The 2012 Federal Budget: A Contrast In Perceived Realities

Apr 16th, 2011 | By | Category: Politics & Current Events

The debate over the 2011 federal budget is presumably over.  After taking the nation to the brink, even possibly facing a possible shutdown of the federal government, the congressional leaders cut the budget and finally passed the 2011 budget, which runs through 30 September.  [Incidentally, the Democratic Party failed to produce a budget last year, even though they controlled the White House, and both houses of Congress!]  As I approach this Perspective on the 2012 federal budget, I find the words of the economist, Robert Samuelson, refreshing and brutally honest:  ?We in American have created a suicidal government. . . By suicidal, I mean that government has promised more than it can realistically deliver and, as a result, repeatedly disappoints by providing less than people expect or jeopardizing what they already have. . . Few Americans realize the extent of their dependency.  The Census Bureau reports that in 2009 almost half (46.2 %) of the 300 million Americans received at least one federal benefit:  46.5 million, Social Security; 42.6 million, Medicare; 42.4, Medicaid; 36.1 million, food stamps; 3.2 million, veterans? benefits; 12.4 million, housing subsidies.  The census list does not include tax breaks.  Counting these, perhaps three-quarters or more of Americans receive some sizable government benefit.?  Esteemed political scientist, James Q. Wilson, writes that ?Once politics was about only a few things; today, it is about nearly everything.?  The concept of ?vital national interest? is stretched.  We deploy government casually to satisfy any mass desire, correct any perceived social shortcoming or remedy any market deficiency.  The consequence, Samuelson maintains, is ?political overload:  The system can no longer make choices, especially unpleasant choices, for the good of the nation as a whole.  Public opinion is hopelessly muddled.  Polls by the National Opinion Research Center at the University of Chicago consistently show Americans want more spending for education (74%), health care (60%), Social Security (57%), and, indeed, almost everything.  By the same polls, between half and two-thirds of Americans regularly feel their taxes are too high. . . Huge budget deficits follow logically; but of course, most Americans want those trimmed, too.?  The bottom line of all this is that few Americans would surrender their own benefits, subsidies and tax breaks, which is an absolute precondition for any type of success in deficit reduction or tax reform.  The US government is indeed suicidal because it breeds expectations that it cannot meet!

These most insightful comments by Samuelson set the stage for the primary point of this Perspective?the 2012 budget.

  • First of all, the approach of the two major political parties has been instructive and has in no small way contributed to the budget crisis.  Democrats believe that the economic crisis made the electorate yearn for security, thereby creating openness to large public programs.  They therefore enacted a huge stimulus bill, an expensive health care act and other expansions of government.  Republicans believe that the crisis alarmed voters about a government out of control with a huge debt.  They want to stop the binge and cut the deficit.  The 2010 elections apparently demonstrate that the Republican Party is closer to the mark.  As everyone knows, but few want to actually accept, the major reason for the long-term debt explosion is our system of entitlements, which the recent health care legislation has only exacerbated.  So far, including the 2012 budget President Obama recently proposed to Congress, the Democratic Party has declined to offer any solutions to the nation?s fiscal crisis.  In his State of the Union address, the president said it is important to confront entitlements, but proposed absolutely no way to do so.  His budget proposed no reform and would actually accelerate the growth of the debt, doubling it over the next ten years!  It is amazingly short-sighted.  Further, Obama has completely ignored the recommendations of his own deficit-reduction commission, the Simpson-Bowles commission.  The proposal of Paul Ryan is a realistic response to those Commission recommendations, the subject of the next part of this Perspective.
  • Second, in contrast to the president, Paul Ryan, chairman of the House Budget Committee, has offered an alternative to the president?s vision and budget; what he calls ?The Path to Prosperity.?  Basically, his proposal cuts $6.2 trillion in spending from the president?s budget over the next 10 years, reduces the debt as a percentage of the economy, and puts the nation on a path to actually paying off our national debt.  It brings federal spending to below 20% of GDP, consistent with the postwar average and reduces deficits by $4.4 trillion.  Arguably provocative and controversial, this proposal cannot be ignored.  It is the most serious attempt to reform government in at least a generation.  It offers voters what they have been saying they want?a blueprint to address the roots of the fiscal disorder and dysfunction of the US budget and its deficit.  It also addresses significant reform and cost savings in Medicare, Medicaid, and, to some extent, Social Security?all of which the president?s budget ignores.  Ryan?s proposal reduces non-defense discretionary spending (by 30%), farm subsidies (by $30 billion), and re-adjusts both the corporate tax structure and individual taxation rates by eliminating certain deductions and exemptions.  A comparison of President Obama?s budget proposal and Congressman Ryan?s budget proposal is a study in the contrast of perceived realities.
  • Third, whether you agree with Congressman Ryan?s proposal or not, he has provided the nation with the leadership it has not had?an elected official willing to issue a proposal, willing to take risks and willing to face the political perils of reform and changing the way this government functions.  Someone once defined insanity as continuing to do the same thing but expecting different results.  Congressman Ryan is proposing something radically different than the status quo.  As columnist David Brooks has so eloquently put it:  ?Ryan has [filled] the vacuum left by the president?s passivity.?  His proposal sets the standard for any serious discussion of the budget and the future of this nation.  The context for debate has now been created:  The current welfare state of the US is simply unsustainable and anyone who is intellectually honest, whether from the left or the right, realizes that this nation must revise its social contract with its citizens.  As Brooks writes, Ryan?s plan ?has moved us off Unreality Island.  He is forcing Americans to confront the implications of their choices.  With a few straightforward changes, his budget could be transformed into a plausible center-right package that would produce a fiscally sustainable welfare state while addressing the country?s structural economic problems.?  His blueprint is brave and profoundly forward-looking.  As Charles Krauthammer suggests, ?It seeks nothing less than to adapt the currently unsustainable welfare state to the demographic realties of the 21st century.?  Those who disagree with his proposal must not engage in the usual demagoguery, which has already begun, but engage his ideas and proposals.  His is the first serious attempt to confront the brutal facts of this nation?s fiscal crisis.  It should be the basis for the discussion of solutions, not an opportunity to demonize with irrational demagoguery!  May God give our political leaders the temerity, fortitude and wisdom to face up to the crisis of government dependency that they have created and seek to solve it.  We must redefine the role government should play in our lives.  Congressman Ryan has given us the opportunity to do so.  May we not let this moment pass without a serious discussion at the national level of this very question.

See Charles Krauthammer in the Washington Post (7 April 2011); David Brooks in the New York Times (5 and 8 April 2011); Paul D. Ryan in the Wall Street Journal (5 April 2011); Yuval Levin in Time (4 April 2011); and Robert Samuelson in the Washington Post (10 April 2011).

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