Ryan Explains Republican Alternative Budget

In a major victory for Senate Republicans last night, Sen. Mike Johanns (R-Neb.) offered an amendment that bars using the budget reconciliation process for cap and trade which passed by a stunning 67-31 vote.  Sen. Barbara Boxer (D-Ca.) made floor speech after floor speech in an attempt to convince folks that cap and trade was not a carbon tax, merely payments to the government to purchase the right to emit carbon.

Someone should remind Boxer of Reagan era OMB Director Dick Darman’s “duck test.” Darman famously said that if it looks like a duck, walks like a duck, and quacks like a duck, it’s a duck.  And if something looks like a tax, works like a tax…well, you get the idea. But Boxer obviously doesn’t.

Republicans Offer Full Budget Alternative

Under the leadership of Rep. Paul Ryan (R-Wis.), the ranking Republican on the House Committee on the Budget, House Republicans yesterday released their budget alternative to President Obama’s $3.66 trillion spending binge.  At a press conference yesterday, Ryan gave a very detailed comparative presentation of the stark differences between the two proposals.

“America is coping with a deep economic recession today, and facing a tidal wave of debt tomorrow,” Ryan said.  “The President’s budget exploits the current economic crisis to justify trillions in new spending, taxes and debt.  Worse, by failing to address the looming insolvency of our entitlement programs, his plan puts our nation on a path to an even more dire fiscal catastrophe in the future.”

Click here to take action and tell your Congressman to support the Republican alternative.  

For a side-by-side concise comparison of the two budgets click here (pdf).

For the full text of the legislation, the charts, graphs, summaries and statements click here

What is immediately apparent when examining both proposals is the grim outlook of America’s near-term financial future.  The first and most obvious difference between the two proposals is that the Republicans offer a 10-year budget that undertakes reform of entitlement programs, Social Security and Medicaid.  The Democrats limited their budget to five years and leave out entitlement reform.  As Ryan put it, “We are offering a 10-year budget unlike the Democrats who hide their explosive spending by not offering a full 10-year budget.”

Of the Obama budget, Ryan said, “Rather than getting spending under control, it sends spending out of control.  Rather than keeping taxes low to create jobs, it chases ever-higher spending with ever-higher taxes and results in ever-higher debt, not just a modest increase in our national debt, but an unprecedented, unsustainable increase in red ink.  The president’s budget is little more than a thinly-veiled attempt by Washington to spend its way into prosperity, tax its way into tax relief and borrow its way into debt reduction.  This simply cannot work.”

In Ryan’s Republican alternative they “propose to rescind the Democrats stimulus package starting in the year 2010 except for unemployment insurance for those who’ve already lost their jobs.  Most of the money in the stimulus package doesn’t even spend out until 2011.”  It would also repeal the “extra spending in the omnibus and go back to the levels of the continuing resolution with the exception of our nation’s primary discretionary responsibilities:  defense and veterans’ spending.”

Republicans would reform mandatory spending, converting Medicaid to an allotment to let states and governors enact reforms that would make most efficient use of spending for each state’s unique needs.  For those in or near retirement and people who are 55 years or older, your Medicare benefits would remain the same other than income-relating the prescription drug benefit.  Those 54 and younger can enroll in a new Medicare program with coverage similar to what members of Congress and federal employees receive, with a premium support payment that is income-adjusted and risk-adjusted, increasing with risk, age and health status.

Without reform, Social Security as currently structured will bankrupt.  The Republican budget also creates a trigger for reforms including modest adjustments for high-income beneficiaries five years before Social Security goes bankrupt.  Republicans admit this is a first step not a conclusive solution.

The alternative budget also avoids the huge tax increase scheduled at the end of 2010 by making the 2001 and 2003 tax relief permanent, it would permanently extend the alternative minimum tax patch and offers folks an option of entering a two-tiered flat tax option with generous personal exemptions.

Most importantly, the Republican budget endorses responsibly yet aggressively making use of our country’s own natural resources in drilling the Outer Continental Shelf and exploring the Arctic plains while streamlining the leasing process.  This boost in domestic energy exploration would provide an explosion of millions jobs both directly and in support industries and it would offer the funding to invest in research, development and commercialization of alternative, renewable fuels and technologies.   The Democrat budget seeks to cripple domestic energy in their attempt to force the country into reliance on energy sources that do not yet exist with no transition sources available.

In a HUMAN EVENTS exclusive interview, Rep. Ryan spoke about outreach to Blue Dog Democrats in an effort to get a handle on this out of control spending by the Obama administration. 

“We’re asking the Blue Dogs to vote their consciences and to vote their constituencies and to vote their rhetoric,” Ryan said.  “You know, the Blue Dogs used to have this big poster out in front of their offices… that said the national debt and here’s your share?  If they ran for Congress based on controlling the national debt, how on earth could they vote for this budget when it explodes the national debt?  We’re not trying to insult Blue Dogs, we’re trying to invite Blue Dogs to join us.  The Blue Dogs have the power to stop this budget.  There’re enough of them who call themselves Blue Dogs to stop this budget, and if they do then we can go back to the drawing board and get a better budget.  So we’re trying to invite them, we’re trying to appeal to them.”

Ryan also addressed with us the impact of the Republican proposal on America’s ability to borrow money in the near future.  “If we actually do entitlement reform and show our borrowing is going down in the out years — we’re going to have a bump because of the baby boomers — but we’re dealing with it and we’re getting it down, then it’s going to be much easier for us to sell bonds because they see we have our situation under control,” Ryan said. 

“So a lot of it is the assumption of the purchaser in the bond markets as to whether or not the Americans have their fiscal house in order or not.  So what we’re saying, and it’s what the bond markets are telling us, is if we pass legislation to restructure our finances, to get our balance sheet under control, then we’ll be able to bond finance the things we need to do in the medium term, but if we never do that then they’ll say well these people are never going to be able to pay these bonds back and they’re just going to monetize it.  There’s going to be a point where they’re going to stop buying our bonds.  There is going to be a point where they’re just going to have to cut their losses.”

Republicans have offered a realistic solution to our current economic woes with a budget that heads us in the right direction. 

Click here to take action and tell your Congressman to support the Republican alternative. 

Sen. John McCain (R-Az) reportedly plans to offer the House Republicans’ budget proposal as an amendment to replace the Dems’ budget today.  We’ll report the vote later.