Paul Ryan has released his 2012 budget proposal: The Path to Prosperity. It is perhaps, the boldest budget plan ever offered. As the editors at National Review put it,
Paul Ryan’s budget proposal for next year is the most ambitious conservative initiative since — well, actually, since ever.
Our current budget deficit will be $1.6 trillion this year. The total national deficit is $14 trillion. A few months back, President Obama proposed a budget that will never break even over a ten year period and will ultimately end with spending levels at 40% of GDP.
Ryan's budget proposal will cut spending $6.2 trillion compared to Obama's budget. It will cut spending back to the historical average of 20% of GDP. His plan will completely pay off the national debt by 2050. And he will do this without raising taxes.
I wish this graph was lying about our current path. I wish that everyone understood how perilous our future is. But wishing doesn't make it so. Our current path is not just unsustainable, but implies a total disaster awaits us.
Ryan's Path to Prosperity will change our country's fiscal direction. It will transform Medicare into a subsidized premium plan similar to the insurance program that members of Congress use and provide means tested assistance to supplement care. It will block grant Medicaid dollars and allow each state to design a program that works best for their state. It will privatize Fannie Mae & Freddie Mac, the primary cause of the 2008 financial crisis, repeal Obamacare, eliminate unnecessary subsidies for agriculture and energy, as well as overhaul the tax code.
The tax overhaul is as bold as Reagan's, but he goes one step further by bringing expenditures in line with revenues. By addressing the large entitlements, this budget seeks to create a sustainable future for America and provide an environment that will allow our economy to grow. This plan does this without making any changes for those currently aged 55 or older.
Most importantly, rather than trying the same failed policies of the past, this plan follows the formula for previous successes such as the Reagan & Kennedy tax reforms and the welfare reform of 1996.
Obama's own appointed deficit commission made a recommendation that the deficit needed to be reduced by $4 trillion over the next 10 years. This plan will reduce the deficit by $4.4 trillion and it does so by managing the growth of Medicare and Medicaid rather than push higher levels of spending into the future as Obama's budget would. As I said, this plan claims it will not only eliminate the annual deficit and return us to surpluses, but will actually eliminate the national debt in total by 2050.
The most controversial issue will be the premium supported Medicare plan. This is not a privatization, where seniors would get a check and then be on their own to find insurance. Just like our Congressman, seniors would pick from a list of guaranteed plans, the government would pay that premium directly. There would be further financial assistance for seniors on a sliding scale. It has bi-partisan support from both Democrat and Republican economists.
Of course if you don't like this plan, their is another option - raising taxes. But not just raising taxes on the rich and not just raising them a little bit. To accomplish all that Ryan's proposal will do, taxes would need to be raised 88%.
This is a big proposal, built for a big problem. The end result is that the government has to do less, with less. Unlike the Health Care Reform, which tried to do way too much and will spend way too much to do it poorly, this plan prioritizes what good government should do. It keeps the promises that we have made and will save us from the certain disaster that awaits us if we do nothing.
This is a plan that seeks to deliver what it promises - a path to prosperity - for all Americans. Paul Ryan has spoken and the Republican candidates in 2012 now have a platform for their campaign. President Obama and the Democrats are now on the clock. They must do better than the surreal budget Obama put out earlier this year. If the President was smart, he would pull a Bill Clinton, adopt Ryan's plan and claim it as a victory for next year's election.