Ryan to Geithner - Why propose a budget you admit is not credible, not sustainable?
From today's House Ways and Means Committee hearing of President Obama's FY2011 Budget.
Congressman Paul Ryan: I brought up page 146 in your budget which is your S-1 budget totals ((http://www.whitehouse.gov/omb/budget/fy2011/assets/budget.pdf). When you take a look at this, I just find this amazing. Youve got budget totals here, which by your own admission, from your own Budget Director, and youre a smart guy, youve got smart economists over there, all of them say, that for the medium and long-run budget deficits have to get below 3% of GDP, yet this budget plan that youre bringing to us doesnt even get close to it.
Treasury Secretary Tim Geithner: Youre exactly right.
Ryan: Since I have three minutes, you have this warning under here. Its like a warning on a cigarette pack. You have this little magic box underneath your budget totals that says: were going to have a commission do it. Were going to have this partisan commission, with a 2 to 1 ratio of Democrats and Republicans, that will give us a report after the election.
Geithner: Its not a 2 to 1 ratio, thats not fair. And let me say it slightly differently, were going to solve our part of the mess we inherited. We inherited a structural deficit and to bring that down, were going to have to work together.
Ryan: Why dont you solve this problem in your Budget? You run the government, if you are going to solve our fiscal situation, why dont you do that? Why dont you give us a budget that actually gets our deficits to sustainable levels?
Let me read a quote from OMB Director Peter Orszag in the Wall Street Journal: The unusual situation that the government finds itself in with other countries willing to finance U.S. debt at low rates wont last. He added, when it flips, the question is: how do you get ahead of that to avoid the downward spiral of rising interest rates, plunging dollar, a sinking economy.
Geithner: I think its a good quote, too. I agree with that.
Ryan: The vigilantes in the bond market are going to get us and the American people are going to get hurt. And so, why arent you giving us a budget - not punting to a commission - why arent you giving us a budget that using your own standards and definitions actually is sustainable?
Geithner: Congressman, we are proposing a budget that takes the huge mess we inherited and cuts that deficit dramatically.
Ryan: You can blame Bush only so long. You obviously inherited a tough situation, but you are making it worse by your own admission.