When a democratic nation proposes its budget it is generally normal for the opposition to propose an alternative one and this year in the US is no exception. That is no exception in that the Republicans have proposed one, but on the other hand the differences between the two are exceptionally stark this year. Paul D Ryan, the ranking Republican on the House Budget Committee, has the details in the Wall St. Journal.
The GOP has in the past had a habit of trumpeting its principle of “fiscal conservatism,” in the bad times, yet seems to spend like drunken sailors when in power. So will it be any different this time? There is little doubt they would be an improvement on the current administration, which is spending amounts that are difficult to even comprehend, but that is not really good enough.
There are some promising signs in the willingness of some of the Governors to reject sections of the stimulus that will establish new or increased programs that will require large state contributions in the future. This takes considerable courage in the current circumstances, as most of the public will have some difficulty in understanding this. Acceptance though is bound to create the need for substantial tax hikes later.
(From WSJ)… America is placed in a special moment in our history -- brought about by the deep recession, Mr. Obama's ambitious agenda, and the pending fiscal tidal-wave of red ink brought forward by the looming insolvency of our entitlement programs. If this agenda comes to pass, it will mark this period in history as the moment America turned European.Some proposals:
House Republicans will offer an alternative plan. As the opposition party, we believe this moment must be met by offering the American people a different way forward -- one based on our belief that America is an exceptional nation, and we want to keep it that way. …. Rather than attempting to equalize the results of peoples' lives and micromanaging their affairs, we seek to preserve our system of protecting our natural rights and equalizing opportunity for all. …
Instead of doubling the debt in five years, and tripling it in 10, the Republican budget curbs the explosion in spending called for by the president and his party. Our plan halts the borrow-and-spend philosophy that brought about today's economic problems, and puts a stop to heaping ever-growing debt on future generations -- and it does so by controlling spending, not by raising taxes. The greatest difference lies in the size of government our budgets achieve over time (see nearby chart).
Deficits/Debt. Lower deficits than the Democratic plan in every year, and by 2019 yields half the deficit proposed by the president. By doing so, we control government debt: Under our plan, debt held by the public is $3.6 trillion less during the budget period.
- Spending. Give priority to national defense and veterans' health care. Freeze all other discretionary spending for five years, allowing it to grow modestly after that. We also place all spending under a statutory spending cap backed up by tough budget enforcement.
- Energy. Our budget lays a firm foundation to position the U.S. to meet three important strategic energy goals: reducing U.S. dependence on foreign oil, deploying more clean and renewable energy sources free of greenhouse gas, and supporting economic growth. We do these things by rejecting the president's cap-and-trade scheme, by opening exploration on our nation's oil and gas fields, and by investing the proceeds in a new clean energy trust fund, infrastructure and further deficit reduction.
- Tax Reform. Our budget does not raise taxes, and makes permanent the 2001 and 2003 tax laws. In fact, we cut taxes and reform the tax system. Individuals can choose to pay their federal taxes under the existing code, or move to a highly simplified system that fits on a post card, with few deductions and two rates. Specifically, couples pay 10% on their first $100,000 in income (singles on $50,000) and 25% above that. Capital gains and dividends are taxed at 15%, and the death tax is repealed. …
On the business side, the budget permanently cuts the uncompetitive corporate income tax rate -- currently the second highest in the industrialized world -- to 25%. This puts American companies in a better position to lead in the global economy, promotes jobs here at home, and strengthens worker paychecks. …This sounds reasonable as far as it goes. I would like to think they would pursue this however they will not have he chance until 2011, and then only if they can get their act together to the degree that the public will vote for them. Personally I feel that too many of them are sitting back, smugly thinking Obama will be so bad that the public will have to reject the Democrats.
Even if this were to happen, without serious reform the party would not last long in power. The problem with parties voted in because a government was voted out is that because they are in, they think they ‘got it right’ when in reality they were only the least worst option.