The latest Bloomberg Businessweek features a short article emphasizing the vast differences between Republican and Democratic approaches to the federal budget.
On March 12, in what has become a rite of spring, House Budget Committee Chairman Paul Ryan of Wisconsin unveiled his latest Republican budget. It barely differs from his earlier ones. Ryan wants to cut spending by $4.6 trillion over the next 10 years, enact deep cuts to Medicare and Medicaid, repeal the Affordable Care Act, and drop income tax rates to 10 percent and 25 percent. The budget’s two novelties are: It balances in 10 years instead of 25, and it does so by maintaining Obamacare’s $716 billion in cuts to Medicare providers and the $624 billion in tax increases from the Jan. 2 fiscal cliff deal—both of which most Republicans vehemently opposed.
The next afternoon, Senate Budget Committee Chairwoman Patty Murray of Washington rolled out the Democrats’ alternative. It includes only $975 billion in spending cuts and an additional $975 billion in new tax revenue gained through closing loopholes. Her plan protects Medicare and expands Medicaid to cover more low-income Americans. “It’s a very distinct contrast,” says Idaho Senator Mike Crapo, a Republican on the Senate Budget Committee. “It’s discouraging that we are continuing the age-old debate over whether to tax and spend or whether to put into place the kinds of spending restraints that will get us on a pathway to a balanced budget and the kind of tax reforms that will create a pro-growth economy.”
It seems members of one party understand that the federal government cannot continue to spend at a rate equal to 23 percent of the size of the entire economy when tax revenues have topped 20 percent of the economy just once since 1945, even when top marginal income tax rates topped 90 percent. The math doesn’t work. The problem is government overspending.
