Conservative Criticism of Paul Ryan's Budget

A blog about business and economics.
March 12 2013 11:05 AM

A Smart Conservative Criticism of Paul Ryan's Budget

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If you're going to be the party of tax cuts, then you have to have a tax-cut plan that cuts most people's taxes.

Photo by Justin Sullivan/Getty Images

Ross Douthat and Reihan Salam both recommended Jim Pethokoukis' take on Paul Ryan's budget and I agree with them that it's smart.

His six bullet points:

1. If the GOP’s Medicare reform plan is such a good idea (and budget deficits are such a problem), it should be implemented before 2024. Ryan knows this, surely.
2. There’s no Social Security reform plan.
3. The plan repeals Obamacare, which is highly unlikely. Better to have shown how the ACA can be fixed.
4. The plan lowers the top tax rate to 25 percent, which, like an Obamacare repeal, ain’t going to happen. The reduction—the path to which remains unspecified—also will require fiscal gymnastics so as to a) not lose revenue and b) not raise taxes on the middle-class. Tax reform is an opportunity for the GOP to show it is the party of parents and kids, not just the party of heroic entrepreneurs and CEOs. Better to have a higher individual rate and dramatically reduce the current tax code’s bias against investment capital and human capital.
5. Does nondefense discretionary spending need to be cut further? Again, this is a result of having to make the numbers work while also delaying Medicare reform.
6. Why does the budget need to balance in 10 years? Debt reduction doesn’t require balance, just that the economy is growing faster than the debt. While the plan does put the debt/GDP ratio on a downward trajectory—rather than merely stabilized as Obama and the Senate Democrats would do—it probably doesn’t need to be quite as steep.
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Read the whole thing. But really point four is worse than Pethokoukis makes it out to be. If you're going to be the party of tax cuts, then you have to have a tax-cut plan that cuts most people's taxes. Ryan's plan is going to lead to tax increases for a broad swathe of middle-class Americans and do absolutely nothing for low-wage workers. Conservatives' great strength in American politics is that most people are very skeptical about the efficiency and efficacy of government programs. But working- and middle-class Americans are going to want a tax cut for themselves in exchange for less program spending and fewer benefits. Ryan is offering them fewer benefits so that a small high-income minority can pay lower taxes. That's a tough sell.

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