House Budget Chairman Paul Ryan unveiled the House Republicans’ proposed budget for FY 2013 today. You can read the budget document, titled “The Path to Prosperity,” here. We will have more to say about it in the days to come, but here are a few preliminary observations.
Ryan’s budget calls for a simpler, fairer income tax system, with lower rates and fewer deductions. Ryan proposes just two marginal rates, 10% and 25%. It also lowers the top corporate income tax rate to 25%.
Ryan’s budget document takes on the explosive issue of Obama’s cronyism head-on:
The Choice: Cronyism and Corporate Welfare vs. A Level Playing Field
In each major sector of the economy, the President and his party’s leaders have offered a vision at odds with the core principles of economic freedom. It is an obsolete vision that favors big, well-established or politically well‐connected corporations and unions at the expense of workers and small competitors. It is a vision that creates political inequality by favoring companies with the best connections over those with the best ideas. And it is a vision that inhibits growth by increasing the cost of complying with government regulations instead of leaving enterprises with more money and more freedom to hire workers and create jobs.
America’s leaders must offer a new vision for a new century – not by applying old tax-and-spend policies to whatever industrial fad is popular in Washington, but by freeing the small businessperson, the worker and the entrepreneur to keep writing the American success story.
Cronyism and Corporate Welfare
In energy, the President and his party’s leaders remain committed to a policy that blocks proven domestic energy sources while spending recklessly on uncompetitive alternatives.
In housing, the administration has failed to take action to account honestly for the liabilities of Fannie Mae and Freddie Mac, and it continues the bailout of these entities that has already cost taxpayers hundreds of billions.
In financial services, the President and his party’s leaders remain wedded to an approach that views the consolidation of big banks – and the empowerment of the same regulators who failed to see the last crisis coming – as “reform,” when it is actually an invitation to corruption and potentially greater financial collapse down the road.
And in health care, the administration continues to transform one-‐sixth of the U.S. economy into a government-directed industry, rife with bureaucratic favoritism and capricious rules that trample the liberties of individuals, families, churches, non-profits, and employers.
In addition to these interventions, the President and his party’s leaders continue to overstep government’s bounds by punishing businesses in order to reward the organized-labor groups that finance their campaigns. The actions of the National Labor Relations Board (NLRB) under this administration offer another good example of bureaucratic overreach and the decline of the rule of law. The most notorious case involves Boeing, which the NLRB sued over its decision to locate a new factory in South Carolina instead of union-‐friendly Washington State. The Board’s actions threatened hundreds of jobs. Eventually the NLRB dropped its lawsuit at the request of the politically connected union that had prompted the suit.
By picking winners and losers in the market, the government-as‐investor model distorts markets, subverts the rule of law, and fails to spur sustainable job creation. Instead of helping the economy, billions of taxpayers’ dollars are thrown away, successful companies are deprived of their competitive advantages, and workers lose their jobs.
This is the ugly end of government’s failed experiment with crony capitalism. Fortunately, there is a better way forward.
There is much more on the subject; read it all.
The Path to Prosperity includes a number of charts, some of which are highly effective. This one shows the exploding debt under the Democratic status quo, compared with the solution to the debt crisis that the Republican approach represents:
This one illustrates the fact that America’s finances are in almost as bad a condition as Greece’s and those of other troubled European countries:
And this one shows that the cause of the debt crisis is exploding spending, not insufficient tax revenues:
More to come.