Wrong Path

As the United States gradually emerges from its worst recession since the 1930s, Washington has again turned its attention to the nation’s debt. Both parties agree it’s a serious problem. Many Republicans now claim it’s our most serious problem, a national emergency that requires us to reconsider how, and whether, the federal government should provide for the poor, the sick, and the elderly.

House Republicans have already concluded that the country has no choice but to gut its popular entitlement programs. On April 15 they passed a budget plan that would reduce the nation’s debt by privatizing Medicare and cutting funds for Medicaid, food stamps, and low-income housing. Oddly, their plan, titled “The Path to Prosperity,” would also repeal both the financial-reform bill, which has little to do with the deficit, and the Affordable Care Act, which is expected to reduce it.

Rep. Paul D. Ryan (R-Wis.), who came up with the plan, is, like many other House Republicans, a born-again deficit hawk. Before his recent conversion, which followed the last general election, he supported President George W. Bush’s “temporary” tax cuts, two unfunded wars, and an expensive prescription-drug program, all of which helped turn a budget surplus at the beginning of the last decade into a staggering shortfall of $438 billion by the end of Bush’s second term. Not incidentally, Ryan and his party—as well as too many Democrats—also supported the lax financial regulations that led to the credit crisis in 2008, plunging the federal government even deeper into debt as it picked up the slack in the economy and tended to Wall Street’s self-inflicted wounds. Since then, total federal debt has grown almost as large as the gross domestic product.

Because annual budget deficits are the difference between spending and revenue, the most sensible way to curb them involves cutting the former while increasing the latter. A budget plan whose spending cuts are almost completely offset by tax cuts is therefore unlikely to have been motivated by a sincere concern for the nation’s future solvency. The House Republicans’ plan, which would cut spending by $4.3 billion over ten years but also cut tax revenues by $4.2 billion, is really a Trojan horse: underneath its imposing shell of “fiscal discipline” is an army of heedless ideologues whose real goal is to shrink government until it’s “small enough to drown in a bathtub.” To quote Ryan himself, “This isn’t a budget. This is a cause.”

Unfortunately, it’s a cause that favors only a few Americans, to the disadvantage of most. “The Path to Prosperity” promises more prosperity to the already prosperous, more insecurity to the middle class, and more hardship to the most vulnerable among us. Not only would it extend all the Bush tax cuts, including cuts for the richest Amercans that would cost the federal government $700 billion over the next decade; it would also lower the top tax rate, for both individuals and corporations, from 35 to 25 percent.* Meanwhile, the poor and the disabled would be asked to do more with less: less funding for health care, education, even food. As for the unemployed, Ryan’s message to them is that they’re suffering not because the financial-services industry blew up the economy, but because they’re spoiled: “The safety net should never become a hammock, lulling able-bodied citizens into lives of complacency and dependency,” his plan instructs us.

Two days before the House Republicans passed their plan, and less than a week after negotiating a last-minute budget compromise for the rest of 2011, President Barack Obama presented a very different approach to deficit reduction in a speech at George Washington University. His proposal would also cut discretionary spending—including $400 billion from the military—but it wouldn’t dismantle Medicare or skimp on Medicaid. And it would ask the wealthy to take up a greater share of the burden. The president’s plan would limit itemized deductions for the richest 2 percent of taxpayers and allow the Bush tax cuts for the top income bracket to expire. His plan would cut spending on health care—the government’s fastest growing expense—not by forcing the poor and elderly to pay for more of it themselves, but by using the government’s purchasing power to drive down drug prices and medical fees.

Like the Republicans’ “Path to Prosperity,” the president’s proposal is more than a budget plan. It, too, is a kind of cause, affirming the nation’s commitment to fairness and decency. In his speech, the president reminded us that rugged individualism is only part of the American story. We’re not just a market; we’re also a community, one that recognizes “that no matter how responsibly we live our lives, hard times or bad luck, a crippling illness or a layoff may strike any one of us. ‘There but for the grace of God go I,’ we say to ourselves.” Now is no time to stop saying it.

April 19, 2011

*An earlier version of this editorial suggested, incorrectly, that the cost of all the Bush tax cuts over the next ten years would be $700 billion.


Related: To the Bone, by Nathan Pippenger

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