Video: Paul Ryan reveals Path to Prosperity 3.0

Guy Benson has a useful bullet-point summary. This budget is less realistic than Ryan’s last two budgets, but that’s because the purpose of introducing a budget this year is different than it was the past two years. Philip Klein explains the wishful thinking involved:

Ryan’s budget is likely to come under criticism from several fronts, beyond the obvious attacks from Democrats that his plan would destroy Medicare. The issue he’s most vulnerable on is that while he calls for the repeal of Obamacare, he still assumes all of the Medicare savings from the law. As a vice presidential candidate, he supported Mitt Romney’s plan to restore all of those Medicare cuts. He also doesn’t offer any plan to reform the broader health care system beyond repealing Obamacare. On tax reform, he has deferred the details to the House Ways and Means committee.

A budget is a governing vision – an opening bid – and therefore it doesn’t necessarily have to reflect political reality. But at some point Ryan is going to have to grapple with the budget challenges assuming Obamacare is not repealed.

The last time he released a budget, the Supreme Court was set to strike down the mandate and the GOP was set to take back the White House. It was realistic at the time to game out a 10-year budget without O-Care; a year later, with the law having dodged both of those bullets, that’s not the case. Ryan was asked about that at today’s presser and said he’s confident ObamaCare will eventually collapse under its own weight, but even if that’s true, there’s no reason to believe the law’s demise will mean repeal rather than more regulation.

He’s also calling for balancing the budget in 10 years (with a small surplus as soon as 2023), rather than over the course of decades as the previous Paths to Prosperity imagined, and two income tax rates of 10 percent on the lower end and 25 percent on the higher end. Anyone see either of those things happening anytime soon? James Pethokoukis wonders:

The plan lowers the top tax rate to 25%, which, like an Obamacare repeal, ain’t going to happen. The reduction — the path to which remains unspecified — also will require fiscal gymnastics so as to a) not lose revenue and b) not raise taxes on the middle-class. Tax reform is an opportunity for the GOP to show it is the party of parents and kids, not just the party of heroic entrepreneurs and CEOs. Better to have a higher individual rate and dramatically reduce the current tax code’s bias against investment capital and human capital…

Why does the budget need to balance in ten years? Debt reduction doesn’t require balance, just that the economy is growing faster than the debt. While the plan does put the debt/GDP ratio on a downward trajectory — rather than merely stabilized as Obama and the Senate Democrats would do — it probably doesn’t need to be quite as steep.

How come this year’s budget is less realistic than it was the past two years? Simple: Because it can afford to be. Ryan had the stage largely to himself with the first two versions of Path to Prosperity; Democrats were too terrified of trying to reconcile their opposition to entitlement reform with, er, math to produce their own budget. Under normal circumstances his plan would be a partisan “opening bid” in budget negotiations, as Klein puts it, but under the unique circumstances of Democratic abdication, knowing that his plan would receive unusually close attention, he could be a bit more realistic about what sustainability would require long-term. Now, with Patty Murray and Senate Dems finally goaded into dropping another trillion-dollar tax bomb on the public, he can counter with the full GOP wish list — balanced books in 10 years, ObamaCare out the window, top rate that’s nearly 15 percent lower than it is now.

I think Ross Douthat’s right that that’s partly a concession to the caucus: After losing on the fiscal cliff and kicking the debt-ceiling can down the road, here’s where they get to flex some muscle and show what real fiscal discipline would look like. Besides, after being demagogued over his budget for two years plus a presidential campaign, Ryan must be feeling as though the Democrats have already emptied their arsenal against him. A former top aide to Pelosi admitted to WaPo that Obama’s budget attacks on Romney/Ryan last year didn’t matter much; at this point, if you’re an American voter and you haven’t yet been convinced that Paul Ryan personally wants to kill your grandma, you’ll never be convinced. So if you’re Ryan, why not let it all hang out this time? For once, there’ll be something to criticize on the other side. Start by demanding everything in your own offer and then try to deal.

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