A Policy of Dessert Now, Spinach Later
Considering the situation we are in today, the Ryan plan’s modest reduction to the growth of government and its lack of credible commitments to reforming entitlement programs mean that it won’t address our fiscal problems.
This article was originally published in The New York Times. Senior research fellow Veronique de Rugy contributed to the New York Times Room for Debate question "The Ryan Budget: Policy, or Just Politics?
As an economist, I can’t tell you whether the Ryan budget is just political gesturing, as some have suggested. But if it is a serious policy proposal, I can tell you that it would be unsustainable. And that’s not because, as many on the left lament, it spends too little. It’s because it spends way too much. Considering the situation we are in today, the plan’s modest reduction to the growth of government and its lack of credible commitments to reforming entitlement programs mean that it won’t address our fiscal problems.
House Republicans should have offered a much stronger starting point, with a serious proposal to curb Medicare costs.
Paul Ryan deserves praise for his continuous efforts to address the explosion of Medicare spending. Also, his proposed tax reform would make our system flatter and less burdensome, both steps in the right direction. However, reducing taxes today is not as noble as it seems if lawmakers aren’t willing to cut spending enough to ensure that future generations don’t foot today’s bill. Sadly, this plan doesn’t make the hard choices necessary and continues to kick the can down the road.
Here are five main reasons:
1. It would increase spending from $3.6 trillion in 2013 to $4.9 trillion in 2022 and wouldn’t balance the budget for 28 years.
2. Apart from eliminating a few political villains like high-speed rail and the president’s health care law, it fails to zero out programs, agencies or departments that should be terminated because they are the responsibility of the state and local governments or the private sector.
3. It reneges on the reductions in military spending that lawmakers had agreed to. (It would require — through reconciliation — that cuts be found elsewhere.) If Republicans didn’t want defense cuts, they shouldn’t have made them part of a deal to increase the debt ceiling last summer. Moreover, a serious plan should put everything on the table; clearly that ought to include defense spending.
4. It once again fails to reform Social Security. Yet, Republicans continue to support cuts to the payroll tax without reductions in Social Security benefits.
5. It would push off urgent Medicare reforms for a decade, at least. But Medicare could run into trouble before then. And today’s Congress can’t force future Congresses to do anything, so the promise to reform Medicare in 10 years shouldn’t be taken seriously.
This plan is a “dessert now, spinach later” policy. In this proposal, the elderly would get the dessert now, and one day, younger people will have to eat all the spinach. Given the inevitable negotiations and compromises to come, Chairman Ryan should have offered a much stronger starting point — one that recognizes we all need to eat some spinach, now and later. Otherwise no one will get any dessert.
Photo Credit: White House/Pete Souza