The moment we have been anticipating has finally arrived. House Budget Committee Chairman has released his budget for FY 2012, along with his blueprint for tax and entitlement reform over the next decade. This budget proposal, which would cut $5.8 trillion from the CBO baseline over the next decade, is a mature and well balanced plan emanating from a city full of fatuous demagoguery.
It is important to note that this is just the preliminary proposal of the very first step of the congressional budget process; the Concurrent Budget Resolution. There will be ample time to sort through all of the components of this plan and provide the appropriate changes as needed. Nonetheless, it is a laudable first step that has come to fruition through the assiduous work of Paul Ryan and his Republican colleagues on the Budget Committee. It is a fresh breath of moderation and seriousness amidst the extremism that is so endemic in Washington among the Democrats. Here is a cursory breakdown of some of the major provisions of the Ryan plan, categorized by the excellent, the good, and the need for improvement.
The Excellent
- Medicaid: The budget proposes a transformational change to Medicaid by converting it to a block grant program which would give states more flexibility in how to spend their Medicaid dollars. There would also be an overall cap placed on the block grants. This would encourage states to innovate and formulate the best ideas for reducing dependency, instead of exacerbating it through an open ended entitlement program. The plan would trim the cost of Medicaid by $771 billion from the CBO baseline over the next decade.
- Corporate Welfare/Ethanol/Farm Subsidies: Ryan's proposal repeals the odious ethanol subsidies lock, stock and barrel. It also reforms farm subsidies by trimming farm/corporate welfare from its current level of $25 billion. This is especially prescient given the record high food prices that have been spurred in part by these market-distorting subsidies. To address the record high energy prices, the proposal calls for an end to tax cuts for the rich- no more green subsidies!
- Obamacare: It defunds Obamacare lock, stock and barrel. While much of the budget is driven by choices between several evils in order to reform existing Democrat entitlement programs, this proposal prevents ObamaCare from becoming another Medicare/Medicaid disaster.
- Taxes: The proposal reduces the highest corporate and personal income tax rates to 25%.
- Earmarks: The ban on earmarks is made permanent.
- Freddie Mac and Fannie Mae: The budget plan cancels these economic destructive government entities and calls for their privatization. The resolution also calls for an end to corporate bailouts that were enshrined in the Dodd-Frank financial takeover bill.
- Pell Grants: All of the exorbitant increases in Pell Grants that were a part of the stimulus bill would be defunded. This will help slow rising tuition inflation that has been generated as a result of these interventionist programs.


