Mercatus Institute Scholar Veronique De Rugby has been a sharp critic of the Ryan budget over the past week. Today, she posted a chart that illustrates just how modest the long-term cuts in the Ryan budget are in contrast to Obama’s projected spending levels:
As you can see, the discretionary cuts are very small, even infinitesimal, with most of the savings coming from Medicaid, welfare reform, and repeal of Obamacare.
I would note that after 10 years, when Ryan’s Medicare reforms begin to take effect, Medicare spending will dramatically decline. Nonetheless, the fact that Ryan forestalled the reforms until 2023 made it impossible to cut one cent from the program during the 10-year budget frame.
Also, part of the reason why the discretionary cuts are so modest is because Ryan’s budget accounts for a much higher level of defense spending than Obama’s proposal. So non-defense discretionary spending does indeed undergo a more significant cut than this chart would indicate.
However, the main problem with Ryan’s plans for discretionary spending is that after the initial cuts are implemented, he allows for a steady increase in spending towards the end of the budget frame. As De Rugby notes, when the growth in discretionary spending is coupled with the lack of Social Security and Medicare reform over the next 10 years, overall spending actually increases by 4% per year, down only slightly from Obama’s 5% rate of growth. That is still faster than the average growth of the private sector.
The bottom line is that balancing a budget without raising taxes in not rocket science. There aren’t too many choices. It is clear that the only way we will balance the budget is by including the four following elements:
Any budge that does not contain those elements will never balance within enough time to forestall fiscal calamity.
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