Editorial Board

Ryan Budget Replays Republican Hits as Time Marches On

The Ryan budget is back and looking awfully familiar. This is Representative Paul Ryan’s third Republican budget in as many years. Like the previous two, it includes apocalyptic warnings about “debasement of our currency” and a U.S. government determined to “cheat us out of our just rewards.” In between such scenarios, it proposes $4.6 trillion in deficit reduction over the next decade, culminating in a balanced budget.

Although we don’t agree with Ryan’s perennially dire assessment of the state of the nation, we recognize that he has performed a useful function in making deficit reduction a clarion call. But he and his allies need a new approach.

First, the fiscal climate has shifted. Despite the absence of a grand bargain on the budget, Washington has been lurching toward deficit control. Spending curbs instituted in 2011 and a tax increase approved this January have relieved pressure on the federal budget. Sequestration, the indiscriminate budget cuts that began life as a concept too dreadful to bear, is now incorporated in the continuing resolution passed by the House to fund the government through September. The Senate appears inclined to keep the $1.1 trillion in cuts, though not their randomness. Should the cuts hold, Congress and President Barack Obama will have enacted more than $3 trillion in deficit reduction since 2011.

This is significant. That it also falls short of the savings necessary for long-term stability gives the Ryan budget its saliency. Debt held by the public is 73 percent of gross domestic product and must be reduced. The extended run of historically low interest rates, which support U.S. borrowing, can’t last forever.

Still, it’s hard to view this latest budget as anything more than a holding pattern for a political party caught between

Similarly, the last Ryan budget was fully vetted in the 2012 presidential campaign. Afterward, Democrats won the White House and picked up seats in the Senate and House. Republicans can keep offering the same platform of spending cuts, but they seem unlikely to achieve different results.

Nor should they. The changes Ryan proposes for Medicare (vouchers) and Medicaid (state block grants) would merely shift the health-care burden from the federal government to individuals and states. Because private health plans aren’t as efficient as Medicare, total public and private spending on health care would almost certainly increase -- the opposite of what’s needed in a country headed toward devoting $1 in every $5 of gross domestic product to health care.

As we have said, it is crucial that policy makers find ways to bring down medical costs, but there are ways to do this without leaving the elderly and poor with inadequate health care. Medicare could, for example, raise premiums for high earners, reduce payments to drug companies or drive competition by making public the prices it pays for drugs, devices and medical services.

It’s praiseworthy that, unlike the Senate, the House has produced a budget in recent years to stake out its positions and provoke debate. We look forward to seeing the Senate’s offering this week -- its first since 2009 -- followed by the president’s own tardy outline. Obama has already made it clear that he is willing to trade savings on entitlements for closing tax loopholes that largely benefit the wealthy.

If Congress can leave behind its penchant for drama and return to a regular budgeting and appropriations process, it will give the nation confidence and help re-establish the natural rhythm of government, which these years of political brinkmanship have disrupted. The latest Ryan budget, like its predecessors, is an artifact of the era.

    To contact the senior editor responsible for Bloomberg View’s editorials: David Shipley at davidshipley@bloomberg.net .

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