Competing Budgets: House, Senate, White House

Rep. Paul Ryan (R-WI), chairman of the House Budget Committee, released his proposed budget this week. In addition to no new tax hikes, key features include:

• comprehensive tax reform that would close loopholes and consolidate income tax rates into two brackets: 10% and 25%;
• energy reform that would approve the Keystone Pipeline, open federal land to natural gas development (a supply equal to 90 years of America's needs), create thousands of jobs, deliver millions of new dollars to government treasuries, and put the U.S. on path to full energy independence;
• health care reform that includes repealing Obamacare and strengthening Medicare;
• welfare reform that incentivizes states to help people off welfare rolls and on to payrolls; limiting federal government spending increases to 3.4% per year rather than 5%; and
• a balanced federal budget by 2023.

In contrast, reports the Hill, "the first budget from Senate Democrats in four years includes nearly $1 trillion in new taxes but would not balance the budget." 

The president's budget, now two months behind schedule, is due out in April.

CATO's Dan Mitchell writes that, although it isn't a libertarian budget, 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.

Per Mitchell, "the Ryan Budget is a step in the right direction, but much more will be needed to restore limited, constitutional government."

We're All Tea Partiers Now

The Tarrance Group released a poll today of 800 "likely registered voters throughout the country." Key findings:

• 8 in 10 (84%) of voters find it extremely or very concerning that the U.S.Senate has not passed a budget in nearly 3 years, including 93% of Republicans, 85% of Independents, and 74% of Democrats.
• 75% want to see President Obama's budget cut spending, but only 31% expect it to actually cut spending.
• 62% want to see the president's budget reduce taxes, but only 24% expect his budget to do that.
• 55% believe the best way to grow the economy and create jobs is by cutting government spending and keeping taxes low for all taxpayers, while 36% believe the best way is to increase government spending and make the rick pay more in taxes.

Human Events: Top 10 Washington Sins

If Washington DC were the American Heartland's lover, he would be on his way out the door. "Anger against congress, federal bureaucrats, lobbyists and all that is Washington has been boiling over in America's Heartland," writes Human Events, "with good reason. ... Here's the proof: The Top Ten Ways Washington Annoys the Heartland."

Should Social Security Be Means-Tested?

It's curious that so many, including the Heritage Foundation, want to fix the federal debt by means-testing Social Security, especially since it would be the surest way to kill the program by turning it into a pure federal welfare program. After all, why should voters continue to support FICA deductions (i.e., Federal Insurance Contributions Act) from their paychecks when only the poor would ever receive anything from it?

In "Is Means-Testing Just," Paul A. Rahe develops a strong argument that means-testing is the wrong solution to the Social Security problem, and he cautions conservative policy-wonks not to "march over the cliff" without thinking this through. It's an important read, particularly for young conservatives.

CATO: The 'Tea Party' Budget

The “Tea Party Debt Commission” affiliated with FreedomWorks recently released a budget plan (download here). In formulating its plan, the commission took into account fifteen budget plans introduced by various groups and policymakers, including Cato’s Downsizing Government website.  I think the plan is an adequate response to that criticism. The following are some additional comments on the plan’s contents: -more-

Socialists Losing Their Free-Market Sugar Daddy

Precious little humor can be found in Greece's economic death spiral, but Rachel Marsden's "Who'll Volunteer to Save the Socialists?" will provoke a bittersweet smile from conservatives even as it reminds us how dangerously high the stakes are in our own nation's budget debates.