As Congressional Republicans again rally around Rep. Paul Ryan’s (R-WI) budget and its goal of eliminating the deficit in ten years, many are using an old talking point. They claim that the federal government should model itself on the families and businesses and stop spending more money than it takes in. But a ThinkProgress examination of recent personal financial disclosure filings reveals that many of the same lawmakers who are urging the nation to balance its books are themselves in debt and have taken out personal and/or business loans.

Government is nothing like a business and cannot be run as one — its aim is to protect its citizens, not to turn a profit. Businesses and individuals often borrow in the short term to make investments for the long term — mortgages, lines of credits, and other sorts of loans are facts of life for millions of Americans and businesses of all sizes. Start-up businesses rarely break even for the first several years and few people can afford to buy their first home outright or pay for their kids to go to college out of pocket.

Still, many politicians who advocate for cuts to vital programs and a dangerous Balanced Budget Amendment to the U.S. Constitution use the argument that government needs to live with in its means because everyone else does — but have debt of their own. These hypocrites include:

• House Budget Committee Member Tom Rice (R-SC): Wrote: “At a time when hardworking American families are living off of a budget, the federal government should be no different. My colleagues and I believe it is time for America to change course and get back on a path of prosperity. This begins with a balanced budget plan.” Reported five mortgages totaling over $4 million.
• House Budget Committee Member Diane Black (R-TN): Wrote: “The state of Tennessee balances its budget, American families and businesses balance their budgets and so should the federal government,” and “Balancing the budget is not extreme; it is what American families across this country do on a regular basis.” Reported four mortgages on three properties, totaling more than $3 million.
• House Budget Committee Member Roger Williams (R-TX): Said Wednesday: “We have to have a balanced budget. I have to balance my budget. Everybody in America has to balance their family’s budget or their business’ budget, not every ten years, not even every single year, but every single day.” Reported more than $2.5 million in business debts.
• House Budget Committee Member Scott Rigell (R-VA): Boasted that he voted for a balanced budget amendment because: “I know that American families do what they have to do to live within their means; and so too should the government.” Reported $1.5 million in lines of credit, a $500,000-plus mortgage, and over $10,000 in credit card debt.

Read more

Congressman Tom Price (R-GA) made a startling admission on CNN’s Starting Point on Wednesday morning, telling host Soledad O’Brien that Republicans are not concerned about how they cut spending — or the millions of people who suffer as a result — so long as they achieve a balanced budget.

O’BREIN: [The President] said he doesn’t want balance for the sake of balance, that actually the wrong kinds of cuts that would be hurtful to people would be a problem. What do make of what he told George Stephanopoulos?

REP. PRICE: We believe it’s important to balance not the how of ‘how you balance,’ but the ‘why’, why is it important to balance. well it’s important to get our budget in balance, so that means that Washington doesn’t spend more money than it takes in, just like families can’t, just like businesses across this country can’t.

Watch it:

The lack of concern over how Republicans are cutting some $5 trillion in spending is evident in the cuts they are planning to hand down to low-income families, young people, women and seniors, all of whom stand to lose significant protections under the Republicans’ balanced budget. Meanwhile, the Ryan budget likely maintains billions in tax savings for millionaires, Big Oil and financial conglomerates that will benefit from the proposed repeal of regulations imposed on Wall Street.

The comment provides a sharp contrast to President Obama’s competing vision for the federal budget. During an interview with Geroge Stephanopoulos, Obama argued that rushing to balance the budget during a recovery could undermine growth and significantly hurt the most vulnerable populations,” Obama said. “If we’ve controlled spending and we’ve got a smart entitlement package, then potentially what you have is balance. But it’s not balance on the backs of, you know, the poor, the elderly, students who need student loans, families who’ve got disabled kids. That’s not the right way to balance our budget.”

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.

The House Republican budget released by Budget Committee Chairman Paul Ryan (R-WI) this morning has little chance of becoming law, but that doesn’t mean it isn’t a meaningful document that acts as a weathervane of the GOP’s priorities and views on how to best shape the American economy. And despite the party’s “rebranding” efforts, its budget is more of the same: it adheres almost exactly to the principles outlined by Mitt Romney, it skews heavily toward the wealthiest Americans at the direct expense of the poor, and it aims to put America on an overall economic path that would be painful in both the short- and long-terms.

Take, for instance, the budget’s overall focus on deficits and debt. Ryan and the GOP are arguing that the government has a spending problem that needs to be reined in to allow the economy to grow, and he even cites a Congressional Budget Office report that purports to support that notion:

But a balanced budget will help the economy. Smaller deficits will keep interest rates low, which will help small businesses to expand and hire. It’s no surprise, then, that the nonpartisan Congressional Budget Office believes that legislation reducing the deficit as much as our budget does would boost gross national product by 1.7% in 2023.

It’s worth noting here that Ryan’s budget only balances if his fantasy assumptions about revenue are correct, but even if it did, a balanced budget won’t help the economy in the short-term. The very CBO report Ryan cites says that an immediate focus on deficit reduction would hamper the economic recovery by knocking 0.6 percent off of growth. And as we’ve pointed out here, government spending has plateaued since President Obama took office. Despite Ryan’s assertion in the budget that “government spending is no substitute for a true recovery led by the private sector,” past recoveries don’t support that notion either. As this chart shows, fiscal policy has aided recoveries from the last two recessions, adding an average of half-a-point to economic growth. But after the stimulus initially aided this recovery, deficit reduction had a negative impact on growth over the next two years:

Ryan is right that the United States has a spending problem, but right now, the problem is that the government isn’t spending enough. European countries that have pursued austerity have slumped back into recessions. But the United States’ pursuit of stimulus put it on a path to recovery, even if a premature focus on debts and deficits has made that recovery more tepid than it should have been. Ryan’s budget would only make that worse in the short-term, to say nothing of what repeating the Republican failures of the past by cutting taxes for the rich and slashing the social safety net would do the long-term prospects of the American economy.

House Budget Committee Chairman Paul Ryan (R-WI) previewed the latest version of his budget, which he will formally unveil today, in an editorial in the Wall Street Journal, and the proposal closely mirrors both his past budgets and the plans he and Mitt Romney laid out during the 2012 presidential campaign. Like the Romney-Ryan 2012 plans, this version includes massive budget cuts to safety net programs and a major overhaul of the tax code that will largely benefit the wealthy and corporations.

As the 2012 budget did, the 2013 version reduces the number of income tax brackets from six to two, with marginal rates set at 10 percent and 25 percent. It is expected to stick to Ryan’s past tax proposals as well by repealing the Alternative Minimum Tax, cutting the top corporate tax rate to 25 percent, and converting the corporate tax code to an “international” system.

Estimates showed that past plans amounted to $3 trillion tax giveaways to the wealthy, but because of tax increases that took effect in 2013, Ryan’s newest tax cut is even larger. The federal government in all would lose a total of $7 trillion in revenue, according to Center for American Progress Tax and Budget Policy Director Michael Linden, the majority of which would go to the richest Americans and corporations. Reducing the corporate income tax to 25 percent would provide a tax break of more than $1 trillion; further tax changes would result in even bigger cuts. Trillions more would go to the wealthy.

Ryan again insists that those tax cuts won’t actually be realized, since any reform will be neutral thanks to the closure of tax loopholes. But he made similar claims in both 2011 and 2012, and in neither of those instances did he offer specific loopholes for closure, likely because doing so would have proven politically impractical.

Romney and Ryan also insisted that their proposal would cut taxes for every American (especially the wealthy) while not adding a dime to the federal deficit, but nonpartisan analysts found that upholding both of those standards was impossible. The Tax Policy Center found that Romney’s plan would have to make up $4.8 trillion through the closure of tax loopholes; failing that, he would have no choice but to add to the deficit or raise taxes by $2,000 on the average middle class family. Ryan’s version will have to make up even more revenue to avoid similar pitfalls.

Ryan has also stuck to the same spending principles of past budgets. He again turns Medicare into a voucher program and converts many social safety net programs to block grants modeled after the failed 1996 welfare reform law. Those plans would result in higher health care costs to seniors and major cuts to the social safety net, all while his plan gives a massive tax break to the richest Americans.

Between the new-and-improved Simpson-Bowles plan, Joe Scarborough’s feud with Paul Krugman, the relentless drumbeat of the entire Republican Party, and the media blitzkrieg launched by the billionaire-driven “Fix the Debt” campaign, one might think no serious and responsible American can ignore the unassailable truth: America faces a debt crisis, which we must act on immediately and decisively.

Well, not quite. The actual truth is that the debt everyone’s freaking out about does not exist.

Some of the debt certainly exists, like the roughly $11.6 trillion owed to foreign and private creditors. But that isn’t the debt anyone’s worried about. If we stopped adding to it tomorrow, the debt as it stands would pose essentially zero threat to the country’s fiscal health, as the ongoing growth of the economy would send our debt-to-GDP ratio dropping like a rock.

So the debt that’s got everyone worried is the part we haven’t yet incurred. And that debt, by definition, does not exist. It’s not a certainty, it’s merely a projection by the Congressional Budget Office. And trying to model how the federal budget, not to mention the entire American economy, will behave years or even decades in the future is a devilishly treacherous business.

For instance: one of Rep. Paul Ryan’s (R-WI) favorite talking points in 2011 was that the computer simulations CBO uses to model the economy crash when they attempt to account for the debt load in 2037. Imagine trying to model the 2011 economy in 1985. Things you’d never see coming include (among other things) the Internet, fracking, massive advances in computing power, the renewable energy boom, three wars, a massive recession, and Harry Potter. And predictions can be hard even over shorter time frames. In 1995, CBO predicted the deficit in 2000 would be well over $200 billion. We ran a surplus of $236 billion.

In fact, Ryan plastered dramatic graphs of debt going out 75 years onto everything in sight while stumping for his last budget. Forget predicting 2011 in 1985. That’s like predicting 2011 in 1940.
Read more