Paul Broun, a Republican congressman from Georgia who’s going to run for US Senate, doesn’t much like Paul Ryan’s new budget. His big criticism: Ryan uses a scalpel instead of chainsaw. As Broun wrote in a New York Times op-ed:
Supporters of the “Path to Prosperity,” including many of my fellow Republicans, say that we have to stop spending money we don’t have, an idea I promote every chance I get. But under the proposal by Mr. Ryan of Wisconsin, the chairman of the House Budget Committee, the federal government would continue to spend more than it will this year.
Spending would grow by an average of 3.4 percent annually, only slightly less than the rate under President Obama’s plan, which is 5 percent a year. After 10 years — Mr. Ryan’s target for eliminating the deficit — the “Path to Prosperity” will have spent $41 trillion, when the president’s plan would allow spending of $46 trillion. My party’s de facto position has become “we’re increasing spending, but not as much as the other guy.” That’s not good enough. Just reducing growth in spending does almost nothing.
Broun’s analysis is misleading. Reducing the growth in spending can actually accomplish quite a bit, as Ryan’s budget clearly shows. While I have many problems with the internals of the Ryan budget (including the balanced budget goal), his macro targets are spot on.
While annual spending would increase to $4.9 trillion in 2023 from $3.5 trillion in 2014, spending as a share output would fall to 19.1% of GDP from 21.2%.
And publicly-held debt as a share of GDP would fall to 54.8% from 77.2%. Indeed, the Ryan budget puts the debt on a realistic trajectory back to the post-WWII average of 37% over the next two decades. Faster economic growth would, of course, accelerate the pace. On that score, Ryan uses conservative CBO assumptions.
Should we reduce debt even faster? You bet — if you can do it while also a) keeping the tax burden low, b) not eviscerating defense, c) not underfunding important functions of government such as basic research and providing a basic social safety net. Also, as economists John Taylor and John Cogan wrote in the WSJ earlier this week: “The new budget’s reduction in the growth of government spending is gradual. That allows private businesses to adjust efficiently without disruptions.”
Ryan has it about right.