House Speaker John Boehner thinks the country would be shocked to learn that balancing the budget could take as long as 10 years.
It should shock his fellow Republicans. The budget passed by the House GOP majority last year needed three decades to slowly transform deficits to a surplus. But the irony was lost on Boehner as he graced the House floor Wednesday just before the important vote on the debt ceiling.
“You know, most Americans would look up and go, ‘Wait a minute, why do they need 10 years to balance the budget?’” the Ohio congressman said. “But we know with baby boomers retiring and the fact that it wasn’t prepared for – it’s going to take a little more time. But my goodness, we ought to be able to balance the budget in the next 10 years.”
The new and ambitious time frame was the result of an internal arrangement among GOP lawmakers. Conservative congressmen insisted on the 10-year horizon as part of a package that would temporarily suspend the debt ceiling through May 18. The House passed the suspension – giving congressional leaders and President Obama more time to sort through their budgetary differences – by a resounding 285 to 144 on Wednesday.
But delivering on the next part of the agreement – a balanced budget after 2023 – looks tricky. For starters, Republicans ruled out additional tax increases after the fiscal cliff deal at the start of the year with Obama. Having accepted a tax hike on families with incomes above $450,000, they’re determined to achieve any further deficit reduction solely by slashing expenditures.
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There will always be plenty of gristle to trim from a multi-trillion-dollar budget, but because much of the discretionary spending is tapped out, the amount of cuts required over 10 years would chop into the very marrow of Medicare, Medicaid and the military.
The last time the House Republicans passed a budget, it was deemed so draconian that Republican presidential nominee Mitt Romney gave it an exceedingly wide berth throughout the 2012 election campaign. That fiscal year 2012 budget blueprint, drafted by Romney’s running mate, Paul Ryan, would slice more than $5 trillion from projected government spending in the coming decade.
But Ryan’s budget, dubbed “The Path to Prosperity,” would be a mere down payment on the cuts that would be necessary to actually balance the budget within 10 years, according to some experts.
“It’s mathematically impossible and an absurd objective if you’re trying to get there entirely with spending cuts from the starting point of our deeply depressed U.S. economy,” said Andrew Fieldhouse, a former researcher for the House Budget Committee who now works as an analyst at the progressive Economic Policy Institute.
Without credible numbers, all Republicans have is the talking point that they will balance the budget – whereas the policies floated by Obama would still generate deficits and merely stabilize the national debt as a percentage of gross domestic product.
But even with that messaging advantage, Democrats could highlight the depths of the potential cuts. Congress would need to hack off about 20 percent of federal spending a decade from now, based on the alternative fiscal scenario projections provided last August by the Congressional Budget Office.
The CBO will update its baseline estimates in the next few weeks, yet back-of-the-envelope calculations suggest that accounting gimmicks won’t be enough to avoid politically hazardous choices.
To produce a surplus in 10 years, House Republicans would likely need to swing an axe at Social Security and Medicare, reducing benefits for the millions already supported by the programs. The House Republicans’ past attempt to balance the budget in 30 years hinged on transforming Medicare into a voucher-style program – which they called “premium support” – for the next generation of retirees.
Ryan, the House Budget Committee chairman and the architect of the 30-year plan, claimed at a Wednesday breakfast with reporters sponsored by The Wall Street Journal that today’s senior citizens would still be protected from any reductions.
“None of the things we’ve proposed affect current retirees,” said the Wisconsin congressman and last year’s Republican vice presidential nominee. “We’ve always believed the best way …would phase in reforms so that people who have organized their lives around these promises get the promises kept [that were] made to them.”
Ryan indicated that Republicans had not yet identified what cuts they would make instead, so party leaders basically announced a destination before they drew a roadmap. “We’re going to have to have a conversation on the Budget Committee and in our caucus about other things that will get us there, and that’s what we intend to do,” he said.
The congressman said the budget picture would improve with reforms to immigration, energy policy and taxes that would unlock more economic growth. However, the type of budgetary scoring based on these types of changes has proven in the past to be negligible or inaccurate.
Boehner was correct when he said that retiring baby boomers present a challenge – but this point is as much political as it is fiscal. When budget experts examined the 10-year time frame, their basic conclusion was that the GOP will either need to break its pledge against taxes or its promises to seniors. The combination of reckless spending in the past and the graying population forces a tortuous choice.
“The math is complex and not so forgiving,” said Joe Minarik, senior vice president and director of research at the Committee for Economic Development. “You do not necessarily want to go to the 85-year-old widow in the walk-up cold water flat and tell her, ‘We’re cutting your Social Security payment. If you can’t get by, go out and get a job.’”