AN INEFFECTIVE WAY TO REACH THE WRONG GOAL…. The defense of the House Republican budget plan, and all of its radical cuts and policy changes, couldn’t be more straightforward: there’s a debt crisis, which makes Paul Ryan’s cruelty a fiscal necessity. Deficit reduction, the argument goes, must be the top priority, and Ryan is “courageous” for making hard choices to get the budget closer to balance. The cruelty, we’re told, is for a good cause: fiscal sanity.
We know, just off the top our heads, all of the problems with this. There is no debt crisis; policymakers should prioritize jobs over the deficit; etc. But let’s also not forget that the premise is nonsense — even if deficit reduction is the goal, the GOP budget plan does a terrible job at actually reducing the deficit.
When House Budget Chairman Paul Ryan unveiled his proposal, he announced that it would reduce government spending by $5.8 trillion and reduce deficit spending by $1.6 trillion in its first ten years. But Ryan included in his spending reductions the savings from ending the wars in Afghanistan and Iraq.
That’s fine; I think we all hope that prediction turns out to be true. But those savings have nothing to do with what Ryan is proposing specifically. (Or, if you want to get technical about it, those savings should be added to Obama’s budget and the current baseline, as well.) Once you adjust for that fact, it turns out the Republican budget would reduce spending, relative to current policy and expectations, by only $4.3 billion.
“Only” is a slightly misleading term here, since $4.3 trillion dollars would still represent a large spending cut. But wait! The House Republican budget also calls for tax cuts — $4.2 trillion of them. In other words, the tax cuts in the House Republican budget would very nearly offset the spending cuts, leaving a modest $155 billion in additional savings over ten years.
I know this must seem hard to believe. The House Republican budget eliminates Medicare, guts Medicaid, and slashes domestic funding to dangerous levels. Given all of this, the budget savings should be enormous.
But they’re not, because the same GOP plan also slashes taxes, almost exclusively for the wealthy. The Republican plan to reduce the deficit treats deficit reduction as an afterthought — the goal is to transfer wealth upwards and shrink government to the point at which Grover Norquist can strangle it in a bathtub.
And as correct as Cohn’s piece is, we can go further. Paul Krugman notes that the finances of the GOP look even more fraudulent when one notices that it intends to rely on closing tax loopholes, without actually identifying which loopholes they have in mind.
Jonathan Bernstein goes even further still, explaining the projections themselves appear to be overly forgiving towards Ryan, since his numbers are “based on completely discredited Heritage economic projections” and “depend on shuttering virtually the entire government outside of Social Security, health care programs (even as modified), and defense.”
Taken together, the GOP plan to reduce the deficit barely even tries to reduce the deficit — and may not even bring the budget closer to balance at all. All of those pundits who praised Paul Ryan for his bravery and candor look like fools today, whether they care to admit it or not.