D. Dowd Muska

 

Paul Ryan’s Phony Budget Fix

March 14, 2013

Here’s where we are: One political party is willing to accept a publicly held national debt of $18.2 trillion in 2023. Its opponent is comfortable with $14.2 trillion.

The bubble-headed reporters and payola pundits of the legacy media aver that the ten-year fiscal blueprints issued by Rep. Paul Ryan (R-WI) and Sen. Patty Murray (D-WA), chairs of their respective chambers’ budget committees, represent starkly contrasted perspectives. Liberals, it is claimed, want to maintain the pace of Uncle Sucker’s full-throttled spending, while conservatives embrace “austerity.”

But click around on the fedpols’ plans, and you’ll quickly discover that bipartisanship isn’t dead. Democrats are too cowardly to make the reelection-risky cuts necessary to dodge the coming fiscal bloodbath, and Republicans aren’t much braver.

Ryan believes that the “dangers” facing America “require a lean, dynamic government.” Jefferson understood a verity the boy from Janesville doesn’t -- that liberty yielding to government is “the natural progress of things.” The Sage of Monticello would have scoffed and chortled at the notion of dynamism in the “public” sector.

Letting hope trump history, Ryan thinks that Washington’s bureaucratic behemoth can be run efficiently, if “transparency” measures are implemented, “structural flaws” in the budgeting process are addressed, and congressional committees (!) vigorously police “waste, fraud, abuse, or mismanagement.” So under “The Path to Prosperity: A Responsible, Balanced Federal Budget,” the Department of Energy escapes the hangman. So do other cabinet-level departments (e.g., Commerce, Labor, Education, Commerce, Agriculture, Housing and Urban Development) that shower ever-larger loot on politically juiced constituencies. In the 2014 fiscal year, which begins October 1, the Pentagon is to receive $560.2 billion. Significant curtailments of the bloated and unaccountable military-industrial complex are nonstarters in Ryan’s neocon-approved weltanschauung, where “we are only safe when we are strong” and “the world needs American leadership.”

As the Cato Institute’s Tad DeHaven observed, “Ryan calls for ending Obamacare, but that wouldn’t end the federal government’s involvement in health care.” The GOP budgeter seeks to block-grant Medicaid to the states. Medicare’s “commitment to seniors” will be preserved. There will be “no changes” for current beneficiaries -- i.e., don’t worry about means-testing, oldster voters -- while “those workers born in 1959 or later” will access a subsidized, “competitive-bidding process.” And Social Security? The White House and the Congress will “put forward specific ideas and legislation to ensure the sustainable solvency of this critical program.” Wow. Mighty bold.

The price tag for Ryan’s 2014 budget is $3.5 trillion. A decade later, expenditures would be $5.0 trillion. With no revenue-spewing economic boom likely to occur anytime soon, this lack of restraint keeps D.C.’s credit card charging away. The feds ran trillion-dollar deficits in 2009, 2010, 2011, and 2012, and according to the Congressional Budget Office, this year’s gap is likely to be $845 billion. “The Path to Prosperity” permits annual deficits for another decade, until balance is achieved in 2023. That’s why the blueprint would boost publicly held debt -- today, it’s $11.9 trillion -- to $13.2 trillion in 2023.

To its credit, Murray’s “Foundation for Growth: Restoring the Promise of American Opportunity” acknowledges a key fact that Ryan’s document overlooks. The treasuries owned by investors both in the U.S. and abroad are just one category of obligations. “Intergovernmental” debt is, in the words of the Heritage Foundation, “money the U.S. government has loaned itself from one part of the budget to another.” It’s $4.8 trillion now, and while the House budget chief leaves the figure out, his counterpart in the Senate does not. When combined with publicly held debt, her plan would grow the nation’s gusher of red ink to $24.4 trillion in 2023.

Neither Murray nor Ryan bother to note something even scarier. The federal government’s unfunded liabilities are the pension and healthcare promises that have been made for decades to come, minus the offsetting revenue that will be raised. Boston University’s Laurence Kotlikoff, the guru of “generational accounting,” estimates that unfunded liabilities exceed $200 trillion. (“Our country is broke,” the economist wrote in a January op-ed in The Boston Globe. “It’s not broke in 30 years or 10 years or 5 years. It’s broke today.”)

Only a speedy, if wrenching, return to Washington singularly focused on protecting liberty will avert a far more brutal reckoning. A national government as the Founders envisioned it is no longer a quixotic ideological crusade. With an aging population, a huge cohort of Americans unwilling to engage in productive work, and tough international competition for jobs and investment, limited government is a fiscal, economic, and moral imperative.

D. Dowd Muska (www.dowdmuska.com) writes about government, economics, and technology. Follow him on Twitter @dowdmuska.

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