Monday, March 18

Washington's latest budget fiction

Washington's latest budget fiction
The new spending plan from GOP budget guru Paul Ryan appears to rely on political positions, like the repeal of Obamacare, that will never become law. The Democrats' upcoming plan won't be much better.

The spending plan for fiscal 2014 that Republican House Budget Committee chief Paul Ryan is unveiling today will get probed, prodded, and debated for its ideas about balancing the budget over 10 years.

But from all indications, the new budget comes laced with gimmicks and goals -- such as dismantling Obamacare and changing Medicare to a voucher-style program -- that play well to Ryan's base but aren't likely to survive.

A similar story will unfold on Wednesday when Washington Sen. Patty Murray announces the Democratic version of the budget blueprint -- this one laden with increased tax revenues already declared dead on arrival by Republicans, more spending to spur the economy and a much more modest goal of stabilizing the $16.5 trillion national debt as a share of the national economy, rather than creating a surplus in a decade.

If the recent past is any guide, these two budget plans will mostly be fantasies, attempts at partisan branding first and foremost. They are efforts to shape public opinion for the fierce negotiations or brutal stand-off to follow. And in the case of the Senate Democrats who have failed to approve a budget in the past three years, Murray's document will amount to some badly needed face-saving by her party.

"The cynical answer is that neither of these budgets matter," said Michael Linden, director of tax and budget policy at the progressive Center for American Progress. "They are good as statements of principle about where both sides think we should go."

There is wisdom in being cynical, based on the recent fiascos involving the 2011 debt ceiling increase, the collapse of the super committee, the drama around the fiscal cliff at the start of this year, and the $85 billion in across-the-board sequestration cuts that began kicking in this month.

Here is The Fiscal Times' preview of the half-truths and talking points being issued in the competing budget plans this week -- and why real deficit reduction remains so elusive.

Put simply, the Ryan budget depends on a bizarro universe in which President Obama ditches his beliefs and converts to a GOP that he roundly defeated in last year's presidential election.

It is premised on repealing the spending associated with Obamacare while retaining the $716 billion in Medicare savings made possible by the 2010 law to provide near-universal health insurance coverage. As the GOP vice presidential nominee last year, Ryan savaged these same savings at the Republican National Convention, saying, "The greatest threat to Medicare is Obamacare, and we're going to stop it."

"I really can't think of any comparably dishonest episode in recent American political history," commented University of Texas-San Antonio political scientist Jonathan Bernstein in a Monday blog post for The Washington Post. "'Tis well beyond chutzpah."

At the same time, Democrats are committed to raising hundreds of billions in new revenue to reduce the deficit and offset other spending during the next 10 years by closing tax-code loopholes. House Speaker John Boehner, R-Ohio, has repeatedly pledged to block the measure, after having accepted a rate increase on household incomes above $450,000 at the start of the year as part of the fiscal cliff deal.

For anything to become real policy, it must receive approval from all sides. "So what if you can pass a budget out of your own chamber? That's no big deal. The trick is to be able to pass a budget out of Congress -- a joint-budget resolution," said Robert Bixby, executive director of the fiscal watchdog organization, The Concord Coalition. "It's the best hope to get some kind of grand bargain."

Even then, the budget would merely set overall spending and revenue targets. "It does not provide funding for federal programs or change tax law," Robert Sunshine, deputy director of the Congressional Budget Office, blogged on Monday.

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