Flying in the face of the White House — and perhaps last November’s election results — House Republicans proposed Wednesday to recall much of President Barack Obama’s economic recovery plan and then go forward with new business tax cuts and a five-year freeze on non-defense spending.
The sweeping attack represents little political threat to the Democratic resolution expected to be approved by the full House Thursday. But as floor debate begins, the 53-page report is the most complete effort yet by the minority to map out a detailed alternative to the president’s program.
Put forward by Wisconsin Rep. Paul Ryan, the ranking Republican on the House Budget Committee, the 10-year plan seeks to trim $3.6 trillion altogether from the accumulated deficits projected for Obama’s budget by the end of the decade. But given the generous tax cuts, deficits would still be large, and debt as a percentage of the gross domestic product would grow to 62.5 percent compared to 40.8 percent in 2008.
Ryan is gambling that long-term savings from changes in Medicare and adjustments in Social Security will help to bring down that percentage over time, and he argued that his scenario will at least maintain some control over the relative debt by never going above 75 percent of GDP.
By comparison, Obama’s budget would breach the 75 percent as early as 2015 and then move to 82 percent by 2019 according to the Congressional Budget Office.
With the Baby Boom generation moving into retirement, Ryan said any plan will see debt rise, but that under Obama’s proposal it becomes “uncontrollable.” As a veteran of past budget debates, he said he was sympathetic with the president having inherited a monumental fiscal crisis. But he said the question now should be, “Is he fixing it or making it worse?”
The White House quickly countered, arguing that Ryan’s policy proposals would only magnify the Republican mistakes of the past.
“If you expected a GOP alternative to the failed policies of the past that got our country into the worst economic crisis since the Great Depression, then I have two words for you: April Fool’s,” said Kenneth Baer, communications director for the Office of Management and Budget.
Indeed, many of the tax ideas show no effort to temper those tax breaks — under the Bush Administration—which most benefit upper income families. And Ryan would add on top of this a cut in the corporate tax rate to 25 percent from 35 percent and temporarily suspend all capital gains taxes for 2009 and 2010.
Even in the case of oil companies, he shields the industry from an estimated $31 billion to $80 billion in tax increases backed by the president and dismisses any idea of a cap-and-trade system to cope with climate change and global warming.
In the case of the massive stimulus bill approved in February, Ryan would rescind any new spending beyond the fiscal year ending Sept. 30 with the exception of unemployment assistance.