Five Myths About the Romney/Ryan Budget

A number of stories around the Internet have described the Romney/Ryan campaign as the most dishonest ever.  Indeed, the approach seems to be to throw out as many lies as possible and leave it to the media and voters to figure out that they are being played for fools.  One of the areas in which shameless lies are being disseminated by Romney, Ryan and the GOP supporting PAC's is on what the GOP budget proposal would do.  They claim they would cut the budget deficit, but guess what, it's a lie.  A column in the Washington Post demolishes five of the myths/lies being put forth by the disingenuous GOP.  Here are excerpts:

Ryan, Mitt Romney’s running mate in the presidential election, has convinced many in Washington that his budget blueprint is a serious proposal for solving our long-term fiscal problems. Unfortunately, it’s not. Let’s dig into the asterisks of Ryan’s plan and unearth the fine print.

1. Paul Ryan’s budget would reduce the deficit.  The Ryan budget is a Potemkin village: It looks good from afar but is just a facade. The Congressional Budget Office has estimated that the plan would cut the public debt almost in half as a share of the economy by 2040. Sounds good, right?

Take a closer look, and you’ll see that the Ryan budget rests on three pillars that rely on capping and punting — limiting spending to a certain level but providing no specifics on how to achieve that number.

First, federal Medicaid spending is currently forecast to double by 2040, from 2 percent of gross domestic product to 4 percent. Under Ryan’s budget, it is projected to be cut in half over that period. This dramatic turnaround will supposedly occur by turning Medicaid over to the states through block grants. Anyone want to bet that will work?
 

Second, the Wisconsin congressman has specified $4.5 trillion in tax cuts, counting on massive rollbacks of tax breaks — such as the mortgage interest deduction — to pay for them. But he offers no details as to how to achieve such reductions, and most serious tax analysts don’t think such changes are politically feasible.

Third, Ryan assumes that nondefense discretionary spending, including education and basic government services, will fall from more than 12 percent of GDP last year to less than 5 percentby 2040. Again, he provides scant details on how to get there.

If you take out everything Ryan is assuming and look at his concrete proposals, his budget is not fiscally conservative. 

2. The Ryan budget would help the middle class.  Ryan says he would cut tax rates for all families, but that doesn’t mean the middle class would be any better off. Even after the Bush tax cuts, Ryan’s reductions would amount to about $1,000 a year for families with annual incomes between $50,000 and $75,000— compared with a cut of more than $250,000 a year for those with incomes above $1 million.

Furthermore, unlike the proposal from the nonpartisan Domenici-Rivlin deficit-reduction commission, the Ryan budget does not include any provisions to create jobs immediately. 

3. Ryan’s proposal would cut health-care spending by reforming Medicare.  Ryan says his plan would reduce health-care spending by increasing competition, but reality doesn’t remotely match his rhetoric. The CBO analyzed Ryan’s 2011 budget proposal, which would over time move Medicare entirely to private plans, and found that it would significantly increase total health-care spending (that is, spending by the government and Medicare beneficiaries).

4. Ryan’s plan would provide certainty to the markets and the economy.  Ryan likes to highlight the job-killing effects of uncertainty, but his budget would exacerbate it. Corporate executives hold back on investment and hiring when they don’t know what will happen next in terms of government policy. From that perspective, uncertainty is created when specifics are unknown — just like in Ryan’s plan.

5. If Romney wins, Ryan’s budget will be his fiscal blueprint.  .   .   .   .    if the Romney-Ryan ticket wins, their administration would probably have to choose one or two of the big three items: tax reform, Medicare changes or block-granting Medicaid. Among the three, I’d bet on Medicaid, given how difficult the other two goals are. The fact that the harm from block-granting would be concentrated on the poor, and that Congress would get to leave it to governors to impose the pain, sadly makes that change more politically viable than the others.

The author of the column is  Peter Orszag, director of the Office of Management and Budget from 2009 to 2010.