Define Radical: Pros and Cons of Ryan Plan

Rep. Paul Ryan's Path to Prosperity is a welcome change from the usual rhetoric emerging from Republicans and Democrats on the issue of budget reform. Unlike other ineffective proposals advocated by legislators and non-proposals not advocated by President Obama, Ryan's plan acknowledges the dangers of inaction on a budget that is spiraling out of control and proposes serious reforms to Medicare and Medicaid, two entitlement programs that are draining government coffers.

You might call it a "put-up-or-shut-up" plan, forcing opponents to show how they would deal with the nation's fiscal problems. Opponents instead have called the plan "radical," "irresponsible," and "extreme." Is it, really?

Ryan's plan is "radical" when evaluated using Washington math, where a reduction in spending growth is a cut, but is actually fairly moderate when using real-world math. Ryan proposes a budget that would increase spending from $3.6 trillion to $4.7 trillion from 2011 to 2021. This is a hefty increase in spending, though it's much smaller when inflation is factored in, and it's actually a reduction in spending when measured as a percentage of gross domestic product.

It won't balance the budget in the near term, but it places it on the right track toward balance and ultimately a reduction in the national debt. The plan "works" because it holds the line on spending increases as our economy and tax revenues grows, thereby restoring some level of balance to the federal budget. In fact, what's radical is the notion that spending increases can continue unabated without severe consequences for the United States.

Ryan's acknowledgement that entitlement reform is necessary for budget reform is far from embraced by everyone.

"Mr. Ryan and the Republicans are declaring war on entitlements - and war on the elderly and the poor...Beneficiaries will end up paying more," said Rep. Jan Schakowsky (D-IL).

Ryan proposes the introduction of competition into Medicare and a revamping of Medicaid, as these two programs, along with Social Security, will eat up an ever-increasing share of tax dollars if left alone. Really, what's radical is the idea that we shouldn't use economic incentives to spur innovation and cost reduction.

If Ryan's plan is not-so-radical in some ways, in others it's not radical enough. Ryan, like others before him, has called for the implementation of statutory spending caps to limit spending in the future. These caps are better than nothing, but anything short of a constitutional amendment will not prevent future Congresses and presidents from starting a new spending spree. Ryan also does not call for changes to Social Security, another entitlement program in need of serious reform. And his spending proposals in others areas, like defense, are weak.

Despite these concerns, Ryan's plan deserves a hearing. Even if it goes nowhere, it will serve as an educational tool for the public, which understands the dangers of the deficit, according to recent polls, but has yet to make the connection between the deficit and entitlement spending. If debate over Ryan's plan can help voters understand that it is not "radical", but a necessary step toward sustainable budgeting, public opinion may change enough to build support among election-minded legislators for reform. And that would be radical.