The battle of the budgets
Say you're running a business, and you find yourself awash in red ink. You realize it's time to retool your approach, and fast. So you ask two different employees to each come up with a budget. You'll go with whoever writes the better plan.
What are the chances that one of them will submit a budget that never puts you in the black, that suggests you raise prices and spend still more money? Practically nil.
Yet that's exactly what the Senate expects the federal government to do. Spending would go up right away. So would taxes. And it doesn't even touch entitlement programs such as Medicare — which, along with interest on the debt, will take up all tax revenues by 2025.
It's easy to shrug such warnings off. But doing so raises the very real risk of a debt crisis that can hurt all Americans, especially the poor and middle class. Growing inflation is one danger, as is higher interest rates. Mortgages, credit cards, consumer loans and business loans would become more expensive for millions of Americans.
Higher interest rates would make it more costly for families to borrow money. That means they'd have to delay purchasing their first home. Their ability to build financial security would be compromised. The economy would weaken, leading to fewer job opportunities and lower wages for workers.
Fortunately, the “other employee” in the scenario laid out above has come up with a smarter approach. The House plan, spearheaded by Rep. Paul Ryan. R-Wisc., would balance the budget in 10 years and cut the annual growth in spending from 5 percent to 3.4 percent. Even better, it would repeal ObamaCare. And it dares to reform Medicaid and Medicare.
The Ryan budget also prevents a series of damaging cuts to our military set to occur under the “sequestration” budget ax. At a time when North Korea and Iran are racing to acquire nuclear missiles, cutting defense is the last thing we should be doing.
Its chief failing? Taxes. True, the Ryan budget lays out important principles for tax reform and rightly rejects closing tax preferences (“loopholes”) just to raise revenue. Despite repealing ObamaCare, however, it keeps the program's higher tax revenues. All of the president's signature health care law should be repealed, including its tax increases.
Still, this is a strong plan that deserves serious consideration.
There are six things that each budget from the House, Senate and president should accomplish (laid out in Heritage's plan “Saving the American Dream”):
• Balance the budget in less than 10 years, without raising taxes, and keep the budget in balance thereafter.
• Swiftly overhaul entitlement programs, including Social Security, to guarantee economic security to seniors while making the programs affordable.
• Repeal ObamaCare in its entirety.
• Fully fund defense.
• Roll back discretionary spending.
• Roll back recent tax increases with a sweeping, growth-oriented tax reform plan and cap taxes at the historical average of 18.5 percent.
The Senate budget is a nonstarter. The Ryan budget is a vast improvement. In a time of economic uncertainty, replete with unsustainable budget increases, we need to stop dodging hard choices. We know what needs to be done. It's time to do it.
Ed Feulner is president of The Heritage Foundation (heritage.org).
Show commenting policy
TribLive commenting policy
You are solely responsible for your comments and by using TribLive.com you agree to our Terms of Service.
We moderate comments. Our goal is to provide substantive commentary for a general readership. By screening submissions, we provide a space where readers can share intelligent and informed commentary that enhances the quality of our news and information.
While most comments will be posted if they are on-topic and not abusive, moderating decisions are subjective. We will make them as carefully and consistently as we can. Because of the volume of reader comments, we cannot review individual moderation decisions with readers.
We value thoughtful comments representing a range of views that make their point quickly and politely. We make an effort to protect discussions from repeated comments either by the same reader or different readers.
We follow the same standards for taste as the daily newspaper. A few things we won't tolerate: personal attacks, obscenity, vulgarity, profanity (including expletives and letters followed by dashes), commercial promotion, impersonations, incoherence, proselytizing and SHOUTING. Don't include URLs to Web sites.
We do not edit comments. They are either approved or deleted. We reserve the right to edit a comment that is quoted or excerpted in an article. In this case, we may fix spelling and punctuation.
We welcome strong opinions and criticism of our work, but we don't want comments to become bogged down with discussions of our policies and we will moderate accordingly.
We appreciate it when readers and people quoted in articles or blog posts point out errors of fact or emphasis and will investigate all assertions. But these suggestions should be sent via e-mail. To avoid distracting other readers, we won't publish comments that suggest a correction. Instead, corrections will be made in a blog post or in an article.
- Foreign influx in Allegheny County at ‘tipping point’
- Steelers hope group of low-budget cornerbacks can deliver
- Steelers notebook: Ben believes rookie WR Bryant can contribute
- Steelers WR Wheaton wants to produce after injury-plagued rookie year
- Inside the ropes: Roethlisberger may have his big receiver
- Dollar Tree buying Family Dollar for $8.5 billion
- Former Gateway coach Smith is ‘perfect fit’ for Penn State football staff
- Home sellers are able to remain mum about violent crimes committed there
- Pirates notebook: Hurdle, Huntington on same page
- Pirates avert sweep with 7-5 victory over Rockies
- Construction of $500M power plant in South Huntingdon stalled