Paul Ryan Exposes the Trillion Dollar Gimmick in Senator Reid’s Debt Ceiling “Compromise” Plan

Which, as I noted earlier, was the inclusion among Reid's supposed "savings" of funds for not fighting in Afghanistan and Iraq; funds that no one has included in any of their budget baselines. But Representative Ryan points that out clearly on the House Budget Committee website:
July 25, 2011
“Why, one wonders, not ‘save’ $5 trillion by proposing to spend that amount to cover the moon with yogurt and then cancelling the proposal?”-George Will, Washington Post, March 12, 2009
Claim 1: “Winding down the wars in Iraq and Afghanistan will save $1 trillion.”
Reality: The Reid plan relies on the inaccurate assumption that surge-level spending in Iraq and Afghanistan is scheduled to continue over the next decade. An honest budget cannot claim to save taxpayers’ dollars by cutting spending that was not requested and will not be spent. Senate Democrats are employing a budget gimmick that will not fool the credit markets and does not address the urgent need for Washington to get its fiscal house in order.
Claim 2: “Paul Ryan’s budget also included this savings in its deficit reduction calculation.”
Reality: False. The House-passed budget cuts $6.2 trillion in spending relative to President Obama’s Fiscal Year 2012 budget request. This $6.2 trillion figure assumes ZERO savings from the global war on terror relative to the President’s budget.
Background
The $2.7 trillion debt-limit increase proposal offered by Senate Majority Leader Harry Reid contains a $1 trillion gimmick meant to disguise the plan’s shallowness on spending cuts. Supporters of the Reid plan are measuring their savings against a baseline that assumes the continuation of surge-level spending in Iraq and Afghanistan, even though the President has neither requested this funding nor signaled that he might request it. Instead, the President has signaled the opposite: a troop drawdown over the next few years. In other words, the Reid plan is claiming credit for “savings” that were already scheduled to occur, and for “cutting” spending that no one has requested.
Rather than defend this gimmick on the merits, supporters of the Reid plan are defending it by claiming that House Republicans “also included” this $1 trillion in savings when calculating spending reductions in the budget resolution that passed the House last April. This claim is false. The House-passed budget cuts $6.2 trillion in spending relative to President Obama’s FY2012 budget request, and this spending reduction assumes ZERO savings from the global war on terror relative to the President’s budget.
In the interest of maximum transparency, House Republicans produced additional estimates in order to provide a broad range of comparisons by which outsiders could judge the seriousness of the their budget’s commitment to real spending cuts and controls.
For instance, Table S-4 of the House-passed budget provides two savings estimates. The first estimate compares the House-passed budget to the “current law” baseline used by the Congressional Budget Office [CBO], even though House Budget Committee Republicans have consistently noted that the CBO current-law baseline is not the most reasonable budget baseline with which to compare future-year budget plans. For example, the current-law baseline assumes a $3.5 trillion across-the-board tax increase in 2013, as well as a continuation of spending for the global war on terror at its current level for the rest of the decade, with upward adjustments for inflation. The CBO has noted that these policy outcomes are unlikely, which is why it has also constructed an “alternative fiscal scenario” baseline that assumes more realistic outcomes.
In order to provide a more relevant comparison, House Budget Committee Republicans provided a second estimate in Table S-4, comparing the House-passed budget to President Obama’s FY 2012 budget request. This comparison makes clear that, even with no savings attributed to the troop drawdown and with identical numbers to the President’s on the war on terror, the House-passed budget cuts spending by $6.2 trillion relative to the President’s request.
It’s one thing to include, as the House-passed budget does, information about savings relative to the CBO’s current-law baseline as part of an effort to be comprehensive and transparent. It’s another to claim, as supporters of the Reid plan are claiming, that such “savings” represent a major commitment to cutting spending. It simply isn’t true.
It is encouraging to see Senate Democrats acknowledge that job-destroying tax increases are a bad idea – and that they are ready to work with House Republicans to cut government spending. Yet it is critical for policymakers to maintain credibility as they work together to deal responsibly with the debt ceiling. Senator Reid’s misleading claims will not pass muster with credit markets. Such gimmickry does a disservice to the American people, who deserve responsible, honest leadership.
Nothing I can, or need, to add. Save for saying that if you choose to do as is widely expected Mr. Obama to ask Americans tonight in his speech, that is, and call their Congressional Representatives and Senators and make their wishes known, I would ask that you take Mr. Ryan's argument into consideration and reject the smoke-and-mirrors chicanery of the "Reid Plan" and instead choose the "Boehner plan".
As always, we're interested in your opinion, kind reader?
Paul Ryan brings Obama’s spending history up to date

Alternate headlines: "Timelines of a spending spree", or, "$4 trillion later; how we got here from there". But Paul Ryan calls it what it is, "A Brief History of President Obama's Fiscal Record"; though in my opinion he left out the word "dismal" between "Fiscal" and "Record", most likely in the name of politeness. It can be found at this page on the House Budget Committee's website.
It really is a definitive timeline of not only each major spending bill signed by the O!ministration, but also of each major pronouncement made by the President that was related to, or was meant to influence, fiscal issues; complete through his latest attempts to duck his responsibility to lead the debt ceiling increase debate. Each entry is has links that pertain to that episode, as well as a running tally on the amount of debt held by the American public listed as a sort-of footnote (the amount of debt held by the public is the portion of the total national debt the public owns in the form of securities and bonds, and does not include foreign holdings, individual or sovereign, or Federal Reserve bank holdings-so don't be confused because it is less than the $14+ trillion cited in the press).
With the debt ceiling negotiations reaching a critical phase, and ramping up to a frantic pace, their will be mud slinging and finger pointing a plenty; indeed, I've already had my fill of hearing how all our problems are due to the "Bush tax cuts", medicare part D, and two "unfunded wars of conquest" (the characterization of the war on terror most popular among the far-left)-when the most these things could have added over the last 10 years is on the order of 2.5 trillion on the outside. But I've expected the "I blame BOOOOSH!" brigade to go into action for a while now.
So do what I do; arm yourself with stubborn facts and inconvenient truths, so you can refute this hyperbole with the sober fact that Mr. Obama has increased the national debt by nearly the same amount as Mr. Bush, but sadly has done so in 1/4 of the time. As we often say, read the whole thing. And in this case, bookmark it for future use.

What are your impressions of this recounting? Do you think it a helpful debating tool?
So, just what is a reduction in tax code spending?

Would you believe..?
During Mr. Obama's decidedly lackluster and unimpressive speech yesterday I found myself puzzled by a few things; maybe our kind readers can do a brother a solid and put me some knowledge.
1) Why on earth did he ask the co-chairs of his phony-baloney deficit commission to attend since he wasn't planning on acknowledging them or even talking up any of the commission's ideas in his speech ! Can you imagine how much of a chump they must have felt like? It seemed to me that they were merely props for him to use, or not. Which, you know, seems to me to be an apt metaphor for the commission as a whole...
2) Why would he invite Paul Ryan to this event only to openly disparage him, his plan, and assert that Ryan wished death, suffering, and all manner of hardship on children, the poor, and old people? Was it motivated by some Chicago style, "in your face", expression of machismo that I'm unfamiliar with? Was it like a jungle primate, demonstratively acting out to intimidate his competition (I know, I know, I'm a terrible RAAAAAAACIST! for using such a comparison-whatever...)? Or was it simply part of Obama's culture, as the multi-culti-identity-politics-apologists often say. Did Obama do it just so that in barbershops across the nation folks could wildly exclaim, "OOOOOOOOH, Obama done served that muthaf@&ker!"
Or, you know, maybe it's some of that "New Kind of Politics" that he always droned on about during the 2008 campaign, and I just don't recognize the "new tone" or "CIVILITY NOW!" style of expression...
3) And seriously, what is up with making up yet another po-mo euphemism; just what exactly is a "reduction in tax code spending"? Sounds an awful lot like a tax increase to me. And here I thought the official code words for that in Democrat lexicon was "investments". I wonder when the Democrat's guide to lying style guide officially stopped recommending Mr. Clinton's favorite characterization...
But then, maybe Obama needed to be able to talk about reducing some kind of spending, other than defense spending that is, in order to get the point across to all the rubes that he, Captain Kickazz, was the true-blue deficit busting budget hawk. 'Cuz he used the word "reduction"...
Of course, it's more of the same old BS he's always been full of. Dan linked to many reactions earlier, but I'll add a couple of notable ones; the editors of the WSJ characterized the speech as the most dishonest in decades, and Krauthammer used just about every synonym for "lie" that he could, without saying so directly. The speech was all about optics, and devoid of substance. It was a rehashing of all of the platitudes we've heard, ad nauseam.
Obamacare is going to save the government money...Right.
We have to further cut back our defense spending (Surprise! Gates!, and you thought the cuts you'd made so far were impressive).
We have to spend more, to save...
Oh, and his old favorite, "we have to raise taxes on the rich!".
The last one makes me laugh especially; here's why. I've been crunching some IRS supplied numbers lately, to consider this argument fairly (more on that to come). It turns out that his critics are correct, that all of the taxable income of those who make more than 200k/yr in our nation, not including dividends and capital gains, amounts to approximately 1.2 trillion dollars. Presumably, we already receive about 1/3 of that as revenue, so even of the government seized all income in excess of 200k/yr there would still remain a deficit of 1/2 to 3/4 of a trillion dollars! So where do you think they'd have to go to get that?
This reveals the larger lie behind all of Obama's class warfare rhetoric. There is simply not enough money to seize from the rich alone to balance the budget, no matter what Michael Moore says. That will have to come on the backs of the middle class. Which brings me to a perhaps even more disturbing, underlying, mindset that Obama's newest euphemism reveals; the assumption that all GDP belongs to the government a priori, and they benevolently decide how much to let you keep. I can't reason out any other way to interpret the association of "spending" with lowering tax rates, although I've heard too often the excuse that it's a benign, wonkish, accounting expression. No, it either refers to the disturbing idea I referred to, or, Obama's willfully lying to suit his purposes. Either way, I'm not satisfied.
What do you think, kind reader?
Paul Ryan on the actual fierce urgency of now
And he's not using it as just another throw-away line, you know, a cliche-JUST WORDS!, like Present-dent Obeyme. No, the Wisconsin Congressman is talking about real choices that we face, as a nation, in the not-so-distant future:
"Are we going to reclaim the American idea -- an entrepreneurial economy where you make the most of your life, you tap your potential, we reinvigorate the principles of liberty, freedom, free enterprise -- and defend the morality of that -- or are we going to abandon that and switch over toward a European-style, cradle-to-grave welfare state where we drain people of their incentive and will to make the most of their lives and make them more dependent on the government?"
"[Progressives] believe that we ought to have the government so much more involved in our lives, as the more determining factor in our lives, rather than ourselves. So we have to ask ourselves a question: Do we want an entrepreneurial society that gets prosperity turned back on in the 21st century, where individual merit, entrepreneurial activity defines the American economy, or are we going to have more and more people dependent on the government for their livelihoods? And that is going to drain them of their ability and their will to make the most of their lives. That's sort of the fork in the road we are at, and it's really being precipitated by the current direction of our government and the debt crisis because of entitlement explosion that's coming in the future. Those things are coming together. We've got to make a decision in 2010 and in 2012 what kind of country we want to be in the 21st century economy."
Ryan, a refreshing change from the archetypal, ingratiating, phony career politician, contrasts the opposing ideologies clearly, succinctly, and starkly; which, in my humble opinion, is what more conservatives need to be doing these days. Outline clear choices for the public, instead of "Democrat" vs "Democrat-lite", and let them make their choice.
But in addition to his refreshing candor and economic prowess, Mr. Ryan also has a vision of what we must do to get our economy, and indeed the nation, back on the right track. That vision is contained a plan called, "A Roadmap for America's Future"; a link for an interactive site where his plan is explained is here, and a link to the Congressional document is here. In short, his plan addresses healthcare through market based processes, as well as reforming entitlements, the budgetary process, and the tax codes. The tax code part is one of my personal favorites:
A world-class tax system should be simple, fair, and efficient. The U.S. tax code fails on all three counts. The system is notoriously complex, as families must spend significant time and money negotiating a labyrinth of deductions and credits, a tangle of different rules for characterizing income, and a variety of schedules for taxing that income. The code is also patently unfair, as many of the deductions and preferences in the system – which serve to narrow the tax base – are mainly used by a relatively small class of mostly higher-income individuals. It is also highly inefficient, as tax considerations, rather than economic fundamentals, often distort individual decisions to work, save, and invest, leading to a misallocation of resources and slower economic growth.
This reform proposal responds in a fundamentally American way: it offers individuals a choice. Individuals can choose to pay their Federal taxes under the existing code, with all the familiar deductions and schedules; or they can move to a highly simplified income tax system. The simplified plan broadens the tax base by clearing out nearly all of the existing deductions and credits, compresses the tax schedule down to two low rates, and retains a generous standard deduction and exemption level. The tax form for this system would fit on a postcard. The goal is a more simple, fair, and efficient tax code, the components of which are described below.
Sounds like a winning idea to me, Paul. But I'm not the only one taking note, listen to the observations of Niall Ferguson of Harvard Business school who also recognizes the value of Ryan's proposals:
Ferguson called for what he called “radical” measures. “I can’t emphasize strongly enough the need for radical fiscal reform to restore the incentives for work and remove the incentives for idleness.” He praised “really radical reform of the sort that, for example, Paul Ryan [the ranking Republican on the House Budget Committee] has outlined in his wonderful ‘Roadmap’ for radical, root-and-branch reform not only of the tax system but of the entitlement system” and “unleash entrepreneurial innovation.” Otherwise, Ferguson warned: “Do you want to be a kind of implicit part of the European Union? I’d advise you against it.” [emphasis-ed.]
There are many conervatives in the GOP leadership, the grass-roots groups, and among the rank and file, that strongly recommend that the Republicans as a whole, and indeed the entire conservative "movement", get behind Paul Ryan's plan; very much in the same way that like minded folks got behind, "The Contract for America", in the early 1990's. I am in complete accordance with this notion and, speaking as one who writes letters and telephones my "congresscritters"ad nauseam, would urge all conservatives to not only become familiar with the details of Ryan's plan, but to strongly urge their representatives to get behind it as well. Not simply for political reasons, but because of value to our nation, at a critical juncture, of the entire plan.
I admire Paul Ryan greatly, and think that he could become a major player in national level politics. Although our old pal sdferr from the PW commentariat thinks him an excellent legislator, would prefer to see him stay in the House of Senate, and often takes me to task for suggesting otherwise at this juncture, I confess to secretly wishing to see him somewhere on the presidential ticket in 2012; if motivated only by the dearth of talent that I see now at that level. I mean, does Daniels/Ryan, or Christie/Ryan, really sound that bad to you, dear reader?
Still, whether as VP, or Speaker of the House, I believe that Paul Ryan knows the right direction for our nation, can articulate his vision well, is capable of summarizing perilously "wonky" solutions in a way that laypersons and dilletantes can easily grasp, and who's tall, dark, and handsome good looks don't hurt either. Indeed, the only shortcoming I percieve is a lack of direct foreign policy experience; a persian flaw that can be overcome by surrounding oneself with the right people. He's most definitely an "Anti-Obama"; a quantity that America will surely need after 4 years of the Cloward-Piven-ist, Trans-National-Socialist, MaObama.
All-in-all, a very Reagan-esque package, if I do say so myself, and someone to keep an eye out for in the years to come. Tell me your impressions, kind reader; what do you think?





