The Republicans' preposterous budget proposal ignores Social Security, Medicare, and defense.

Making government work better.
Jan. 25 2011 11:34 AM

The Republicans' Bogus Budget Plan

The GOP's budget proposal is a preposterous, dangerous fantasy.

U.S. Rep. Paul Ryan.
Paul Ryan

The time has finally come for both parties to create a federal budget that simultaneously addresses the economy's structural deficits—tackles the immediate, recession-driven shortfall and still allows us to invest long-term in education, infrastructure, energy, and research and development.

There are basic budget and revenue facts that are not in dispute. These should factor into every discussion about the budget:

1. Top marginal rates have been generally descending for the past 70 years, from 81 percent in 1940 to 35 percent today.

2. Over the past 30 years, income has grown nearly 300 percent for the top 1 percent, but only 25 percent for middle-income Americans.

3. The percentage of all taxes paid by each income group—including income, payroll, sales, etc.—roughly reflects its total income. In other words, our tax system is barely progressive. Despite the cries of the wealthy for tax relief, they pay only a slightly greater share of taxes than the significantly less wealthy, as a percentage of total income earned.

4. Our annual budget is significantly out of balance:

a. Spending is about $3.8 trillion.
b. Revenue is about $2.5 trillion.
c. This leaves a deficit of about $1.3 trillion.

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5. The big buckets of spending are pretty clearly separable:

a. Defense—about $900 billion.
b. Social Security—$730 billion.
c. Medicare—$490 billion.
d. Medicaid—$300 billion.
e. Interest—$250 billion.
f. Nondefense discretionary—$610 billion.

Where do you begin to scale back spending or raise revenue to bring us into long-term balance, while laying a foundation for a competitive economy?