Imagining a Deficit Plan From Republicans By DAVID LEONHARDT

September 28, 2010
Imagining a Deficit Plan From Republicans By DAVID LEONHARDT
Washington

In their Pledge to America, Congressional Republicans have used the old trick of promising specific tax cuts and vague spending cuts. It’s the politically easy approach, and it is likely to be as bad for the budget as when George W. Bush tried it.

The sad thing is, a truly conservative approach to the deficit does exist. You can find strands of it among Republican governors, some of the party’s current Congressional candidates and the ranking Republican on the House Budget Committee, Paul Ryan.

The brief version might sound something like this: The federal government has outgrown its ability to pay for itself. Our economic future and even our national security depend on solving the problem. Yet President Obama has expanded health insurance, increased education spending and escalated a war of choice. Elect us, and fiscal responsibility won’t have to wait in line.

The detailed plan would start in the same place that Republican campaign rhetoric does, with rooting out waste and bloat. Some tasks, like mail delivery and air traffic control, could be privatized. The federal work force could be reduced, and pay for federal workers could be cut. Federal aid to states could be cut, too.

But then comes the crucial difference.

Actual fiscal conservatives acknowledge that these steps do not come anywhere close to solving the long-term deficit. By 2035, the deficit (even without counting interest payments on the federal debt) is on course to reach $1.9 trillion, according to the Congressional Budget Office. If you reduced domestic discretionary spending to its share of the economy under Ronald Reagan and then eviscerated it an additional 20 percent, you would shrink the deficit by all of $100 billion.

The bulk of the deficit problem instead comes from three popular programs, Medicare, Social Security and the military, and they happen to be the ones the Republican pledge exempts from cuts. But it’s impossible to fix the deficit without making cuts to these programs or raising taxes. To suggest otherwise is to claim that 10 minus 1 equals 5.

“We as Republicans need to realize that you can’t just cut off the welfare queen and balance the budget,” says Rand Paul, a Senate candidate in Kentucky, who has some extreme views on other issues but is evidently pro-arithmetic. “The only way you’ll ever get close to balancing the budget is if you look at the entire budget.”

When they’re not talking for quotation, some Republicans will explain that the pledge is, of course, a political document: although it may not spell out specific budget cuts, the party is willing to make them. But I think this view misreads recent history.

Republicans controlled the White House and Congress for much of 2001 to 2006, and they turned a big surplus into a big deficit. In the last two years, they have opposed several Obama administration plans for reducing the deficit, including cuts to Medicare, weapons programs and farm subsidies, as well as tax increases on the affluent. Given this history, my colleague Ross Douthat concluded that the pledge “might create a larger deficit than the Obama alternative.”

In short, the pledge imagines a world without tough choices, where we can have low taxes, big government and a balanced budget. And therein lies the path to ever larger deficits.

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The essential question for any would-be budget balancer is how large the federal government should be.

For most of the last century, the government has been getting bigger. Its spending equaled about 2 percent of gross domestic product in 1900, 14 percent just after World War II and, after ballooning to almost 25 percent during the financial crisis, will fall to 23 percent in the next few years.

There is a good argument that the government should grow as societies become richer. Once people can afford the basics, they want services that the private sector often does not provide, like a strong military, good schools, generous medical care and a comfortable retirement, as Matt Miller, a McKinsey & Company consultant and former Clinton administration official, has pointed out.

To me, this pattern argues for making tax increases a big part of the deficit solution. Maybe taxes would eventually rise to 23 percent of G.D.P., rather than 19 percent, as under current policy. Spending could then be cut from the 26 percent it is scheduled to reach in 2035, yet still be high enough to afford the investments that lead to prosperity. After all, the Internet, the highway system and the biotechnology sector all began as government programs.

Conservatives counter that governments just as often allocate resources badly, and there is something to this. It’s the small-government case that Mr. Paul, Mr. Ryan and governors like Mitch Daniels of Indiana and Chris Christie of New Jersey are making.

Mr. Paul emphasizes wasteful military spending that lines the pockets of military contractors rather than protecting the country. A bipartisan task force of military experts has identified cuts that would eventually equal almost 1 percent of G.D.P.

On Social Security, Marco Rubio, the Republican Senate candidate in Florida, has suggested raising the eligibility age. Two other Republican Senate candidates, Sharron Angle of Nevada and Joe Miller of Alaska, have gone further, suggesting a phaseout of Social Security. In the long run, changes to Social Security could save even more money than military cuts.

But the biggest cause of looming deficits is Medicare. Mr. Daniels, a possible 2012 presidential candidate, recently told Newsweek that he favored Medicare cuts. Mr. Ryan has been willing to get specific. For everyone now under 55, he wants to turn Medicare into a voucher program that’s much less generous than the program is scheduled to be.

Mr. Ryan’s budget blueprint offers an especially pointed contrast with the pledge. The Ryan plan calls for holding taxes at around 19 percent of G.D.P. and suggests specific cuts to bring spending in line. The pledge calls for even lower taxes — while offering almost no detail on spending cuts.

Which seems more credible?

Unfortunately, elected Republicans have often backed away from their own fiscally conservative ideas when pushed. Mr. Ryan says he supports the pledge. Ms. Angle has reversed herself on Social Security. Mr. Daniels has said tax increases should be an option, but that will be a tough position to keep in a presidential campaign.

And I get it. Voters don’t like having their taxes raised or their benefits cut. I don’t like it, either.

But, remember, when politicians tell you that they are opposed to tax increases, Medicare cuts, Social Security cuts and military cuts, they’re really saying that they are in favor of crippling deficits.

E-mail: leonhardt@nytimes.com