Rep. Paul Ryan On Obama's Budget Proposal
MELISSA BLOCK, Host:
This is ALL THINGS CONSIDERED from NPR News. I'm Melissa Block.
MICHELE NORRIS, Host:
And I'm Michele Norris.
Tough choices and sacrifices, that's how President Obama described his budget for fiscal year 2012 released today. The president promised it would reduce the deficit by more than $1 trillion over the next decade through spending cuts and tax increases. He also called for increased spending on such things as infrastructure and education. He called this budget a down payment on future fixes to the big entitlement programs, Social Security, Medicare and Medicaid.
BLOCK: I'm joined now by one of the president's budget critics, Republican Congressman Paul Ryan of Wisconsin who's chairman of the House Budget Committee.
Congressman Ryan, do you see anything in the president's budget that you do like?
PAUL RYAN: You know, that's the thing is this budget is so out of control on spending and taxing that I'm really disappointed in it. I was really hoping that the president would show some reforms that can get our debt under control. Instead, what we have is 1.6 trillion in new tax increases, 8.7 trillion in new spending. He's going to be adding 13 trillion to the debt over the course of his budget. And that to me is very dangerous, because this is accelerating our trajectory toward a debt crisis versus taking on the issue.
The president even appointed a fiscal commission last year to deal with these issues, yet he rejected any of the major reforms recommended in the fiscal commission.
BLOCK: Well, let me ask you about a few of the things you mentioned. The White House is talking about more than $1 trillion in deficit reduction over 10 years, three-quarters of that from spending cuts, the rest from tax increases or the elimination of tax rates. And they say that will cut the deficit in half by the end of President Obama's first term. Not good enough?
RYAN: So if you take a look at an actual measurement of those numbers, it's about $8 in tax increases for $1 of spending cuts. The savings that they're talking about, they suggest that they're going to be in Afghanistan and Iraq at current levels for 10 years and then they have a withdrawal that saves $1.1 trillion. So a lot of the savings they're claiming, I think, are phantom savings. And a lot of the taxes they're increasing, they're not necessarily counting.
The president proposes to save 400 billion over the next 10 years by freezing domestic discretionary spending at these elevated levels. That's less than 1 percent of the budget over the next 10 years. So this is extremely small on spending reductions, high on tax increases and excessive on borrowing.
BLOCK: I've been trying to figure out where this $8 in tax increase for every $1 in spending cuts comes from, because I wonder if you're including in that projected revenues. In other words, there may be more taxes coming in because people think (unintelligible) rising and they're paying more capital gains. I don't see where you're getting the 8-1 ratio that you talk about.
RYAN: So the president is not necessarily counting in his tax increase calculation the tax increases that occur in two years on higher earners, on small businesses, on capital gains, on dividends, on death. So they're not counting some of the tax increases that their budget requires. So by discounting a lot of tax increases, they're making their number look lower.
They're also counting some spending reductions, which we just don't think are real spending reductions. They're also counting interest savings on the war, which, as I mentioned, it's one of the biggest gimmicks that are in this.
So I think they're overcounting their spending savings and they're undercounting their tax increases.
BLOCK: And the White House would quibble with you on all of those numbers.
RYAN: Sure. Of course.
BLOCK: I wonder, Congressman Ryan, if you see value in increased spending that the president is calling for on education and infrastructure and technology. The argument there would be, from the White House, this pays off in the future with job creation. And it's shortsighted not to fund those things adequately now.
RYAN: So we hear this every year, and both parties have done this that says we need to spend more money on higher priority things. The problem is no spending prioritization ever occurs. They're just throwing more money on top. And they're also increasing spending in these areas after having increased it by double and triple-digit rates over the last two years. So these are spending increases on top of what were massive spending increases over the last two years.
I would simply conclude with this: If borrowing and spending more money today was the secret to economic growth and prosperity, then we wouldn't have this high unemployment we have right now.
BLOCK: Congressman Ryan, when the Republican-led House Budget Committee comes up with its own budget proposal, will you be taking on entitlement spending like Medicare and Medicaid?
RYAN: We do plan on taking on the biggest drivers of our debt. We do think it's important that we actually put a plan out there that gets this debt under control and heads in the right direction. And so we feel obligated that because the president, in our opinion, has advocated leadership on this that he has punted on this issue, we feel obligated to give the country a different choice, to give the country a different direction and to chart a new course, and that's what we will be doing with our spring budget.
It's too premature to say exactly what our budget is going to look like because we haven't written it yet. But we do think we owe the country a choice of a different future going forward.
BLOCK: Congressman Ryan, thanks for being with us.
RYAN: You bet. My pleasure.
BLOCK: That's Republican Congressman Paul Ryan of Wisconsin. He's the chairman of the House Budget Committee.
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