Selling snake oil on the campaign trail
Five myths about Paul Ryan’s budget
By Peter Orszag, WashPost, Thursday, August 23, 1:25 PM
Peter Orszag was director of the Office of Management and Budget from 2009 to 2010.
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? If states can’t find huge efficiencies in Medicaid, expect them to pressure the federal government to avoid the fanciful reductions in federal support assumed in the Ryan budget.
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.
(More here.)
Peter Orszag was director of the Office of Management and Budget from 2009 to 2010.
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? If states can’t find huge efficiencies in Medicaid, expect them to pressure the federal government to avoid the fanciful reductions in federal support assumed in the Ryan budget.
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.
(More here.)
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1 Comments:
Orszag may or may not have valid points. He could improve his credibility if he would at least mention the 'success' of the Obama budget.
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