Obama’s and Paul Ryan’s Conflicting Budget Visions
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The Fiscal Times
April 6, 2012

With his speech to news editors and executives this week, President Obama has made it clear that he plans to run a starkly ideological campaign, contrasting his vision for the future of the country with that of his Republican opponents. And, he plans to make the Republican budget, written by rising GOP star Rep. Paul Ryan of Wisconsin and embraced by presumptive Republican nominee Mitt Romney, exhibit one in that contrast. It would be worthwhile therefore to actually compare that budget with the one proposed by the president.

Deficits and Debt
The president’s budget proposal would reduce future deficits – at least until 2018 – but would never achieve balance. By 2018, the president projects deficits to fall to only $575 billion. After that, they begin rising again, reaching $704 billion by 2022. Overall, the president’s budget would add an additional $6.7 trillion to the national debt over the next 10 years.

Paul Ryan does better when it comes to deficit reduction, but only because the president has set such a low bar. Unlike the president, Ryan would eventually balance the budget – but not until 2040 or so. He does, however, generally run much lower annual deficits than the president would, and adds $3.3 trillion less to the national debt over the next 10 years.

Over the longer-term, the differences are much more pronounced. By 2050, for instance, Ryan would be running a surplus equal to as much as 3 percent of GDP. The president’s budget, in contrast, projects that we would still face budget deficits in excess of 6 percent of GDP.

Government Spending
Neither President Obama nor Paul Ryan actually cuts government spending. Rather, both are playing the time-honored game of calling a reduction in the rate of increase a “cut.” Thus, the president would increase federal spending from $3.8 trillion in 2013 to $5.82 trillion in 2022. That might not be as big an increase there might otherwise be, but in no way can it be called a cut. Meanwhile, Ryan, who is being accused of “thinly veiled Social Darwinism,” would actually increase spending from $3.53 trillion in 2013 to $4.88 trillion in 2022.

The president warns that Ryan’s spending “cuts” would “gut” the social safety net. And, it is true that Ryan’s budget knife falls more heavily on domestic discretionary spending than does the president’s – but only relatively. Over the next 10 years, Ryan would spend $352 billion less on those programs than would Obama, an average of just $35.2 billion per year in additional cuts. Given that domestic discretionary spending under the president’s budget will total more than $4 trillion over the next decade, Ryan’s cuts look less than draconian.

One area where the president appears to have the better argument is on defense spending. Ryan would undo the defense spending sequester agreed to under last year’s debt-ceiling compromise, and would spend $203 billion more over 10 years than was agreed to. Obama would cut defense by an additional $240 billion. Given our budget problems and the lack of a conventional military threat, Ryan’s plan to spare defense seems shortsighted.