The Grand Compromise

[Geee]

Human Events:

WASHINGTON -- The most serious charge against Rep. Paul Ryan's budget is not the risible claim, made most prominently by President Obama in his George Washington University address, that it would "sacrifice the America we believe in." The serious charge is that the Ryan plan fails by its own standards: Because it only cuts spending without raising taxes, it accumulates trillions of debt and doesn't balance the budget until the 2030s. If the debt is such a national emergency, they say, Ryan never really gets you there from here.

But the critics miss the point. You can't get there from here without Ryan's plan. It's the essential element. Of course Ryan is not going to propose tax increases. You don't need Republicans for that. That's what Democrats do. The president's speech was a prose poem to higher taxes -- with every allusion to spending cuts guarded by a phalanx of impenetrable caveats.

Ryan reduces federal spending by $6 trillion over 10 years -- from the current 24 percent of GDP to the historical post-World War II average of about 20 percent.


Now, the historical average for revenues over the last 40 years is between 18 percent and 19 percent of GDP. As we return to that level with the economic recovery (we're now at about 15 percent), Ryan would still leave us with an annual deficit in 2021 of 1.6 percent of GDP.

The critics are right to focus on that gap. But it is bridgeable. And the mechanism for doing so is in plain sight: tax reform.