House Budget Committee Chairman Paul Ryan has released a merciless analysis of President Obama’s latest deficit speech, or what Ryan calls “Obama’s third ‘budget’ in seven months.” The report reads:
Even if tax revenue as a share of the economy were to grow in excess of its historical average, tax increases simply cannot match the spending commitments of the federal government in the years ahead. Based on Congressional Budget Office (CBO) projections of their likely policy trajectory, government spending is on pace to double within a generation, and eclipse 75 percent of the entire economy later this century (see Figure 1). As the Washington Examiner’s Philip Klein observed: “No amount of rhetoric by [President] Obama is going to change the numbers.”[3] In other words: “It’s math.”
Elsewhere in the report, Ryan shows that health care spending is the main driver of our deficits and that Obamacare only made the situation much, much worse:
Despite being sold as a serious attempt to tackle the problem of health inflation, the President’s health care law was anything but. Its primary focus was on expanding coverage via government subsidies, instead of making coverage more affordable with reforms that promote competition and choice. With its maze of mandates, dictates, controls, tax hikes and new entitlements, the flawed new law will push costs even further in the wrong direction.
The Ryan report doesn’t say so, but its hard to see how any “grand bargain” can be struck on the debt before Obamacare is repealed.
