Editorial: GOP budget doesn?t deserve its likely fate

The House Republican budget unveiled this week is billed as a "New Path to Prosperity." More likely, it will be an election- eering strategy for taking control of the White House and Senate.

Despite its many worthy elements, this budget won't advance past the Democratic-controlled Senate. Its principal author, Republican Rep. Paul Ryan, knows that. But Mr. Ryan hopes the essentially dead-on-arrival spending plan with its dramatic tax and spending cuts will set the tone for future negotiations. No doubt Republicans also will embrace it as a campaign platform as they struggle to unite behind a candidate to oppose President Barack Obama.

House Budget Chairman Rep. Paul Ryan (R-WI) (L) and members of the House Budget Committee introduce the House FY2013 budget at a news conference at the Capitol on March 20, 2012 in Washington, D.C.

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It's a pity the likely best use of this document is political fodder. It has much to recommend it. The Republican budget would trim spending to $1.028 trillion, somewhat less than the $1.047 trillion agreed to last August after much Democratic and Republican wrangling.

The budget's most promising aspect is how it would reduce the current six brackets of marginal income tax rates to only two ? 15 percent and 25 percent. Taxpayers now are distributed across a spectrum that ranges from 10 percent to 35 percent.

It is not immediately clear at what income level the higher of the proposed new brackets would kick in, but consolidation from six to two is movement in the right direction. Reportedly, the plan also would eliminate many tax breaks, which means some of the benefit of lower rates would be offset by loss of credits and deductions.

This, too, is good, on the whole. The tax code has been used since its inception to reward politically favored behavior with credits and deductions, while punishing other taxpayers by denying them similar breaks. To the degree Republicans could ratchet back this onerous practice, the nation would benefit. Nevertheless, we still prefer a flat tax along the lines proposed by Republican presidential candidates Ron Paul and Newt Gingrich.

The budget also would cut corporate tax rates to 25 percent from the present 35 percent, and essentially allow U.S. companies to pay taxes overseas at the rates of the nations in which they operate, generally alleviating them from a second tax bite on profits they bring home. Democrats don't like this idea, arguing with some merit that when companies can pay lower taxes overseas it lures American businesses away. Rather than complain, Democrats should agree to lower U.S. business tax rates to give domestic companies more reason to do business here.

Repealing President Obama's health plan and eventually eliminating Fannie Mae and Freddie Mac are other laudatory aspects of the Republican budget. So, too, is its proposal to convert Medicaid and the Supplemental Nutritional Assistance Program (food stamps) into block-grant programs. Medicaid growth under this budget would be lowered by $810 billion over 10 years, reversing decades of increasing costs.

Again, we lament that this budget will serve largely only as a basis for campaign rhetoric. The nation has been without an adopted budget for almost 1,100 days. Congress continues to avoid tough decisions, even as the national debt tops $15 trillion.

Congress should adopt reforms such as those in Mr. Ryan's budget, including its proposal to eliminate the Alternative Minimum Tax, originally passed so wealthy taxpayers enjoying tax breaks paid at least some tax. But because the AMT was not indexed for inflation, growing numbers of middle-class taxpayers have fallen into its clutches. That's but one of countless reasons reforms are needed. Mr. Ryan's budget is a good starting point for that debate, even if only in campaign slogans, for the present.

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