Monday, January 31, 2011

Obama and Ryan-- a duel of plans

It’s going to get interesting in Washington if the contrasting messages last week play out. In his State of the Union speech, President Obama offered good days ahead if government continues its spending binge. I love language, so I was interested in the ways he used his words.

A year ago the euphemism was "stimulus." Now it is "investment." Doesn’t that sound better than “large-scale spending”? Where does he specifically want the money to go? For high-speed rail and "countless" green energy jobs. Seems like we added a rail system here in North County (the Sprinter)—that has NOT been a huge success.

Now, it’s true he called for some rational spending moves, but consider what they were. His single concrete proposal about cutting spending was a five-year freeze on nondefense discretionary outlays. This follows last year's call for a three-year freeze. But that was never enacted even though Democrats ran things and had the power to do this. The president's proposal would save $400 billion over 10 years. Nice, but a drop in the bucket—the discretionary outlays eat up about $600 billion of this year’s total budget of $3.5 trillion federal budget.

On the other hand, Representative Paul Ryan spoke after the President and laid out a very different view of government and solutions to our spending problems. Republicans have proposed cutting $100 billion from this year's budget. This would save $1.5 trillion over the next 10 years. A recent poll suggests this stronger response to cutting spending is what the voters would like to see. In this poll voters believe by 61% to 31% that the federal government should be "spending less to reduce [the] deficit" rather than "spending more to help [the] economy." Yet the president continues to believe that we can borrow and spend our way to prosperity. This makes him look disconnected from spending, deficits and the debt.

Ryan focused on the Declaration of Independence and the Constitution to defend limited government. "Our nation is approaching a tipping point," Mr. Ryan said. "We still have time" to make vital changes, the Budget Committee chairman said, "but not much time." He said the issue was not about just budgets and debt. Instead, it is about government's basic purposes and its role in our lives. If we don't act soon, the nature of American society could be very different than we know today.

Ryan and the Republicans know they must do more than snip around the edges of the huge federal budget to bring sanity back. More than $2 trillion of the budget consists of mandatory spending, and he knows that reforming these programs, especially Medicare, is the only path to fiscal sanity and economic growth. Otherwise, we will see a crushing debt and huge tax increases.

Here’s where it gets interesting. There will be a debate about the role and purpose of government. I like that. We need to go back to the principles that were foundational to the United States—limited government and more individual freedom. The bottom line is pretty simple. Americans need to know that 142 million of us were employed the day before Mr. Obama took office and 139 million are today. The total debt was $10.6 trillion before his inaugural and $14.2 trillion today. We must return to more conservative beliefs about government and spending. Let’s see how the argument plays out in Washington.

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