A national budget plan we should consider

OK, I'm an English major, not a math major. So I have to depend on math from others to figure out what's going on regarding budget plans in Washington. From what I've read in The Wall Street Journal, Paul Ryan's fiscal 2013 budget represents a good way forward even if the Democrats will toss it aside.

Far from retreating on Medicare, Ryan once more leads the charge by bringing back his "premium support" reform. The plan would offer seniors a fixed payment to buy insurance from a government-approved list of vendors. What's different from his proposal last year is that his formula for increasing the support payment over time would be more generous. And as part of his compromise with Oregon Democrat Ron Wyden, Mr. Ryan would allow seniors to stay on fee-for-service Medicare if they prefer. The policy bet is that seniors will migrate en masse to private plans over time given the right incentives. The compromise is an easier sell politically, though it means reform (and thus any savings) would be more gradual.

Of course, you can guess the response of the Obama team. The claim is that all of this will "destroy Medicare as we know it," but in fact it is the only reform that will prevent Medicare from destroying itself.

I really like Ryan's budget when it comes to taxes and spending. His proposal would reduce spending over a decade by some $5 trillion. On the other hand, Mr. Obama's would increase spending by $1.5 trillion above the current budget baseline. Spending as a share of GDP never falls below 23% under Mr. Obama but slows to 20% of GDP under Mr. Ryan.

Mr. Obama's budget contains $1.9 trillion in tax increases over the next decade and raises income, dividend and capital gains tax rates. The Ryan budget outlines an ambitious tax reform, collapsing today's six rates to two—25% and 10%—while retaining the 15% tax rates on capital gains and dividends and eliminating inefficient tax deductions and credits. He gets the corporate tax down to 25%, roughly the international average (right now we have the highest in the industrialized West), and below the 28% rate Mr. Obama suggests. The Ryan plan isn't a pure flat tax, but it takes the IRS code a giant stride in that direction and creates a tax system far more conducive to faster job creation and greater investment.

There are other items in the budget that appeal to me. Probably one of the best is a plan to block-grant Medicaid, food stamps and dozens of other welfare programs to states. Republican Governors have told the White House and Congress that this is a deal they would readily take: less money but more discretion and fewer federal rules. I'd much rather see entities closer to the people spend this money.

So, there are serious proposals out there for the public to consider. Or, we can listen to the soothing voice of the President, who told us some time ago that his Obamacare would save money and that the unemployment rate wouldn't go over 8 per cent.