Republican budget proposal a political document

Rep. Paul Ryan, R-Wis. Rep. Paul Ryan, R-Wis. Carolyn Kaster/AP

If a budget is a political document, then House Budget Chairman Paul Ryan, R-Wis., laid down his marker Tuesday to show how little he likes the size and scope of federal government: a dramatic and perhaps unwise stance in a close election year.

Ryan’s budget proposal, released Tuesday morning, would hand more control of Medicaid and food stamps to the states by block granting the programs.  He would repeal healthcare reform, which he calls in his budget part of a “growing and pernicious trend of government outreach into the economy,” and he would get rid of yet-to-be-determined government programs and agencies that he views as wasteful. In his budget last year, he offered more specifics about government programs he dislikes: everything from environmental protection to financial regulation.

You can practically see the Democratic opposition ads unfolding now, showcasing the way Ryan’s plan would drastically cut government spending while keeping the Defense Department’s budget in tact.

Most importantly, this budget tests Ryan’s reputation as a fiscal hawk, especially his tax plan. The latter would reduce the individual tax rates (which make up the majority of government revenue) to two brackets of 10 percent and 25 percent, while lowering the corporate tax rate to 25 percent. The Joint Committee on Taxation released a report last October saying it would hard to reduce the corporate tax rate to anything lower than 28 percent without losing money.

To pay for these tax cuts, Ryan’s budget says it would close tax loopholes: a political dodge both parties lean on heavily when talking taxes. But, for an economic nerd like Ryan, the dodge does not come across well. Which loopholes? Would it be the wildly popular mortgage interest deduction that encourages millions of Americans to buy homes, or the tax break that goes to employers that offer healthcare? And, which segment of the population would bear the brunt of the elimination of certain tax breaks: the middle class, the poor, or the wealthy?

Those answers may become clearer as Ryan makes the sales pitch for his budget throughout the week, appearing on various television programs and at two conservative think tanks.

Still, other questions remain, like the way Ryan assumes he can reduce the deficit so quickly as well as his assumptions for economic growth. According to his plan, Ryan will reduce the federal deficit to $800 billion in fiscal year 2013, a huge drop from the CBO’s latest projection that puts the deficit at $1.2 trillion. How can Ryan cut the deficit in one year by $400 billion if he plans to keep defense spending as is and propose huge tax cuts?

Secondly, his plan relies heavily on the idea that lower tax rates, little regulation, and smaller entitlement programs will jolt the economy alive again, shocking it into action. The tables at the end of his budget illustrate this best when they show revenue rising by billions of dollars throughout 2022.

“We reject calls to raise taxes, but revenue nevertheless remains steady under our budget because we close special-interest loopholes,” he writes in a Wall Street Journal op-ed. “More important, our reforms will grow the economy—and the faster the economy grows, the more revenue the government will have to meet its priorities and start paying down the debt.”

Yet, Ryan is also clear in his budget that he wants the CBO to change to way it measures government policy and that stinks of budget gimmickry, a charge he often levels at Democrats. It would be incredibly difficult to increase revenue and reduce the deficit in such a short period of time, alongside Ryan’s other plans—even with huge cuts to government spending.

Ryan opens his budget with a narrative and chart that maps out what he calls the contrasting vision between his agenda and President Obama’s. Ryan certainly has laid out an ideal for the Republicans, even if it contains gaps.

The question now is: Will the Republicans follow him as the party seeks to take over the White House and Congress, or will his budget proposal and its ideas expose fissures within the GOP?

Stay up-to-date with federal news alerts and analysis — Sign up for GovExec's email newsletters.
Close [ x ] More from GovExec

Thank you for subscribing to newsletters from
We think these reports might interest you:

  • Forecasting Cloud's Future

    Conversations with Federal, State, and Local Technology Leaders on Cloud-Driven Digital Transformation

  • The Big Data Campaign Trail

    With everyone so focused on security following recent breaches at federal, state and local government and education institutions, there has been little emphasis on the need for better operations. This report breaks down some of the biggest operational challenges in IT management and provides insight into how agencies and leaders can successfully solve some of the biggest lingering government IT issues.

  • Communicating Innovation in Federal Government

    Federal Government spending on ‘obsolete technology’ continues to increase. Supporting the twin pillars of improved digital service delivery for citizens on the one hand, and the increasingly optimized and flexible working practices for federal employees on the other, are neither easy nor inexpensive tasks. This whitepaper explores how federal agencies can leverage the value of existing agency technology assets while offering IT leaders the ability to implement the kind of employee productivity, citizen service improvements and security demanded by federal oversight.

  • IT Transformation Trends: Flash Storage as a Strategic IT Asset

    MIT Technology Review: Flash Storage As a Strategic IT Asset For the first time in decades, IT leaders now consider all-flash storage as a strategic IT asset. IT has become a new operating model that enables self-service with high performance, density and resiliency. It also offers the self-service agility of the public cloud combined with the security, performance, and cost-effectiveness of a private cloud. Download this MIT Technology Review paper to learn more about how all-flash storage is transforming the data center.

  • Ongoing Efforts in Veterans Health Care Modernization

    This report discusses the current state of veterans health care


When you download a report, your information may be shared with the underwriters of that document.