Budget Proposals Have Different Government Vision

Steve Inskeep talks to David Wessel, economics editor of The Wall Street Journal, about how the Republican budget by Wisconsin Representative Paul Ryan compares with President Obama's proposal. The plans show differences on spending, taxes and dealing with the government.

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STEVE INSKEEP, HOST:

Political campaigns, like the one this year, are waged with words, not numbers. But governing is often the opposite, focusing especially on those budget numbers. And the budgets that Democrats and Republicans are proposing reflect strikingly different approaches on spending taxes and dealing with the federal government.

We're going to talk about this with David Wessel, economics editor of The Wall Street Journal, regular guest here.

David, good morning once again.

DAVID WESSEL: Good morning, Steve.

INSKEEP: OK. What's the big difference - the big picture difference - between the Democratic budget approach here and the Republican budget?

WESSEL: Well, Steve, the president's budget is the very detailed. The budget that Chairman of the Budget Committee, Paul Ryan of Wisconsin has put out version, is not as detailed but it's about as close to a Republican budget as exists. And when you look at them, you can really see how different their visions for government are. Mr. Ryan aims for a much smaller government than Mr. Obama's.

In the year 2020, his budget would see the government spending $450 billion less than the Mr. Obama, and that means the government would do less than it does now and less than Mr. Obama thinks it should do.

INSKEEP: Doing specifically what less?

WESSEL: Well, as I said, the House Republican budget is an outline, that's all the Budget Committee is required to do, but Mr. Ryan would spend more on defense than Mr. Obama, and significantly less on the panoply of domestic programs for which Congress appropriates money annually. He thinks, for instance, that the president would spend too much on Pell grants to college kids, and Obama thinks Mr. Ryan would spend too little on those.

INSKEEP: What about taxes?

WESSEL: Ah. Well, just as he'd spend more, Mr. Obama would tax more than Mr. Ryan. In that same year, fiscal year 2020, he'd tax us about $180 billion more. He wants to raise taxes on upper income tax payers, explicitly saying that the rich should pay more than they do now. Mr. Ryan disagrees with that. He's talking about changing the tax code. He says he wants to get rid of a lot of deductions and credits in order to have lower tax rates. If you look at the numbers, that would appear to reduce the taxes that rich people pay, more than it would reduce the taxes on middle class and lower income people. But without a fully detailed plan, you have to make a lot of assumptions to come to that conclusion.

INSKEEP: OK. So some of the details missing here. But based on what we know, is there any common ground between the White House approach, here, and the Paul Ryan approach?

WESSEL: Well, we're in the post-denial phase of talking about the deficit.

(SOUNDBITE OF LAUGHTER)

WESSEL: Both these budgets would cut the deficit. Mr. Ryan's would cut it more than Mr. Obama's, and both of them are targeting some of the spending that you'd have to do if you're going to reduce a budget deficit. So, for instance, farm subsidies, both of them target them. The Medicaid program, both of them would spend less on that, although they'd do it in different ways. But basically, Mr. Ryan would cut the deficit without raising taxes and raising Defense spending, so that means he would have to spend much less on domestic programs than Mr. Obama thinks is wise.

INSKEEP: Which is a wide range of programs, that aren't actually the hugest part of the federal budget, but can be rather popular and certainly have constituencies, in any case. Can the differences be resolved here?

WESSEL: Well, the rhetoric now is pretty stiff. Mr. Obama has called the Ryan budget thinly-veiled social Darwinism, and he's trying to make sure that everybody associates that with Republican presidential candidate Mitt Romney. And Mr. Ryan says the Obama budget would endanger the livelihoods of our kids and grandkids. Nothing's going to get resolved before the election, and it's not clear what happens after the election, but there is a ticking time bomb out there on these huge tax increases and spending cuts that are set to take effect if Congress doesn't deal with these issues then. But there's also a chance they'll just kick the can down the road again and we'll be arguing about this at this time next year.

INSKEEP: David, thanks very much.

WESSEL: You're welcome.

INSKEEP: David Wessel is economics editor of The Wall Street Journal and also author of a book on the budget called, "Red Ink," which is coming out this summer.

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