But this budget is as notable for what it cuts as for what it doesn't cut. Social Security, defense, and Medicare -- together making up about half of the federal budget -- would scarcely be cut at all. After all, it's hard to win a Republican election if you abandon old voters and the defense industry.Anyone who has been following the budget debates of the last two years would recognize that there is only one place where a long-run deficitreducing "Grand Bargain" can be found: Social Security. Obama has supported the idea of using chained-CPI to reduce benefits and shore up the program's long term fiscal position. Whatever the merits of this proposal (I don't really like it), this is where the Grand Bargain is. Obama's in favor of it, he seems to think he can get some congressional Democrats on board, and conservatives have been yelling about reforming entitlements for years. Additionally, unlike Medicare-voucherization, this isn't a qualitative change to the program, it is basically a reduction in benefits that can be sold to the public as a wonky fix. As a result, we don't need to argue about whether or not it will save us money or how it will affect medical costs--our actuarial predictions will likely be pretty spot-on. If what you care about is reducing the government's long term fiscal obligations, chained-CPI is what you want to be talking about in this political environment.
That is why it's kind of crazy that Ryan doesn't include it (or any other social security reform) in his plan. I think this is pretty revealing. Besides wanting the (non-elderly) poor and middle class to shoulder the burden of deficit reduction, Ryan doesn't actually care about putting forward a plan that has any realistic chance of passing.
For what its worth, Paul Ryan's budget is a pretty honest statement of Republican political priorities. It should be read as a manifesto on government, not a real budget proposal.
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