Zero Hedge includes a helpful link to the ten-year report issued by the CBO back in early 2001. Eleven years ago, the CBO predicted that the US would have an improving debt burden with consistent surpluses and relatively solid economic growth. The CBO got its projection on mandatory spending relatively right: it estimated that mandatory spending would be $1.9 trillion in 2011, when it ended up being $2 trillion.
However, this report was before the Bush tax-cuts passed, before 9/11 (and the resulting conflicts), and before a decade of economic disappointment. The CBO in 2001 projected an average real GDP growth of 3.1% a year during the decade after 2001; GDP growth did not even come close to that.
Showing posts with label budget. Show all posts
Showing posts with label budget. Show all posts
Thursday, February 2, 2012
Wednesday, May 25, 2011
Circular Firing Squad
(NB: This is not addressed to any specific individuals. I also believe that supporters of the Ryan budget have every right to make their case as strongly as they can. This more addresses a particular mood.)
Maybe it's me, but some of the intra-right debate about the Ryan budget is sounding increasingly like the debate over Christine O'Donnell in 2010: focusing more on sending a message than on advancing conservative goals.
A couple preliminary facts: the Ryan budget has NO chance of passing until 2013, and, at the moment, it is not very popular.
Knowing both of those facts, the House Republican caucus decided to vote overwhelmingly in favor of this measure. Fair enough. Leadership had its reasons. Many House members walked the plank on this vote, and that gamble may prove to be helpful for conservatives shaping the debate in the future. That die is already cast.
House Republicans and the Republican establishment may feel the need to circle the wagons to defend that vote. That is also fair or at least understandable.
But what is dangerous is a crusade against any Republican who dares to criticize the Ryan budget. That budget is not perfect, to say the least. The Republican and conservative causes are not strengthened by an attempt to enforce a petty ideological orthodoxy (the Bush years suffered from this tendency toward uniformity).
Republicans derided Democrats for forcing through Obamacare, an ambitious, radical measure with weak popular support. Democrats and progressives twisted countless arms to impose their vision on an unenthusiastic America. The backlash from this measure helped sink Democrats across the country. Republicans should not fall into the same trap, especially for a measure that will never become law until, potentially, after the next election.
The number one electoral goal for Republicans at the moment should be putting forward the most credible, competent, and electable conservative candidates possible---not (forgive me, Mr. Chairman) fighting and dying on the hill of the Ryan "roadmap." Passing the Ryan budget may be part of the victory for free-market conservatives, but we should not fetishize a single piece of legislation to the detriment of all else.
For those who believe that there is an entitlements crisis---no, a national emergency---that needs to be stopped RIGHT NOW!!!!---forget about the Ryan budget. It would add trillions of dollars to the debt* in the next few years. Its major reforms for Medicare would not be substantially felt for well over a decade; Medicare as we know it would continue for everyone who is over 55 by the time it passes, and, for a while after that, the majority of people on Medicare would have the old-school variant.
If we are at fiscal/entitlements Armageddon, the Ryan budget is a failure. If we are not at that point, this budget may be more helpful. Under either circumstance, there is no need for such strident denunciations of those who would dare to criticize it.
Scott Brown voting in favor of the Ryan budget on the Senate floor in 2011 will do absolutely nothing to advance the cause of fiscal conservatism; indeed, voting for it may hurt that cause, since such a vote could very well hurt Brown's chances of reelection. Though Newt Gingrich may have used inopportune language in criticizing Ryan's "roadmap," he is well within his rights to suggest the limitations of this plan.
Any Republican presidential candidate (or any Republican candidate at all) who wishes to distance himself or herself from the Ryan budget and propose entitlement reforms of his or her own has every right to do so. And this critique should not be necessarily confused with a forfeiture of all conservative principles. If the Ryan budget is so important for a GOP presidential candidate, then Ryan himself should run for the White House.
Sending a message to show that you're "serious" about fiscal reform is the mere hysteria of Washington kabuki. Reducing unhelpful spending and cutting the deficit and reforming derelict programs---those are the things that really advance fiscal conservatism.
Oh, and back to Christine O'Donnell: she lost big, and Senator Chris Coons is highly unlikely ever to vote for anything closely resembling the Ryan budget. The emphasis should be less on attacking Republicans for daring to dissent and more on persuading those dissenters and the public at large why the Ryan budget is a good idea (as Ryan aims to do here). Turning one's back on RINO traitors may be a cathartic move, but it does little to advance real conservatism. When conservatism becomes the politics of rage and exclusion, it loses; when it becomes the politics of hope and engagement, it wins.
*CORRECTION: An earlier version of this post had "deficit" instead.
(Crossposted at FrumForum)
Maybe it's me, but some of the intra-right debate about the Ryan budget is sounding increasingly like the debate over Christine O'Donnell in 2010: focusing more on sending a message than on advancing conservative goals.
A couple preliminary facts: the Ryan budget has NO chance of passing until 2013, and, at the moment, it is not very popular.
Knowing both of those facts, the House Republican caucus decided to vote overwhelmingly in favor of this measure. Fair enough. Leadership had its reasons. Many House members walked the plank on this vote, and that gamble may prove to be helpful for conservatives shaping the debate in the future. That die is already cast.
House Republicans and the Republican establishment may feel the need to circle the wagons to defend that vote. That is also fair or at least understandable.
But what is dangerous is a crusade against any Republican who dares to criticize the Ryan budget. That budget is not perfect, to say the least. The Republican and conservative causes are not strengthened by an attempt to enforce a petty ideological orthodoxy (the Bush years suffered from this tendency toward uniformity).
Republicans derided Democrats for forcing through Obamacare, an ambitious, radical measure with weak popular support. Democrats and progressives twisted countless arms to impose their vision on an unenthusiastic America. The backlash from this measure helped sink Democrats across the country. Republicans should not fall into the same trap, especially for a measure that will never become law until, potentially, after the next election.
The number one electoral goal for Republicans at the moment should be putting forward the most credible, competent, and electable conservative candidates possible---not (forgive me, Mr. Chairman) fighting and dying on the hill of the Ryan "roadmap." Passing the Ryan budget may be part of the victory for free-market conservatives, but we should not fetishize a single piece of legislation to the detriment of all else.
For those who believe that there is an entitlements crisis---no, a national emergency---that needs to be stopped RIGHT NOW!!!!---forget about the Ryan budget. It would add trillions of dollars to the debt* in the next few years. Its major reforms for Medicare would not be substantially felt for well over a decade; Medicare as we know it would continue for everyone who is over 55 by the time it passes, and, for a while after that, the majority of people on Medicare would have the old-school variant.
If we are at fiscal/entitlements Armageddon, the Ryan budget is a failure. If we are not at that point, this budget may be more helpful. Under either circumstance, there is no need for such strident denunciations of those who would dare to criticize it.
Scott Brown voting in favor of the Ryan budget on the Senate floor in 2011 will do absolutely nothing to advance the cause of fiscal conservatism; indeed, voting for it may hurt that cause, since such a vote could very well hurt Brown's chances of reelection. Though Newt Gingrich may have used inopportune language in criticizing Ryan's "roadmap," he is well within his rights to suggest the limitations of this plan.
Any Republican presidential candidate (or any Republican candidate at all) who wishes to distance himself or herself from the Ryan budget and propose entitlement reforms of his or her own has every right to do so. And this critique should not be necessarily confused with a forfeiture of all conservative principles. If the Ryan budget is so important for a GOP presidential candidate, then Ryan himself should run for the White House.
Sending a message to show that you're "serious" about fiscal reform is the mere hysteria of Washington kabuki. Reducing unhelpful spending and cutting the deficit and reforming derelict programs---those are the things that really advance fiscal conservatism.
Oh, and back to Christine O'Donnell: she lost big, and Senator Chris Coons is highly unlikely ever to vote for anything closely resembling the Ryan budget. The emphasis should be less on attacking Republicans for daring to dissent and more on persuading those dissenters and the public at large why the Ryan budget is a good idea (as Ryan aims to do here). Turning one's back on RINO traitors may be a cathartic move, but it does little to advance real conservatism. When conservatism becomes the politics of rage and exclusion, it loses; when it becomes the politics of hope and engagement, it wins.
*CORRECTION: An earlier version of this post had "deficit" instead.
(Crossposted at FrumForum)
Saturday, February 19, 2011
The Day After Tomorrow
The Wisconsin budget battle is really not about today or tomorrow but the day after tomorrow; it is far less about helping the state make up for a projected $137 million budget deficit than it is about changing the role that public unions play.
This budget shortfall was not unexpected. Indeed, Wisconsin's Republican governor, Scott Walker, has pushed for policies that, in the short term at least, have exacerbated the state's deficit. Walker and the Republican-controlled Wisconsin state legislature passed in January $117 million (over the next two and a half years) in tax breaks for businesses and health savings accounts. Part of the budge deficit is really the story of transferring some state subsidies from public employees to private businesses. That transference may be good or it may be bad, but it is a key detail of this battle.
Moreover, it seems as though union leaders are open to accepting Walker's demands that members contribute 5.8% of their incomes towards their public pensions and and at least 12.6% of their incomes towards health-care plans. This increased contribution would be a de facto pay cut for union members (for example, University of Wisconsin union members could see a 8-15% pay cut). Union leaders have suggested that they would be willing to make these concessions. If this battle were just about the upcoming deficit, it would be over.
But it isn't. There's one concession that unions are not willing to make: surrender their collective bargaining power. Walker's proposal would deny most unions the ability to collectively bargain for anything more than salary (and even that would be limited); Walker's proposal excepts from these collective bargaining rules his political allies in the police and firefighters unions. His proposal also puts up additional hurdles for unions to maintain their union status. These measures set the stage for a long-term structural change.
Consider education. The elimination of union collective bargaining could open the door for destroying tenure, limitations on teaching load, pay for extracurricular activities, limits on working hours, and state funding for continuing the education of teachers. The end of collective bargaining could also help undermine public employee pension funds.
Scott Walker has borrowed a page from Barack Obama and Rahm Emanuel and is not letting a crisis go to waste. As with Obama, the most contentious part of Walker's proposals (collective bargaining) serves a far more structural purpose than a short-term one.
(A couple other structural notes: At a time when private sector employment is stagnating and wages shrinking, public workers are not going to be able to defend ever-increasing wages and benefits for themselves. Also, many public unions made the choice to full-throatedly back Democrats, which has limited their leverage over Republicans. With Republicans newly empowered in state legislatures across the country, the hands of public unions are significantly weakened. These unions could be paying a price for their partisanship.)
This budget shortfall was not unexpected. Indeed, Wisconsin's Republican governor, Scott Walker, has pushed for policies that, in the short term at least, have exacerbated the state's deficit. Walker and the Republican-controlled Wisconsin state legislature passed in January $117 million (over the next two and a half years) in tax breaks for businesses and health savings accounts. Part of the budge deficit is really the story of transferring some state subsidies from public employees to private businesses. That transference may be good or it may be bad, but it is a key detail of this battle.
Moreover, it seems as though union leaders are open to accepting Walker's demands that members contribute 5.8% of their incomes towards their public pensions and and at least 12.6% of their incomes towards health-care plans. This increased contribution would be a de facto pay cut for union members (for example, University of Wisconsin union members could see a 8-15% pay cut). Union leaders have suggested that they would be willing to make these concessions. If this battle were just about the upcoming deficit, it would be over.
But it isn't. There's one concession that unions are not willing to make: surrender their collective bargaining power. Walker's proposal would deny most unions the ability to collectively bargain for anything more than salary (and even that would be limited); Walker's proposal excepts from these collective bargaining rules his political allies in the police and firefighters unions. His proposal also puts up additional hurdles for unions to maintain their union status. These measures set the stage for a long-term structural change.
Consider education. The elimination of union collective bargaining could open the door for destroying tenure, limitations on teaching load, pay for extracurricular activities, limits on working hours, and state funding for continuing the education of teachers. The end of collective bargaining could also help undermine public employee pension funds.
Scott Walker has borrowed a page from Barack Obama and Rahm Emanuel and is not letting a crisis go to waste. As with Obama, the most contentious part of Walker's proposals (collective bargaining) serves a far more structural purpose than a short-term one.
(A couple other structural notes: At a time when private sector employment is stagnating and wages shrinking, public workers are not going to be able to defend ever-increasing wages and benefits for themselves. Also, many public unions made the choice to full-throatedly back Democrats, which has limited their leverage over Republicans. With Republicans newly empowered in state legislatures across the country, the hands of public unions are significantly weakened. These unions could be paying a price for their partisanship.)
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