As the United States is about to hit a debt of $14.3 trillion, Americans continue to banter about how to cut the budget. U.S. Sen. Paul Ryan, R-Wi., has proposed a new budget plan titled the “Plan to Prosperity.” At the rate the U.S. is borrowing money, it is predicted the economy will crash in 2037. By that point, there will be no recovery.
There is an obvious spending problem. The U.S. does not have a problem with people paying small taxes. However, Washington is wasting money. We need to reform several programs, and Paul Ryan is about the only one who is stepping up to par.
Overall, Ryan’s plan would save $750 billion over a 10-year span. According to an analysis the Heritage Foundation conducted, he said, the new plan “kicks out about a million new jobs next year alone, brings unemployment rate down to 4 percent by 2015, and produces about 2.5 million new jobs by the end of the decade, a thousand dollars in extra family income… a year, and $1.1 trillion in higher wages, and $1.5 trillion in faster economic growth.” Now, let me break it down.
Ryan wants to reform the tax code, making it more internationally competitive. This would raise the revenue of the U.S. spending cuts, which will lead to economic growth. He has discussed putting a cap on Medicaid, which would give a fixed amount to insure the poor without fluctuating prices. Medicare must be revamped as well. According to Tom Price R-Ga., “No changes will affect anyone in retirement.”
Ryan also wants to cut the workforce by 10 percent, which would increase efficiency in the government with a leaner workforce.
“We’re talking about cutting discretionary spending on government agencies below 2008 levels,” Ryan said while talking with Glenn Beck. “We’re talking about entitlement reform; block granting Medicaid to the states, and doing welfare reform 2.0 which is food stamps, housing programs.”
Ryan suggests the U.S. should give the wealthiest Americans a tax break. He wants to cut their taxes from 35 percent to 25 percent. This is where the two parties start to disagree. Obama and Ryan are using different baselines to determine where to cut these taxes. Ryan is using the Bush tax cuts, but these will expire by 2012. Obama is referring to the post-2012 baseline.
By cutting loopholes and deductions that benefit the rich, he is not giving them a tax break in the grand scheme of things. Even if we accept Ryan’s baseline and assume he will match every dollar in lost revenue from the rate cuts with another dollar in reduced deductions, it has been predicted that he will end up cutting taxes for the rich relative even to the post-Bush tax code. Ryan implies that his plan would leave the rich paying the same tax rates as they are because he is “getting rid of loopholes and deductions, which by the way are enjoyed by the top (tax) rate filers, the people in the top two brackets.” However, no details have been published.
Obama is in complete disagreement with the proposed plan. He actually hates that someone is being responsible.
If we do not act in some drastic way fast, our generation will be crushed with the burden of high taxes. Republican or Democrat, the U.S. budget needs serious revamping, and Ryan’s “Plan to Prosperity” is what we have to work with, so let us make the best of it.
