House Budget Committee Chairman Paul Ryan (R-WI) unveiled the third version of his budget this morning, and due to the demand of his party’s conservative base, this version supposedly achieves balance within 10 years, at least a decade faster than past versions would have theoretically achieved the same goal.
But just like past versions, this version will fail to actually achieve the balance Ryan claims. That’s because the budget only gets to a balanced level in 2023 because Ryan has assumed revenue and spending levels that his budget can’t actually match. Ryan’s budget provides more than $7 trillion in tax breaks to the wealthy and corporations without proposing specific ways to make up for that lost revenue, meaning his budget — the one he has touted as a plan to rein in Washington’s runaway deficits and debt — will fall short of his goals, as Center for American Progress Tax and Budget Policy Director Michael Linden explains:
Last year the Tax Policy Center estimated that these provisions would generate revenue equaling just 15.8 percent of GDP in 2022. Extrapolating to 2023 suggests that Rep. Ryan is missing about $840 billion of revenue in 2023 alone, and approximately $7 trillion over the entire 10-year period from 2014 through 2023. After accounting for the added interest costs from all of these unpaid-for tax cuts, Ryan’s budget would still be about $1.2 trillion in the red in 2023.
But it isn’t just fantasy revenue levels on which Ryan relies. He also is basing his budget on massive spending cuts that aren’t laid out in specific (and haven’t been in previous versions either) and aren’t realistic, given that they would take spending levels lower than they have ever been before. As Linden notes, Ryan’s budget would drop non-defense discretionary spending to just 2.1 percent of GDP, even though it has never totaled less than 3.2 percent of GDP since records began in 1962.
It’s for this reason that the Congressional Budget Office told Ryan it couldn’t give him a better long-term outlook for his budget — the only reason the nonpartisan office could judge the plan at all was because it applied the revenue and spending assumptions he provided. And because Ryan cuts so much revenue without a plausible way to make up for it, his plan to reduce the debt would likely add trillions of dollars to it instead.