House Budget Committee Chairman Paul Ryan released his budget proposal yesterday, his last as committee chairman. This budget differs greatly from the budget request submitted by President Obama last month. Ryan would “cut” federal spending by $5.1 trillion over the next 10 years and calls upon Congress to pass pro-growth tax reform. However, Ryan’s budget is still a mixed bag from a small-government perspective.
Positive Reforms in Ryan’s budget:
* Medicaid Block Grants: Ryan suggests block granting Medicaid to institute some fiscal sanity to this ever-growing program. This reform would reduce state government incentives to overspend and would allow them greater flexibility to innovate and cut costs. Federal spending would be reduced by $732 billion compared to baseline by this simple reform.
* SNAP Block Grants: The Supplemental Nutrition Assistance Program (“food stamps”) would also be block granted, saving $125 billion over 10 years compared to baseline. SNAP and Medicaid block grant reforms would copy the successful approach of welfare reforms in the 1990s.
Downsides to Ryan’s budget:
* Social Security Reform: Ryan’s budget does not tackle Social Security reform, leaving almost one quarter of the federal budget unchanged. He calls on the president and Congress to submit recommendations to reform the program, but does not submit any suggestions of his own.
* Higher Revenue Baseline: Chairman Ryan calls for pro-growth tax reform within his budget; however, he adopts the Congressional Budget Office’s current revenue baseline. This would keep the extra revenues generated from the numerous tax hikes enacted over the last several years.
Read more at http://www.cato.org/blog/chairmans-ryan-budget-mixed-bag-reforms
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