For all the talk about how courageous Paul Ryan’s proposed budget is, the simple truth is not only is it not very good at delivering on its signature promise – that of balancing the budget, which Ryan concedes under his plan wouldn’t happen until 2040 – it would actually blow up the budget deficit to record highs. And while it is NOT balancing the budget, it would simultaneously gut virtually every program aimed at helping seniors and middle and lower middle class people, including Medicaid and Medicare, while taking not one dime out of the defense budget, and conveniently leaving Social Security alone. Yes, a profile in courage if ever I saw one.
Social Programs: Ryan proposes to strip $3 trillion (Okay $2.9 trillion) over the next decade out of valuable programs for the working poor. That’s about $290 billion per year for those of you with a calculator at home – the lion's share of the federal budget set aside to deal with this demographic. In short, the Ryan plan would virtually destroy the safety net that millions of people desperately need to stay afloat, and it does so unabashedly and unapologetically.
Tax Reform: I’ll be polite here and allow Ryan the benefit of the doubt that he truly believes his proposed budget represents tax reform. But the fact is that Ryan calls for reducing the tax brackets even further than they currently are. Additionally, he wants to reduce the corporate tax rates from 35% to 25% and make up the difference by eliminating loopholes. How he proposes to do this, however, is, shall we say, murky at best. How much will this tax “reform” cost? Roughly $3 trillion in lost revenue over the next ten years. So between the Bush tax cuts, which Ryan wants to make permanent, and the further tax reductions he proposes, the hit to the treasury comes in at around $7 trillion. Nice math, Paul.
Medicare and Medicaid: Ryan’s plan would require seniors to purchase their own private insurance, which the government would then subsidize them for in the form of a voucher. Yes, you heard right, voucher: that four-letter word that Republicans can’t seem to rid their vocabulary of. And if your premiums go up under the Ryan plan, tough luck. You're on your own. That’s what you get for getting old and relying on a fixed income. As for Medicaid recipients, the federal government would issue block grants to the states to pay for benefits. Block grants would give them the “flexibility” to administer the money as they see fit, and we all know how well that worked out the last time it was tried.
Healthcare: We’ve saved the best for last. The GOP’s fixation and obsession with repealing the healthcare law has taken on epic proportions. As expected, one of the key provisions of the Ryan plan would be to, you guessed it, overturn the Affordable Care Act. Ryan claims he will save $725 billion by repealing the subsidies that customers would have received to help buy health insurance. However, according to the CBO, which scored the healthcare law, a repeal would actually have the opposite effect by adding to the deficit. Curious how Ryan is so vehemently opposed to subsidizing the general population in the purchase of affordable healthcare, yet has no problem subsidizing seniors so they can purchase their own health insurance. Can you spell ideology?
So there you have it, in black and white. Captain Courageous and his brave new world, where Robin Hood steals from the poor and gives to the rich. It all makes perfect sense, just like tax cuts pay for themselves and only lazy people need government assistance. If only us socialist hordes would know our place and allow the true leaders of our nation to work their magic, just like they did in the ‘80s under Reagan and the 2000s under Bush.
Tomorrow President Obama will address the nation on the debt. Once more he has an opportunity to frame a debate and distinguish himself and his party from the Republicans. It is too late to reverse previous stances where the narrative was unfortunately framed. Like it or not Obama has tied his own hands and must concede the importance of deficit reduction, even though virtually every prominent economist has insisted that slashing spending now would hurt the fragile recovery we are witnessing.
But Obama can and must insist that any reduction in spending be met with a responsible increase in revenue. Allowing this fairytale to continue that Washington only has a spending problem will ultimately result in disaster for the country. The last time the nation had a balanced budget was when the top marginal tax rates were at 39.6%. That was eleven years ago, and the economy did just fine. The rich didn’t flee and corporate America enjoyed its best and most prosperous period since the 1950s.
If Republicans – particularly Tea Party Republicans – are so eager to return to the good old days of prosperity and fiscal responsibility, I say we give them what they want.