Obama versus Ryan….coming soon

Editor’s Note: The following excellent article was written by Debra J. Saunders and was first published at townhall.com on 4/10/2011.

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President Obama has dedicated his time in office to soaking up applause and shifting blame. Last year, when Democrats owned the White House, the House and the Senate, Congress didn’t even bother passing a budget. Obama didn’t seem to mind. But when Republicans put together a stopgap measure to fund the military and prevent a government shutdown, Obama promised to veto it. Obama called the measure “a distraction from the real work that would bring us closer to a reasonable compromise for funding the remainder of fiscal year 2011.”

There must have been a lot of distractions last year.

Obama has failed to propose a serious plan to reform entitlement spending and take control of runaway federal spending. Last week, however, House Budget Chairman Paul Ryan, R-Wis., stepped into the void by releasing a budget plan that would trim $6.2 trillion from Obama’s 10-year spending plan. Dubbed “The Path to Prosperity,” the GOP plan already has passed through Ryan’s committee.

Ryan rightly argues that the sooner Washington addresses annual deficit spending and unfunded liabilities in Social Security and Medicare, the less harsh the cuts need be. But also, the GOP wants Washington to focus on “core” responsibilities. As the plan notes, “When government takes on too many tasks, it usually doesn’t do any of them very well.”

Some liberals have saluted the GOP for having done more than Obama on thorny fiscal issues, although elected Democrats have issued their usual partisan slam. House Minority Leader Nancy Pelosi, D-Calif., attacked Republicans for hurting children and seniors while helping the rich and oil companies.

Foremost, the Republicans want to eliminate Obamacare — and not just for the 1,040 organizations already granted waivers by the administration. As Republicans see it, government subsidies have fueled the steep rise in health care costs, adding to the deficit and higher premiums in the private sector. By expanding both who gets subsidized health care and what benefits private insurers must provide, Obamacare can only do more damage.

Thus, Ryan’s blueprint would turn Medicaid into a block grant program to states. The shortest way to cap the steep rising in Medicaid costs — 7.3 percent per year over the past decade — is to cap benefits while giving the states that administer the program more flexibility to control costs. Ryan argues that this approach should strengthen the social safety net by keeping it affordable.

The Ryan plan would curb Medicare costs two ways. The GOP would cap Medicare, which insures the elderly, as it would cap Medicaid, which insures the poor. Beginning in 2022, enrollees would receive subsidies to purchase private health insurance policies. Republicans believe seniors will purchase plans that encourage personal economies.

In the GOP’s gutsiest move, wealthy seniors would receive a reduced subsidy. That’s right: The Republicans have proposed some means-testing in Medicare.

“It was a good day for Democrats,” J.B. Poersch, who is running a so-called independent expenditure campaign for Democrats, crowed to Politico.com. And: “This is a news flash for seniors. It’s probably an overreach, and they are likely to pay politically.”

Ryan does call for a reduction in the highest tax rate for families and corporations, but the GOP plan also calls for the elimination of the sort of loopholes that have enabled General Electric not to pay taxes last year. If done right — a big if — this approach could force some corporations to pay more taxes than they currently pay.

Critics are right to point out that the GOP plan fails to address the $14 trillion federal debt sufficiently because it includes no net tax increase and decreases taxes for the rich. The pure conservative response would be to argue that lower taxes create jobs and revenue. Some folks will bark and moan about how unsustainable the federal debt is — right up until the moment they’re expected to help pay for it.

Last month, Pimco’s $236.9 billion Total Return Fund, the world’s largest mutual fund, dumped its U.S. Treasury bonds. The fund’s manager, Bill Gross, told The Washington Post’s Jennifer Rubin that America has a year or two to change course or face a debt crisis on the magnitude of Greece’s.

Ryan has presented a cohesive, respectable reform agenda that strives to fix Washington’s most dire problems. Obama, Pelosi and Senate Majority Leader Reid can’t say as much. They couldn’t even pass a budget last year.