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All Da King's Men

The GOP Alternative Budget, Part II

By Da King Published: April 2, 2009

The GOP took to the steps of Capitol Hill on wednesday to announce their alternative to Obama's budget, and this time, the GOP budget included some numbers (sorta), or at least things that can be extrapolated into numbers. Yippee ! The GOP is starting to catch on to what comprises a budget. Here's GOP Representative Paul Ryan, first describing Obama's budget:

Under the president's plan, spending will top $4 trillion this year alone, and consume 28.5% of our nation's economy. His plan would mean a $1 trillion increase to the already unsustainable spending growth of our nation's entitlement programs -- including a "down payment" toward government-controlled health care and education; a $1.5 trillion tax increase to further shackle the small businesses and investors we rely on to create jobs; a massive increase in energy costs for families via cap and trade. Moreover, the Obama plan would result in an exploding deficit, a doubling of the nation's debt in five years, and an increase of that debt to more than 82% of our nation's GDP by the last year of the budget.

I'm with you, Rep. Ryan, though that last sentence about the debt reaching 82% of GDP....that's only theoretical, and won't happen until 2080. It's absurd to be laying that at Obama's feet. Obama would be 118 years old then. Something tells me the successive 10-20 presidential administrations might have more to say about what happens by 2080 (but by 2150, we're REALLY in trouble). Obama is, however, heading us in the wrong fiscal direction faster than any previous administration. No doubts there.

Here's Ryan's general description of the GOP alternative:

Instead of doubling the debt in five years, and tripling it in 10, the Republican budget curbs the explosion in spending called for by the president and his party. Our plan halts the borrow-and-spend philosophy that brought about today's economic problems, and puts a stop to heaping ever-growing debt on future generations -- and it does so by controlling spending, not by raising taxes. The greatest difference lies in the size of government our budgets achieve over time (see chart).

While our approach ensures a sturdy safety net for those facing chronic or temporary difficulties, it understands that the reliability of this protection and the other functions of government depend on a vibrant, free and growing private sector to generate the resources necessary for it.

Sounds better than what the Obama Spendocrats are offering. What are the details ?

- Deficits/Debt. The Republican budget achieves lower deficits than the Democratic plan in every year, and by 2019 yields half the deficit proposed by the president. By doing so, we control government debt: Under our plan, debt held by the public is $3.6 trillion less during the budget period.

Whoa, whoa, whoa. The GOP's aim is to half Obama's ginormous freaking deficits by 2019 ? Um, doesn't that still leave us with deficits ? We need surpluses to pay down the debt, not endless deficits and growing debt. What I just heard the GOP say is "we're bad, just not as bad as the other guys." Not very inspiring. I wonder if the Libertarians have come up with an alternative budget.

The GOP continues:

Spending. Our budget gives priority to national defense and veterans' health care. We freeze all other discretionary spending for five years, allowing it to grow modestly after that. We also place all spending under a statutory spending cap backed up by tough budget enforcement.

So, the GOP says "let's increase defense related spending and freeze everything else". No sale there either. We need to cut federal spending, not freeze it, and defense is as up for legitimate cuts as every other area. I mean, do we really need those 450 military bases in 150 countries all over the world ? Do we really need troops in Germany and Japan 65 years after WWII ? I don't think so.

Next, energy:

Energy. Our budget lays a firm foundation to position the U.S. to meet three important strategic energy goals: reducing U.S. dependence on foreign oil, deploying more clean and renewable energy sources free of greenhouse gas, and supporting economic growth. We do these things by rejecting the president's cap-and-trade scheme, by opening exploration on our nation's oil and gas fields, and by investing the proceeds in a new clean energy trust fund, infrastructure and further deficit reduction.

I like this. Far preferable to Obama's onerous and regressive tax strategies. Score one for the GOP.

Medicare entitlements:

...We preserve the existing Medicare program for all those 55 or older; and then, to make the program sustainable and dependable, those 54 and younger will enter a Medicare program reformed to work like the health plan members of Congress and federal employees now enjoy. Starting in 2021, seniors would receive a premium support payment equal to 100% of the Medicare benefit on average. This would be income related, so low-income seniors receive extra support, and high-income seniors receive support relative to their incomes -- along the same lines as the president's Medicare Part D proposal.

This is an interesting idea, but what's with the "starting in 2021" stuff ? I hate it when politicians propose things they won't be around to implement.

On taxation:

Tax Reform. Our budget does not raise taxes, and makes permanent the 2001 and 2003 tax laws. In fact, we cut taxes and reform the tax system. Individuals can choose to pay their federal taxes under the existing code, or move to a highly simplified system that fits on a post card, with few deductions and two rates. Specifically, couples pay 10% on their first $100,000 in income (singles on $50,000) and 25% above that. Capital gains and dividends are taxed at 15%, and the death tax is repealed. The proposal includes generous standard and personal exemptions such that a family of four earning $39,000 would not pay tax on that amount. In an effort to revive peoples' lost savings, and to create an incentive for risk-taking and investment, the budget repeals the capital gains tax through 2010 for all taxpayers.

On the business side, the budget permanently cuts the uncompetitive corporate income tax rate -- currently the second highest in the industrialized world -- to 25%.

In theory, great. In reality, lousy. The GOP said it would freeze spending, but it is cutting taxes, and even cutting taxes for the wealthy. I'm for all that in principle, but the country is in MASSIVE DEBT right now. We have to pay it down. And with all due respect to the GOP, y'all didn't hold spending down very well for the first 6 years of the Bush administration, did you ? Granted, Obama and the Dems are far worse, but bad isn't a great alternative to terrible.

But I'm all for the business and capital gains tax cuts to help us out of the recession.
Overall - not good enough, GOP. You have to do better.



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