Governor Romney’s selection of Congressman Paul Ryan as his running mate elevates the budget as a focal point for this fall’s presidential election. Would the budget proposed by Mr. Ryan significantly reduce the deficit?
The answer is “yes”. Analysis by the nonpartisan Congressional Budget Office shows that the Ryan budget would reduce the deficit from an estimated $1.2 trillion or 8% of GDP this year to less than $500 billion or about 2% of GDP in ten years, with a small surplus by 2040. Starting in 2022, the plan slows the growth of health care costs by offering people turning 65 to buy private insurance instead of receiving Medicare allowances. Spending aside from health care, social security, and interest would be cut from 12% of GDP to 6% over the next ten years.
All a tall order, but deficit reduction is critical. More broadly, the November election will present a fundamental choice for Americans. Are they finally ready to face the budget reality that has been chasing them for years? It will be up to us to decide.