Issue 138 Ryan Plan: the updates August 8, 2013

 
As promised I have read through the Ryan Plan, the conservative budget proposed by Republicans in the House of Representatives. Keep in mind, the U.S. still does not have a working budget. Paul Ryan had initially come up with his plan for the 2010 through 2012/13 time frame which I wrote about in issues 26, 27 and 28. So when I say it is the same as the previous plan, you can go to my summary in those three issues. Let’s get started.

The same: The idea to means test people’s income and finances to determine their benefits is the same. He seeks to reform Medicaid by block granting money to States which would give them flexibility on what benefits they provide especially when combined with the work requirements that would be re-instated under this plan. It is believed that by allowing this flexibility that it would support upward mobility by removing barriers (and certain benefits) to keep people poor or incentivize them not to work.

It would consolidate job programs and shut down failing job training institutions funded by or run by the federal government. With respect to taxation, the goal is still to remove taxation from a number of areas while creating a two tear tax program with the lowest rate being 10%, and the highest being 25%. In addition, spending caps would be put into place just like in the original.

What's different?: The plan deals with energy independence by opening up federal land and ocean to drilling for both oil and natural gas. However, it does not say if oil and gas will receive government subsidies and how many if any subsidies for "green tech" will be reduced. Also, the plan will block the Department of Interior from getting 70% of monies generated from the land being used for drilling and set it towards paying off the federal deficit, rather than allowing the money to be used to buy up more land in the United States.

Under this plan the military and the Veterans administration (VA) will be fully funded. The soldiers will get a budget in excess of $500 billion to develop technology to defend our nation from "threats" and redeploy where needed. As to the Veterans, well apparently the VA is underfunded, but I don't put much stock in that. I feel that it is more likely that the VA is inefficient due to government regulations on how to take care of veterans, aka, it lacks flexibility to both treat veterans with custom care, or to outsource to cheep but equally/more effective charities who may be able to do the same job for less.

Ryan want to eliminate Fannie Mae and Freddie Mac, the home mortgage giants that have a monopoly on the U.S. housing sector, while fixing flawed regulations. He also want to update accounting rules for programs and departments, cap pell grants while eliminating barriers to education that restrict innovation (like online teaching). This includes eliminating duplicate and failing programs in the Department of Education (currently 82 programs already are in operation). I would eliminate this department as it limits innovation (as Ryan pointed out) by preventing innovation. But the department exists to send out money to schools and students if they meet certain requirements (either through loans or grants) but only serves to restrict how that money is spent and placing conditions on schools that cause school taxes to rise unnecessarily.

In a move to save money, Ryan wants have all members of the federal government pay more toward retirement as their total compensation (an elected and unelected members pay, retirement and other perks) is 16% more than the private sector. It is estimated that it will save at least $132 billion.

Finally, a board will be created staffed by members of bi-partisan watch dog groups and government auditors who will decide where to cut and how to do it. This is Ryan's alternative to letting the heads of the federal agencies cut spending as part of reconciliation as they have been purposely not cutting waste such as their party budgets, but seem intent on cutting everything else. The board’s decision will be final and will be implemented.

Conclusion: I agree with getting government out of the way. In addition I want America to be prosperous, but I do not agree on spending more money. The federal government is too slow to adapt to the changing job situations and thus cannot successfully make any job program work properly. It should be cut, and given to the private sector who will after a period of time innovate to make job training quick and efficient. With respect to schooling, the government is equally as inept in its adapting to changing market trends. It will further stifle education even with reforms that try to slim the system down. In this situation it is better left to the local government and their welfare offices along with private scholarships to help children go to college. I agree, Fannie and Freddie's hold on the housing market must disappear, and I like the commission idea (so long as they are not paid to do it). I am troubled by how the plan still spends more that what we as a nation have financially despite all the cuts (not taking into account accelerations in economic growth). Overall, it is an "OK" plan, but it needs more government out of the way rather than trying to help but gumming up what works.