality of domestic welfare programs?

At the outset of Ryan’s introduction to his plan, he quotes James Madison and says that the Founders designed a “Constitution of enumerated powers, giving the federal government broad authority over only those matters that must have a single national response, while sharply restricting its authority to intrude on those spheres of activity better left to the states and the people.” That’s nice, but then he proceeds to make statements like this:

But when government mismanagement and political cowardice turn this element of the social contract into an empty promise, seniors are threatened with denied access to care and the next generation is threatened with a debt that destroys its hard earned prosperity. Both consequences would violate President Lyndon B. Johnson’s pledge upon signing the Medicare law: ‘No longer will older Americans be denied the healing miracle of modern medicine…No longer will young families see their own incomes, and their own hopes, eaten away simply because they are carrying out their deep moral obligations to their parents, and to their uncles, and their aunts.’ To fulfill Johnson’s pledge in the 21st century, America’s generations-old health and retirement security programs must be saved and strengthened.

Social contract? Well, so much for those enumerated limits on federal power.

Ryan’s “Statement of Constitutional and Legal Authority” only cites Congress’s general power to tax and spend. Based on the contents of his proposal, which would do little to rein in the federal government’s scope, one could conclude that Ryan’s view of federal power is almost as expansive as that of his Democratic colleagues. Yes, Ryan would reduce the size of government by reducing federal spending as a percentage of GDP. But as I often point out, promises to reduce spending in the future don’t mean a lot when you have a federal government that has the ability to spend money on pretty much any activity that it wants. And under Ryan’s plan, the federal government would be able to continue spending money on pretty much any activity that it wants.

Paul Ryan’s Spending Plan

House Budget Committee chairman Paul Ryan (R-WI) has introduced his annual budget blueprint. The plan will likely pass the House but won’t become law this year.

However, the plan signals the direction that House Republicans want to go in budget battles with the Democrats this year, and it also shows the likely thrust of policy under a possible Republican president next year.

Here are a few highlights:

  • Total federal outlays would fall from $3,624 billion this year to $3,530 billion next year. Those figures are $24 billion less than under President Obama’s budget this year and $187 billion next year.
  • Of the $187 billion savings compared to Obama next year, $38 billion would come from discretionary programs, $146 billion from so-called entitlements, and $3 billion from interest costs.
  • Ryan’s proposed spending in 2022 of $4,888 billion would be a modest 13 percent less than Obama’s proposed spending that year. That’s a useful statistic to remember when you read the inevitable stories about how Ryan would slash, burn, and pillage the government safety net.
  • Indeed, Ryan’s proposed increase in federal spending from $3,624 billion this year to $4,888 by 2022 represents fairly robust annual average growth of three percent.
  • As a share of GDP, the Ryan budget would trim outlays from 23.4 percent this year to 19.8 percent by 2022. That reduction would simply get spending back to around the normal historical level. And note that spending would still be higher than the 18.2 percent achieved in the last two years under President Clinton.
  • Ryan would repeal the 2010 health care law and reform Medicare by transitioning to a consumer-choice model. Those changes are expected to reduce annual outlays in 2022 by $258 billion.
  • Perhaps a more important proposal is the block-granting of Medicaid and other entitlement programs such as food stamps. Those Ryan reforms would save $313 billion annually by 2022.
  • Converting entitlements to block grants would allow the federal government to clamp down on federal costs while giving the states strong incentives to improve program efficiency.
  • The Ryan budget does not propose Social Security reform. Paul Ryan favors major reforms to this program, but he apparently thinks that reforming health care and other entitlements is a higher priority right now.
  • Aside from a few obvious targets—such as high-speed rail and the 2010 health care law—the Ryan budget shies away from abolishing specific programs, agencies, and departments.
  • Too often the Ryan budget proposes to fix broken programs when the proper reform would be elimination. Ryan proposes to “consolidate” federal job-training programs, for example, but these programs have a history of failure over the last five decades. Furthermore, job training is not a proper federal role within the U.S. constitutional structure.

In sum, Ryan’s proposals would make modest reforms to the giant federal welfare state. By Washington standards the Ryan plan is bold, and Paul Ryan certainly deserves his reputation as the sharpest and most energetic budget reformer on Capitol Hill.

However, there is too much happy talk in the Ryan plan about how failed big-government programs can be made to work better, and not enough focus on terminating activities that are properly state, local, and private in nature.

P.S. I think my budget-cutting plan is a better one.

Biennial Budgeting: Baloney Budget Reform

I don’t recall ever agreeing with the left-liberal Center on Budget and Policy Priorities (CBPP), but their new paper on the drawbacks of the federal government switching to biennial budgeting is a good read. Congressional Republicans, including House Budget Committee chairman Paul Ryan (R-WI) and Senate Budget Committee ranking member Jeff Sessions (R-AL), are the chief proponents of switching to a biennial budget cycle. By providing (qualified) support to the CBPP paper, I’m hoping to demonstrate to would-be GOP naysayers that criticism of biennial budgeting isn’t confined to one area of the ideological spectrum.

I don’t agree with everything in the paper and I don’t share some of the authors’ concerns, but here are three solid points that the paper makes:

  • In 1940, 44 states practiced biennial budgeting. Currently, only nineteen do. In addition, larger states typically have an annual budget cycle. The authors correctly ask, “if large state governments find that biennial budgeting is not the best approach given the responsibilities they shoulder, is it likely to prove appropriate for an entity with the far more extensive domestic and international responsibilities of the U.S. government?”
  • The authors call the claims made by proponents that biennial budgeting will free up more time for oversight “overstated.” Authorizing committees can conduct oversight anytime they want. The appropriation committees conduct oversight when they review agency budget requests each year. What’s the benefit of having oversight conducted by the appropriations committees every two years?  (For the record, I think the value of congressional oversight is overstated for public choice reasons, but I’ll play along for today.)
  • The authors explain what I consider to be the fatal flaw with biennial budgeting:

The desire of many lawmakers to rein in such supplemental appropriations and reassert meaningful control over all annually appropriated funds — and the practice the Obama Administration has followed of including war funding within the regular defense appropriations bill, which has improved budget transparency — would become much harder to fulfill if biennial budgeting were implemented. It is not possible for Congress effectively to plan ahead for unexpected needs in the second year of a biennium. Large supplemental appropriations to meet such needs outside of the two-year budget plan would almost certainly become a regular part of the budget process and could further erode budget controls and accountability.

(Note: A recent paper from Cato adjunct scholar Veronique de Rugy explains that supplemental appropriations are already a problem.)

As a former budget official in a state that uses biennial budgeting, I just don’t understand what congressional Republicans think they’re going to accomplish. The cynic in me thinks that at least part of the support stems from the unwillingness of most Republicans to get specific on what they’d eliminate from the federal budget. Like the Balanced Budget Amendment, I think a lot of Republicans are simply using biennial budgeting as political cover.

Strike Three for PolitiFact

The annual unveiling of its “Lie of the Year” award garners PolitiFact more attention than anything else. Hopefully, it will garner so much attention that people will recognize this award, which is supposed to improve political discourse, instead degrades it.

PolitiFact’s past three Lies of the Year have been about health care.  Not one of them was a lie.

A lie is when a speaker says something that he knows or believes to be false, for the purpose of deceiving others. None of these supposed Lies of the Year even met the threshold test of being false.  The first two (“death panels” and “ObamaCare is a government takeover”) were actually, demonstrably true.

The third and latest Lie of the Year—that “Republicans voted to end Medicare”—is arguably true: its veracity depends on what your definition of “Medicare” is. To seniors, Medicare means “the government helps me pay for health care.” The House Republicans’ budget (a.k.a., the Ryan plan) would not end such federal assistance, and would arguably improve access to quality health care. To the Left, “Medicare” means the particular way the federal government helps seniors access health care: a single-payer system.  The Ryan plan would end that single-payer system. My leftist friends are right and PolitiFact is wrong: from a certain and valid perspective, this claim is true.

Moreover, even if these three statements were false, the speakers believed them to be true. Therefore, they cannot be lies. Every single Lie of the Year award has gotten that basic fact wrong.

In the process, this award degrades political discourse by implicitly launching—an encouraging others to launch—ad hominem assaults on people who hold legitimate differences of opinion. PolitiFact should find a better way to attract readers.

I have been writing about the flaws in PolitiFact’s business model for some time:

I’m glad to see my friends on the Left have taken notice, though I regret the way it happened.

McConnell’s Cave-In and Boehner’s Opportunity

Senate Minority Leader Mitch McConnell has offered the president a way to raise the debt ceiling by $2.5 trillion without having to cut spending. The WaPo reports that “McConnell’s strategy makes no provision for spending cuts to be enacted.”

This appears to be an epic cave-in and completely at odds with McConnell’s own pronouncements in recent months that major budget reforms must be tied to any debt-limit increase.

House Republicans should obviously reject McConnell’s surrender, and they should do what they should have done months ago. They should put together a package of $2 trillion in real spending cuts taken straight from the Obama fiscal commission report and pass it through the House tied to a debt-limit increase of $2 trillion. Then they shouldn’t budge unless the White House and/or the Senate produce their own $2 trillion packages of real spending cuts, which could be the basis of negotiating a final spending-cut deal.

For those who say that House tea party members won’t vote for a debt increase, I’d say that $2 trillion in spending cuts looks a lot better than the alternative of having Democrats and liberal Republicans doing an end-run around them with McConnell’s no-cut plan.

For those who say that House members are scared of voting for specific spending cuts, I’d say that they’ve already done it by passing the Paul Ryan budget plan. I’d also say that you can’t claim to be the party of spending cuts without voting for spending cuts.

Obama’s Fiscal Commission handed Republicans ready-made spending cuts on a silver platter—Republicans will never get better political cover for insisting on spending cuts than now.

Ryan Plan Would Reduce Medicare & Medicaid Fraud

That’s the theme of my article in the current issue of National Review:

The budget blueprint crafted by Paul Ryan, passed by the House of Representatives, and voted down by the Senate would essentially give Medicare enrollees a voucher to purchase private coverage, and would change the federal government’s contribution to each state’s Medicaid program from an unlimited “matching” grant to a fixed “block” grant. These reforms deserve to come back from defeat, because the only alternatives for saving Medicare or Medicaid would either dramatically raise tax rates or have the government ration care to the elderly and disabled. What may be less widely appreciated, however, is that the Ryan proposal is our only hope of reducing the crushing levels of fraud in Medicare and Medicaid.

The three most salient characteristics of Medicare and Medicaid fraud are: It’s brazen, it’s ubiquitous, and it’s other people’s money, so nobody cares…

The full article is now available at the Cato website.

Misunderstanding Nozick, Again

Someone called Stephen Metcalf writes at Slate of his horror at finding in “an otherwise quite groovy loft” in New York’s SoHo “not one but two copies of something called The Libertarian Reader.” Given that he manages to lump not just Paul Ryan and South Park but Sarah Palin into the libertarian basket, you can appreciate his dismay.

Metcalf puts Robert Nozick at the center of his argument, understandably enough. My colleague Tom Palmer says that academic critics almost always cite one chapter of one book, Nozick’s Anarchy, State, and Utopia, and declare that they have grappled with libertarian ideas. Still, it’s a good book and worth grappling with, and it did have an impact, as Metcalf notes:

I like to think that when Nozick published Anarchy, the levee broke, the polite Fabian consensus collapsed, and hence, in rapid succession: Hayek won the Nobel Prize in economics in 1974, followed by Milton Friedman in ‘75 [1976], the same year Thatcher became Leader of the Opposition, followed by the California and Massachusetts tax revolts, culminating in the election of Reagan, and … well, where it stops, nobody knows.

I’ll leave it to my more learned colleagues to analyze how successfully Metcalf actually deals with Nozick’s arguments. I just want to note one thing here. Like many other critics of libertarianism, Metcalf triumphantly announces:

How could a thinker as brilliant as Nozick stay a party to this? The answer is: He didn’t. “The libertarian position I once propounded,” Nozick wrote in an essay published in the late ’80s, “now seems to me seriously inadequate.”

Yes, yes, yes. It gets repeated a lot: “Even Nozick renounced libertarianism.” If it were true, it’s not clear what it would mean. Libertarianism is true, or not, whether or not Paul Krugman or Russell Kirk believes it, and whether or not Robert Nozick believes it. The idea stands or falls on its own. But as it happens, Nozick did “stay a party” to the libertarian idea. Shortly before his death in 2002, young writer Julian Sanchez (now a Cato colleague) interviewed him and had this exchange:

JS: In The Examined Life, you reported that you had come to see the libertarian position that you’d advanced in Anarchy, State and Utopia as “seriously inadequate.” But there are several places in Invariances where you seem to suggest that you consider the view advanced there, broadly speaking, at least, a libertarian one. Would you now, again, self-apply the L-word?

RN: Yes. But I never stopped self-applying. What I was really saying in The Examined Life was that I was no longer as hardcore a libertarian as I had been before. But the rumors of my deviation (or apostasy!) from libertarianism were much exaggerated. I think this book makes clear the extent to which I still am within the general framework of libertarianism, especially the ethics chapter and its section on the “Core Principle of Ethics.”

So Nozick did not “disavow” libertarianism. Indeed, Tom Palmer adds a point that

David Schmidtz told at a forum about Schmidtz’s book from Cambridge University Press, Robert Nozick, held October 21, 2002 at the Cato Institute. According to David, Nozick told him that his alleged “apostasy” was mainly about rejecting the idea that to have a right is necessarily to have the right to alienate it, a thesis that he had reconsidered, on the basis of which reconsideration he concluded that some rights had to be inalienable. That represents, not a movement away from libertarianism, but a shift toward the mainstream of libertarian thought.

Metcalf’s criticisms of libertarianism will have to stand on their own, as will libertarianism itself. He doesn’t have Nozick on his side. As for Metcalf’s final complaint that advocates of a more expansive state have been “hectored into silence” by the vast libertarian power structure, well, I am, if not hectored, at least stunned into silence.

P.S. Matt Welch notes that if Metcalf doesn’t have Nozick on his side, at least he has Ann Coulter.