Despite Washington coming to grips with the fact that the debt threat is real, policymakers still are not having the debate Americans deserve.
The talk is too often restricted to “shared sacrifice.” This sets up a debate where we are really just arguing over whom to hurt and how best to manage the decline of our nation. It is a framework that accepts permanently higher taxes and bureaucratically determined access to health care as givens.
A better name for this approach is “shared scarcity.” It represents a deeply pessimistic vision for the future of this country — one that would lead us to a diminished future.
The House-passed budget — “The Path to Prosperity” — offers an alternative vision. It is rooted in the recognition that spending discipline and economic growth are the keys to balancing the federal budget.
In a recent speech he gave in response to the House budget, President Barack Obama outlined his approach to addressing our fiscal imbalance. It begins with trillions of dollars in higher taxes and relies on a plan to control costs in Medicare: A board of 15 unelected bureaucrats would be given more power to deeply ration Medicare spending in ways that would disrupt the lives of those in retirement, leading to waiting lists and denied care for today’s seniors.
By contrast, the House-passed budget gets health care spending under control by empowering Americans to fight back against skyrocketing costs. Our budget makes no changes for those in or near retirement, and offers future generations a strengthened Medicare program they can count on, with guaranteed coverage options, less help for the wealthy, and more help for the poor and the sick.
There is widespread, bipartisan agreement that the open-ended, fee-for-service structure of Medicare is a key driver of health-care cost inflation. Medicare is not the train being pulled along by the engine of rising costs. Medicare is the engine — and the rest of us are getting taken for a ride.
The disagreement isn’t really about the problem — it’s about the solution to controlling costs. Our budget would achieve this by letting seniors act as value-conscious consumers in a transparent and competitive market. Our plan is to give seniors the power to deny business to inefficient health care providers. The Obama plan is to give government the power to deny health care to seniors.
The House-passed budget also rejects the president’s call for permanently higher taxes. Instead, it calls for scaling back or eliminating loopholes and carve-outs in the tax code that are distorting economic incentives. It does this, not to raise taxes, but to create space for lower rates to provide incentives for businesses to create jobs in America.
By contrast, the president says he wants to eliminate deductions, but he also wants to raise rates, including raising the top rate to 44.8 percent. That would amount to a $1.5 trillion tax hike on families and job creators.
The president says that only the richest people in America would be affected by his plan. Class warfare may or may not be clever politics, but it is terrible economics. Redistributing wealth never creates more of it, and sowing class envy makes America weaker, not stronger. Playing one group against another only distracts us from the true sources of inequity in this country — corporate welfare that enriches the powerful and empty promises that betray the powerless.
Too many in Washington remain fixated on the next election, at the expense of the next generation. But there is a hidden cost to the shared scarcity mentality — a cost measured in lost prosperity and lost freedom.
We face a choice between two futures. We can continue to go down the path toward shared scarcity, or we can choose the path of renewed prosperity.
But the comeback starts by putting aside class warfare and focusing on what we can achieve together.
Rep. Paul Ryan, R-Wis., chairs the House Budget Committee. He authored “The Path to Prosperity.”