James Pethokoukis

Politics and policy from inside Washington

The liberal budget response to Paul Ryan

April 7, 2011

Philip Klein, now at the Washington Examiner, scores a great scoop today with a peek at how the House Progressive Caucus plans on responding to the Ryan Path.  The liberal blueprint claims to balance the budget by 2021, mainly through a laundry list of tax increases that would raise government revenue as a share of GDP to a record high of 22.3 percent — four points higher than the historical average. (This also assume the tax increases have zero impact on growth.)

But the fiscal problem is not merely making the numbers balance out over ten years, but also over the rest of the century. That will require spending less on entitlements and more economic growth. But this plan does give insight into the sort of budget Washington liberals would prefer. Here is Phil:

Overall, taxes would rise to 22.3 percent of the economy, compared with 18.3 percent under the Ryan proposal.

The plan would also build on Obama’s most notable initiatives. It includes an additional $1.45 trillion in economic stimulus spending. On health care, the plan would add a government-run plan, or “public option,” to Obamacare and have the government negotiate drug prices.

Yet while other parts of government would grow, the defense budget would be gutted. The proposal would “reduce baseline defense spending by reducing strategic capabilities, conventional forces, procurement, and R&D programs.”

If liberal activists and Democratic lawmakers rallied around this plan, or something similar, then there could be an honest debate contrasting Ryan’s vision of lower taxes and entitlement reform with liberal plans to raise taxes, slash the military and further expand the role of government.

Comments

Yeah, and America will end up like Europe and Canada, with a bloated public sector, impudent public sector unions and an overtaxed private sector.

At least in recent years Canada has attempted to shake off the Liberal Party statism of the 1960s and 70s with some degree of success. The same can’t be said about Europe, where more and bigger government is ALWAYS the order of the day.

That, it seems to me, is the choice facing American voters: will it be Canada or Europe? Or will it be American exceptionalism instead, the belief in capitalism and free markets – and free peoples – that, in the past, made America great and will again.

Posted by Elektrobahn | Report as abusive
 

re: “American exceptionalism…”

Electrobahn must be living in a parallel universe.

Unless you’re in the top 1%, you’re falling further and further behind. There’s been a tremendous shift in our country, the middle class is largely wiped out, and the poor are worse off than they’ve been in a long time.

According to the IRS, in 1980 the top 1% made less than 1/2 what the bottom 50% made. Now they make 60% MORE than the bottom 50%.

Warren Buffett says the rich have never had it this good. Time to push the pendulum back to the middle.

Posted by Adam.Smith | Report as abusive
 

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