Opinion: Columnists

Veronique de Rugy:A simple three-part budget test

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President Obama is late with his budget (again) this year, but several in Congress are coming out with their own fiscal plans. On Thursday morning, House Republicans approved a budget proposal drafted by House Budget Committee Chairman Paul Ryan, R-Wis. The Senate began considering another Thursday evening, by Senate Budget Committee Chairwoman Patty Murray, D-Wash.

But how can one properly assess whether a budget plan is good or not? There are three core principles that can help make sense of it all. First, a good plan actually does cut spending; second, it puts everything on the table; third, it addresses our debt problem.

Question 1: Do these budget plans include real spending cuts? No. Both Ryan's plan and Murray's increase spending. In fact, the Ryan plan increases spending over the next 10 years from $3.5 trillion in FY2014 to almost $5 trillion in FY2023. The Murray plan increases spending to $5.7 trillion by FY2023. So while the plans project a reduction in the growth rate of spending, no cuts actually take place.

Question 2: Do the budget plans' recommendations prohibit exceptions for politically favored programs? No, both plans safeguard their sacred cows. Programs that cater to certain voting demographics or political constituencies are protected.

The Murray plan proposes a few minor cuts to Medicare programs, for example, but without actually reforming the program to control the spending explosion that we will face in a next few years. It also undoes the sequester cuts. The Murray plan caters to welfare beneficiaries and the middle class. On the House Republican side, their plan repeals Obama's health care law, but once again, it pushes off urgent Medicare reforms until 2024 and does not touch Social Security. It also shelters defense spending from already implemented cuts.

Question 3: Do reforms address our long-term debt problem? That means reforming the drivers of our future debt, i.e., Medicare, Medicaid and Social Security. The Ryan plan does to some extent. It block-grants Medicaid, and it repeals Obamacare. It introduces a premium-support plan as an alternative to Medicare but pushes the reform off until 2024. This is unfortunate, considering that last year's Trustees Report shows the program will become insolvent by 2024, if not sooner. In addition, the proposal includes no credible plan to force future Congresses to implement its reforms.

But the Senate Democrat plan ignores entitlement reform altogether. According to the Washington Post editorial board, "There is literally nothing -- not a word -- suggestive of trimming Social Security, whether through greater means-testing, a more realistic inflation adjustment or reforming disability benefits. ... As for the coming flow of baby boomers into Medicare, the Democrats declare that 'new retirees deserve the same promise of quality, affordable health care from which their parents have benefitted -- and it is the position of the Senate Budget that they ought to get it.' "

So the Ryan plan is widely superior to the Murray plan in that it at least tries to address our debt problem, but neither plan fits all three of our core principles. Taxpayers deserve better.

Examiner Contributor Veronique de Rugy is a senior research fellow of the Mercatus Center at George Mason University.

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