Paul Ryan’s proposal would reduce projected spending by $6 trillion over the next ten years, mostly through a combination of tax changes that Ryan says would help grow the economy and a major overhaul of two of America’s largest entitlement programs, Medicare and Medicaid. While that may seem like a lot, remember that it will be spread out over ten years, reducing annual spending by a relatively modest $600 billion, which is only about a third of the current annual budget deficit of $1.6 trillion. If Ryan’s proposal is radical, it is because it would still add trillions to the national debt over the next ten years, a spending projection that I would posit is radically unsustainable and dangerous to America’s economic future.
Rand Paul made this point on the floor of the U.S. Senate last month, saying:
“The president’s plan will add $13 trillion to the debt, and the Republicans say ‘oh, well ours is a lot better.’ Theirs will add $12 trillion to the debt.”
Paul reminded the chamber that it’s misleading to even refer to the proposed cuts by either party as spending cuts when he said:
“We’re not even really cutting spending. What we’re talking about is cutting the rate of increase of spending. The base line of spending is going to go up 7.3 % according to the CBO. We’re talking about reducing that increase to a 6.7% increase. We’re talking about cutting the rate of increase of government. The problem is it’s not enough.”
Senator Rand Paul says he has an independent solution that will actually put the government’s fiscal house in order. Unlike the Obama-Ryan plans, Rand Paul’s solution would propose cutting $4 trillion from the budget over the next five years, actually balancing the budget within that time and running a surplus by FY2016.
Unlike Paul Ryan’s plan, which he himself has acknowledged is politically volatile and will be “used against” Republicans because of the significant and confusing ways it changes America’s entitlement programs, Rand Paul touts his proposal for making broad cuts across the board to streamline government and make Washington more efficient. Instead of taking the axe to entitlements like Medicaid, which many Americans have come to depend on, Paul’s plan would eliminate four departments that his supporters are calling unconstitutional or unnecessary: the departments of Commerce, Education, Energy, and Housing and Urban Development.
In terms of their strictly fiscal effects, the two major parties’ budget proposals would still add trillions to the national debt over the next ten years. Whether you agree with it or not, the only true budget alternative on Capitol Hill would appear to be Senator Rand Paul’s five-year, balanced budget proposal.