Congressman Paul Ryan has completed his work on the new budget proposal, one that he claims will leave the nation with a budget surplus by 2023. Lori Montgomery (Washington Post) has a decent piece reviewing some of the details. The budget looks like very much like the last one (e.g., reductions in future spending on Medicare and the Affordable Care Act; little specificity on Social Security reform; more cash for the Pentagon). The big difference: revenues.
The one big new development: Ryan’s latest blueprint would balance the budget… a goal achieved not primarily through deeper spending cuts, but by the addition of more than $3.2 trillion in new tax revenue.
The tax hike is already in effect. Ryan (R-Wis.) merely adopts new revenue projections laid out by the nonpartisan Congressional Budget Office in the wake of a year-end deal to raise rates on income over $450,000. But the impact on his budget is huge.
One can imagine that retaining the tax increases that emerged from the fiscal cliff will enrage some Republicans. But it is difficult to arrive at a balanced budget without those revenues (some $40 trillion over 10 years). There are better ways to raise revenues, of course. In my perfect world, fundamental tax reforms that eliminate the largest tax expenditures would be combined with a carbon tax. Moreover, there is a strong case for cutting rather than increasing defense spending. But those are different topics that are best put off for another day.
What proves more interesting than Ryan’s budget is the fact that the Senate is finally entering the game.
Senate Budget Committee Chairman Patty Murray (D-Wash.) is working on her own blueprint, the first Senate budget since 2009. That framework proposes to reduce future borrowing by about $2 trillion, split evenly between tax increases and spending cuts.
If Murray’s budget is adopted by the Senate, congressional leaders see a Ryan-Murray conference committee as the most likely forum for negotiations over a new deficit-reduction package.
Imagine that: a return to the old politics of budgeting. Two chambers, two bills, conference committee deliberations, compromise and [insert drum roll here] accountability.