ECONOMICS:MITT ROMNEY'S choice of Paul Ryan as his running mate led to a wave of pundit accolades. Now, declared writer after writer, we're going to have a real debate about the nation's fiscal future. This was predictable: Never mind the Tea Party, Ryan's true constituency is the commentariat, which years ago decided that he was the Honest, Serious Conservative, whose proposals deserve respect even if you don't like him.
But he isn’t and they don’t. Ryanomics is and always has been a con game, although to be fair, it has become even more of a con since Ryan joined the ticket.
Let’s talk about what’s actually in the Ryan plan, and let’s distinguish in particular between actual, specific policy proposals and unsupported assertions. To focus things a bit more, let’s talk – as most budget discussions do – about what’s supposed to happen over the next 10 years.
On the tax side, Ryan proposes big cuts in tax rates on top income brackets and corporations. He has tried to dodge the normal process in which tax proposals are “scored” by independent auditors, but the nonpartisan Tax Policy Center has done the maths, and the revenue loss from these cuts comes to $4.3 trillion over the next decade.
On the spending side, Ryan proposes huge cuts in Medicaid, turning it over to the states while sharply reducing funding relative to projections under current policy. That saves about $800 billion. He proposes similar harsh cuts in food stamps, saving a further $130 billion or so, plus a grab-bag of other cuts, such as reduced aid to college students. Let’s be generous and say that all these cuts would save $1 trillion. On top of this, Ryan includes the $716 billion in Medicare savings that are part of Obamacare, even though he wants to scrap everything else in that act.
Despite this, Ryan has now joined Romney in denouncing President Barack Obama for “cutting Medicare”; more on that in a minute.
So if we add up Ryan’s specific proposals, we have $4.3 trillion in tax cuts, partially offset by about $1.7 trillion in spending cuts – with the tax cuts, surprise, disproportionately benefiting the top 1 per cent, while the spending cuts would primarily come at the expense of low-income families. Overall, the effect would be to increase the deficit by about $2.5 trillion.
Yet Ryan claims to be a deficit hawk. What’s the basis for that claim?
Well, he says that he would offset his tax cuts by “base broadening”, eliminating enough tax deductions to make up the lost revenue.
Which deductions would he eliminate? He refuses to say – and realistically, revenue gain on the scale he claims would be virtually impossible.
At the same time, he asserts that he would make huge further cuts in spending. What would he cut? He refuses to say.
What Ryan actually offers, then, are specific proposals that would sharply increase the deficit, plus an assertion that he has secret tax and spending plans that he refuses to share with us, but which will turn his overall plan into deficit reduction.
If this sounds like a joke, that’s because it is. Yet Ryan’s “plan” has been treated with great respect in Washington.
He even received an award for fiscal responsibility from three of the leading deficit-scold pressure groups.
What’s going on? The answer, basically, is a triumph of style over substance. Over the longer term, the Ryan plan would end Medicare as we know it – and in Washington, “fiscal responsibility” is often equated with willingness to slash Medicare and social security, even if the purported savings would be used to cut taxes on the rich rather than to reduce deficits.
Also, self-proclaimed centrists are always looking for conservatives they can praise to showcase their centrism, and Ryan has skilfully played into that weakness, talking a good game even if his numbers don’t add up.
The question now is whether Ryan’s undeserved reputation for honesty and fiscal responsibility can survive his participation in a deeply dishonest and irresponsible presidential campaign.
The first sign of trouble has already surfaced over the issue of Medicare. Romney, in an attempt to repeat the GOP’s successful “death panels” strategy of the 2010 midterms, has been busily attacking the president for the same Medicare savings that are part of the Ryan plan.
And Ryan’s response when this was pointed out was incredibly lame: He only included those cuts, he says, because the president put them “in the baseline”, whatever that means.
Of course, whatever Ryan’s excuse, the fact is that without those savings his budget becomes even more of a plan to increase, not reduce, the deficit.
So will the choice of Ryan mean a serious campaign? No, because Ryan isn’t a serious man – he just plays one on TV.
– (New York Times service)
