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Do Cuts in Ryan’s Budget Proposal Go Far Enough?

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    Manhattan Institute Senior Fellow Diana Furchtgott-Roth on the budget negotiations.

  • Duration 5:45
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House Budget Committee chairman Paul Ryan unveiling his budget proposal today aiming to balance the budget in ten years without tax hikes but.

Does the Ryan budget actually make president Obama's increase in the size and scope of government permanent.

Joining us now is Diana first -- -- Manhattan institute senior fellow and former US Department of Labor chief.

Economist great to see again that is so you know Democrats.

Don't like the Ryan budget because they say it cuts too much but in point of fact it doesn't cut.

It just cuts the rate of increase and -- handing the editor of real clear markets wrote about this he said it's laughable that Ryan's ten year.

41 trillion dollar budget will return government quote to its proper limits -- focus.

-- merely talking about reductions in planned increases in federal spending so is Ryan's budget just kind of accepting.

This 20% increase in the size of the budget that we've seen since President Obama came in off.

Well Ryan's budget does have to -- from well we are right now and what it does is increases it it increases spending at a 3.5.

Percent rate every year instead of -- 5% rate.

If it would need I would cut fumble if it will Paul Ryan he would probably cut fumble but the problem is that this budget has to get through congress.

And it's very difficult to get any kinds of cuts if Paul Ryan manages to get his budget through congress and to have the cops that he's laid out.

It will be -- very -- it'll be historic so yes.

It increases the size of government that it increases it less that it would be otherwise and in Washington it's unfortunate it's a very difficult to cut now budget.

It's are all pie in the sky what what is real is -- spending that we can that the Treasury Department has to come are the actual amount that is spent and what we look at that.

From 2008.

Up until president we see this huge increase of course the first year 2009.

Was a result of the stimulus but then that level just stayed there -- that 20% increase in the federal budget.

Represents into the new concept of government which is a 20% increase by President Obama.

If President Reagan actually decrease the -- -- of domestic spending why doesn't the Ryan budget try to do the same.

Probably because -- doesn't think it's politically -- -- up politically possible to get that through the Democrat controlled senate.

One reason is entitlements have become so high what we need to do is ratchet them down so they've become a safety net instead of the middle class entitlement.

Look at unemployment insurance you so that's the 26 weeks now it's up to around it was 99 weeks it's about 75.

Same same with food stamps.

Middle class Americans not qualify for food stamps they didn't used to before -- cat.

Again much highest spending.

And Paul Ryan has tried to decrease these amounts does a lot -- -- that you could do.

For example the twelve billion dollars we spend on energy programs every yet.

That makes our electricity more expensive to write about Windmills -- twelve billion.

Role we will do so the Windmills solar biomass through fifty billion on high speed rail that's plant when only 2% of Americans ride high speed -- there's.

Now sample frankly we don't have time for all those examples that I that most of our viewers know that government wastes a lot of money but.

I'm just wondering if the Ryan plan gives a little room to some more libertarian views -- say -- Rand Paul might we see a new budget.

Come out with somebody really believes in cutting like Rand Paul.

What we're gonna see is a budget from the Republican Study Committee.

That generally has smaller government spending lower government spending than the House Budget Committee last year it did until this year it will also.

In -- probably come out you know next week they do things like eliminate the Corporation for Public Broadcasting the Legal Services Corp.

But if Paul Ryan can get his budget -- congress it will be historic it will make a dent in the output -- expecting let's.

It just friends for a last question I wanna get into the real economy let's start to stop talking about the economy inside the beltway are.

We have so we now see a business community in America tighter and more -- than it's ever been in my lifetime ever.

In my lifetime -- all of the the cost cutting that's -- unfortunate a lot of the jobs that were eliminated were part of that but are you surprised.

That with a slow economy.

And with a tight business force.

The the market is just booming today another record high was a small one but it was another record.

It's booming because of the federal or is which is just pumping out money into the economy two weeks -- -- Diana let me.

-- a lot of it all right let me just -- Back a little bit on that because as I said businesses have tighten their belts tremendously over the past four years and they are now -- as can be dozens.

Does a lot of the credit of what's happening the market.

Go to the businesses themselves.

Well some of it goes some of it does go to the businesses that holding a lot offshore about one point seven trillion the question is why GDP growth is still so slow and unemployment still so high given the stock market and adding that -- because of the federal -- also because of these.

Large amounts of money that multinationals -- holding -- shall.

We need corporate tax reform.

To bring that back into the United States because -- corporate tax rate of 35%.

Is way about the OECD average of 24%.

And we tax companies on -- -- -- -- rather than just domestic income that needs to change so that some of these corporate profits come back into the united name let's hope we have.

Please get that Diana first got Roth great -- -- united thank you for coming in appreciate -- so.

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