When Paul Ryan released his budget plan, his libertarian critics immediately damnated him and pointed out to a ridiculous plan for a “balanced budget” put forward by the junior Senator from Kentucky, Rand Paul. They also pointed to the side-by-side comparisons of the Ryan Plan vs the Obama Plan and the Paul Plan vs the Obama plan done by the utterly-discredited CATO Institute.
But they’re wrong. What the CATO Institute should do is a side-by-side comparison of the Ryan Plan and the Paul Plan. In other words, the CATO Institute should compare how these two conservative plans compare against each other, not how they are different from the course proposed by President Obama.
But the CATO Institute hasn’t done that and will not do that. Why? Because such a comparison would reveal the fact that the Ryan Plan is VASTLY SUPERIOR to the Paul Plan in all respects. So here’s such a comparison.
The blueprint proposed by Rep. Ryan:
- Would cut annual federal spending by $620 bn, $120 bn more than what Sen. Paul has offered.
- Would reform the Medicare program and the Medicaid program for the very first time ever, thus significantly reducing their costs.
- Would grant Medicaid blocks to the states, as the Nation’s Governors have urged, and would allow the states to manage this program on their own, thus allowing them to rein in the biggest driver of state budget deficit.
- Would reform the tax code and cut tax rates, including the CIT rate to 25% (down from 35%), thus inducing economic growth and encouraging companies to settle in, build in, and hire in, the US. (It would not, however, implement the FairTax.)
- Would repeal Obama’s socialized medicine scheme and save the taxpayers the expense of running it.
- Would end all bailouts and reform Fannie Mae and Freddie Mac.
- Would terminate hundreds of failing/duplicatory government programs.
- Would reform agricultural subsidies.
- Would cut the defense spending topline over the next 5 FYs by $78 bn and ratify all reforms proposed by Secretary Gates.
- Would obligate the President and the Congress to propose specific reforms of the SS program.
- Would reduce federal spending from 24% of GDP (the current level) to 18% of GDP.
- Would open the OCS, the ANWR, NPR-A, deepwater areas, and shale formations to drillers.
- Would not preclude further spending cuts.
The Paul Plan is much less ambitious and decisively inferior. It:
- Would reduce annual federal spending, compared to President Obama’s proposals, by only $500 billion, $120 bn less than the plan offered by Rep. Ryan.
- Would not reform any entitlement programs, let alone reduce their costs – thus leaving a 56% portion of the federal budget, which even leftists like Fareed Zakaria admit is the driver of budget deficits and public debt.
- Would defer any reform of any entitlement programs until 2016 – and even then, it wouldn’t say how to reform them.
- Would not reform the tax code, open any areas to drillers, reform tort law, abolish the EPA (which is hurting the economy of Sen. Paul’s home state), or repeal any federal regulations. Yet, it absurdly assumes that even without such reforms, the economy will somehow rebound so magnificently that it will produce $1.15 trillion of additional annual revenue to erase the budget deficit. It will not, absent these economic reforms.
- Would not obligate the Congress nor the President to propose any specific reforms of any entitlement programs.
So when you lay down Rep. Ryan’s plan and Sen. Paul’s plan next to each other, and compare them, you clearly see (if you’re an honest person) which plan is the better one: Rep. Ryan’s plan. It would do more than cut federal spending, it would change the status quo in Washington for the first time ever.
On the other hand, Sen. Paul’s plan is a joke, and never was anything more than that. True, it would cut federal spending – but by $120 bn less than the Ryan Plan, and it would not cut entitlement spending (which constitutes 56%-63% of the total federal budget) by one cent. It would make deeper cuts to defense spending than the Ryan Plan, and it would not implement ANY of the many capitalist reforms America needs.
UPDATE: Oh dear, oh dear. Sen. Paul has significantly pared down his demand for annual budget reductions. He now demands only a $200 bn cut of annual federal spending. Vide: