Ryan Budget Plan: Pink Slime Economics “Flavored With Sulfuric Acid”
The big bad event of last week was, of course, the Supreme Court hearing on health reform. In the course of that hearing it became clear that several of the justices, and possibly a majority, are political creatures pure and simple, willing to embrace any argument, no matter how absurd, that serves the interests of Team Republican.
But we should not allow events in the court to completely overshadow another, almost equally disturbing spectacle. For on Thursday Republicans in the House of Representatives passed what was surely the most fraudulent budget in American history.
And when I say fraudulent, I mean just that. The trouble with the budget devised by Paul Ryan, the chairman of the House Budget Committee, isn’t just its almost inconceivably cruel priorities, the way it slashes taxes for corporations and the rich while drastically cutting food and medical aid to the needy. Even aside from all that, the Ryan budget purports to reduce the deficit — but the alleged deficit reduction depends on the completely unsupported assertion that trillions of dollars in revenue can be found by closing tax loopholes.
And we’re talking about a lot of loophole-closing. As Howard Gleckman of the nonpartisan Tax Policy Center points out, to make his numbers work Mr. Ryan would, by 2022, have to close enough loopholes to yield an extra $700 billion in revenue every year. That’s a lot of money, even in an economy as big as ours. So which specific loopholes has Mr. Ryan, who issued a 98-page manifesto on behalf of his budget, said he would close?
None. Not one. He has, however, categorically ruled out any move to close the major loophole that benefits the rich, namely the ultra-low tax rates on income from capital. (That’s the loophole that lets Mitt Romney pay only 14 percent of his income in taxes, a lower tax rate than that faced by many middle-class families.)
So what are we to make of this proposal? Mr. Gleckman calls it a “mystery meat budget,” but he’s being unfair to mystery meat. The truth is that the filler modern food manufacturers add to their products may be disgusting — think pink slime — but it nonetheless has nutritional value. Mr. Ryan’s empty promises don’t. You should think of those promises, instead, as a kind of throwback to the 19th century, when unregulated corporations bulked out their bread with plaster of paris and flavored their beer with sulfuric acid.
Come to think of it, that’s precisely the policy era Mr. Ryan and his colleagues are trying to bring back.
So the Ryan budget is a fraud; Mr. Ryan talks loudly about the evils of debt and deficits, but his plan would actually make the deficit bigger even as it inflicted huge pain in the name of deficit reduction. But is his budget really the most fraudulent in American history? Yes, it is.
To be sure, we’ve had irresponsible and/or deceptive budgets in the past. Ronald Reagan’s budgets relied on voodoo, on the claim that cutting taxes on the rich would somehow lead to an explosion of economic growth. George W. Bush’s budget officials liked to play bait and switch, low-balling the cost of tax cuts by pretending that they were only temporary, then demanding that they be made permanent. But has any major political figure ever premised his entire fiscal platform not just on totally implausible spending projections but on claims that he has a secret plan to raise trillions of dollars in revenue, a plan that he refuses to share with the public?
What’s going on here? The answer, presumably, is that this is what happens when extremists gain complete control of a party’s discourse: all the rules get thrown out the window. Indeed, the hard right’s grip on the G.O.P. is now so strong that the party is sticking with Mr. Ryan even though it’s paying a significant political price for his assault on Medicare.
Now, the House Republican budget isn’t about to become law as long as President Obama is sitting in the White House. But it has been endorsed by Mr. Romney. And even if Mr. Obama is reelected, the fraudulence of this budget has important implications for future political negotiations.
Bear in mind that the Obama administration spent much of 2011 trying to negotiate a so-called Grand Bargain with Republicans, a bipartisan plan for deficit reduction over the long term. Those negotiations ended up breaking down, and a minor journalistic industry has emerged as reporters try to figure out how the breakdown occurred and who was responsible.
But what we learn from the latest Republican budget is that the whole pursuit of a Grand Bargain was a waste of time and political capital. For a lasting budget deal can only work if both parties can be counted on to be both responsible and honest — and House Republicans have just demonstrated, as clearly as anyone could wish, that they are neither.
By: Paul Krugman, Op Ed Columnist, The New York Times, April 1, 2012
“Unintentionally Revealing”: Paul Ryan’s Path To Nowhere
“Why don’t you balance the budget at 24 percent [of GDP] instead of 19 percent?” I asked.
“I think it would do damage to the economy,” Rep. Paul Ryan replied.
This simple exchange from a conversation I had with Ryan in his office last October captures the uber-debate the country needs to have. That is, once we get done dissecting the deceptions, hypocrisies and regressive priorities in the Wisconsin Republican’s latest blueprint.
For starters, Ryan’s assumption that higher levels of spending and taxation would automatically hurt the economy can’t be right. If it were, America would be a poorer country today than it was a hundred years ago, when the federal government taxed and spent less than 5 percent of gross domestic product. But we’re obviously vastly wealthier. That doesn’t mean there isn’t a limit beyond which higher taxes and spending would hurt. Just that we’re not close to that point. How can we be, when President Reagan ran government at 22 percent of GDP?
Federal spending has gone from recent norms of about 20 percent of GDP to 24 percent under President Obama, thanks to the lagging economy and spending on things like the stimulus and unemployment insurance. Ryan wants to get it back to 20 percent in the next few years and return taxes to their more recent norms of 19 percent, up from today’s recession-depleted 15 percent. (The nonpartisan Tax Policy Center said Tuesday that Ryan’s proposals would in fact fall dramatically short of 19 percent, but leave that aside for the moment.)
At first blush, Ryan’s plan sounds perfectly reasonable — until you remember that we’re about to retire 76 million baby boomers.
“I think the historic size [of government as a share of GDP] is about right, or smaller,” Ryan told me that day.
“But how can that be,” I asked, “when we’re doubling the number of seniors” on Social Security and Medicare, the biggest federal programs.
“Because we can’t keep doing everything for everybody in this country,” he said. “We should trim down a lot of other stuff we’re doing.”
This was unintentionally revealing. Ryan has sounded this theme before. “We are at a moment,” Ryan said in his State of the Union response in 2011, “where if government’s growth is left unchecked and unchallenged . . . we will transform our social safety net into a hammock, which lulls able-bodied people into lives of complacency and dependency.”
But what hammock is Ryan talking about? The only thing slated to grow the size of government in the years ahead is the retirement of the baby boomers. The doubling of the number of people eligible for Social Security and Medicare is what is driving all the increase in federal spending — along with the spiral in system-wide health costs, which afflicts Medicare along with all privately financed health care.
If those programs for seniors haven’t been a “hammock” until now, simply doubling the number of people eligible for them can’t turn them into a “hammock” tomorrow. When it comes to fiscal policy, we have an aging population challenge, and a health-cost challenge. We don’t have a “hammock” challenge.
The upshot? Ryan wants to use an aging America and the bogus but superficially appealing constraint of “historic levels of spending and taxation” to force massive reductions in the rest of government. That’s why the Center on Budget and Policy Priorities and others Tuesday were already calculating that Ryan’s new plan would basically zero out everything in government a few decades from now, save for Social Security, Medicare and defense.
The crucial thing to understand about Ryan is that he is not a fiscal conservative. He’s a small-government conservative. These are very different things. The fastest-growing federal program in Ryan’s new budget is interest on the debt, which nearly triples from $234 billion next year to $614 billion in 2022. He doesn’t even pretend to balance the budget until 2040, and then only under utterly dubious assumptions.
These are not the choices a fiscal conservative makes. A fiscal conservative pays for the government he wants. Ryan wants government smaller than the one Reagan led even as America ages, and he doesn’t want to pay for it. Instead he adds trillions in new debt and makes no bones about it.
“Why would you choose to have debt, as opposed to saying we’re going to pay our own way now” via higher taxes, I asked Ryan back in October. This even after spending cuts that most Republicans think won’t command public support. “Why is that a conservative value?”
“Because of growth,” he said. “What I don’t want to do is sacrifice an entire generation to having less than optimal potential growth because their parents didn’t fix this problem.”
Huh? A cynic would say Ryan would do anything to avoid acknowledging the need for higher taxes as the boomers age. The conservative darling just won’t go there. The less charitable assumption is that the congressman is confused.
There’s more to say on Ryan’s blueprint, and, in spite of my general hostility to his thinking, he deserves credit for putting his party’s head in the noose by calling (rightly, if imperfectly) for Medicare reform. But the first order of business is to expose Ryan’s overall plan for the misguided, misleading and unacceptable vision it represents.
By: Matt Miller, Opinion Writer, The Washington Post, March 21, 2012
“This Really Isn’t Complicated”: Mitt Romney Should Read Paul Ryan’s Budget Plan
Mitt Romney’s allergy to honesty has come into sharper focus this week, but even by his standards, the comments Romney made on a Wisconsin radio show this morning were astounding.
Romney said the plan introduced by House Budget Committee chairman Ryan (R-Janesville) “does not balance the budget on the backs of the poor and the elderly … It instead preserves Medicare and preserves Social Security.”
Look, this really isn’t complicated. Paul Ryan’s budget plan is simply brutal towards the poor and working families. Romney doesn’t have to like it, but he really shouldn’t lie about it.
Center on Budget and Policy Priorities
House Budget Committee Chairman Paul Ryan’s budget plan would get at least 62 percent of its $5.3 trillion in nondefense budget cuts over ten years (relative to a continuation of current policies) from programs that serve people of limited means. This stands a core principle of President Obama’s fiscal commission on its head and violates basic principles of fairness.
While giving a massive tax break to the wealthy, the Ryan budget plan Romney is so fond of slashes funding for Medicaid, food stamps, and other for low-income programs, nearly all of which Ryan’s plan would eliminate over the next couple of decades.
As the CBPP’s Robert Greenstein put it, “[T]he Ryan budget would impose extraordinary cuts in programs that serve as a lifeline for our nation’s poorest and most vulnerable citizens, and over time would cause tens of millions of Americans to lose their health insurance or become underinsured.” He added that Ryan’s plan “would cast tens of millions of less fortunate Americans into the ranks of the uninsured, take food from poor children, make it harder for low-income students to get a college degree, and squeeze funding for research, education, and infrastructure.”
If this doesn’t “balance the budget on the backs of the poor,” for crying out loud, what exactly would such a budget plan look like?
As for “preserving” Medicare, the Ryan plan that Romney supports would turn Medicare into a voucher program, scrapping the guaranteed benefit altogether; weaken Medicare solvency; and bring back the Medicare Part D prescription drug “donut-hole.”
So, what are we to make of Romney’s comments this morning? He’s either lying or he hasn’t read the budget plan he’s endorsed. It’s one or the other.
By: Steve Benen, The Maddow Blog, March 23, 2012
“Attack Of The Right”: Ryan Budget A Disappointment To Conservatives
The conservative group Club for Growth said Wednesday that a Republican House budget plan authored by Rep. Paul Ryan (Wis.) is a “disappointment” to fiscal conservatives that falls short of making necessary cuts to balance the nation’s budget.
The group’s president said in a statement that Ryan’s plan does not put the country on a path to chop deficits quickly enough.
Chris Chocola also complained that that the budget largely waives massive cuts that are set to go into effect in January as a consequence for the failure of Congress’s special deficit reduction “supercommittee.”
According to the Budget Control Act — the hard-fought law that raised the nation’s debt ceiling over the summer — failure of the supercommittee was to trigger about $1.2 trillion in cuts over the next decade, split between military and domestic spending.
In Ryan’s budget, the so-called sequester–deeply unpopular to Republicans because of its powerful hit to defense–would be replaced. Tackling only the first year of the cuts—about $110 billion—his budget calls for instructing Congressional committees to come up with $18 billion in trims the first year and $116 billion over five years.
“It is hard to have confidence that our long-term fiscal challenges will be met responsibly when the same Congress that passed the Budget Control Act wants to ignore it less than one year later. On balance, the Ryan Budget is a disappointment for fiscal conservatives,” Chocola said in a statement.
Ryan’s budget also seeks to eliminate deficits by 2040. The Club for Growth has called for a budget that balances within the decade. Chocola said the budget contains “several important reforms and pro-growth policies” but is not enough.
“The Club for Growth urges Republicans to support a budget that balances in the near future and complies with the Budget Control Act,” he said.
The attack from the right comes as Ryan is facing a far more vigorous outcry from Democrats—who believe this plan slashes programs for the poor and elderly even while cutting taxes for the wealthy.
They have also complained that the Ryan plan slices agency budgets by $18 billion more than a year-long cap agreed to in the debt deal—a key concession made to conservatives whom Ryan will need to get his budget plan through the House.
With Democrats unified against Ryan’s plan, the Club for Growth statement could pose problems for its passage in the House if it persuades the GOP’s restive caucus to waver in its support.
Some centrist Republicans are also anxious about Ryan’s plan—fearful it will set the House on a path to another nasty clash with the Senate just weeks before the November election.
By: Rosalind S. Helderman, The Washington Post, March 21, 2012
“The Collapse Of Civilization”: GOP Releases Plan To Save America From The Poor
The House Republicans unveiled their new budget today, complete with a spooky video pressing home the point that only the House Republicans and their leader Paul Ryan stand between us and CIVILIZATIONAL COLLAPSE. Yes, the peril of rising debt is that bad. No, it’s not so bad that it’s worth restoring Clinton-era tax rates to prevent. But so bad that it’s worth throwing tens of millions of people off health insurance? Oh, yeah.
The first place to begin with the House budget is taxes. The plan is to slash tax rates, with the top rate dropping to 25 percent. The budget asserts that it will make up for most of the lost revenue by eliminating tax deductions, but it does not say which ones. This would require them to produce about $6 trillion worth of tax deductions. It would also ensure that, if they succeeded, taxes on the rich would fall, a lot, and taxes on many non-rich people would rise. This probably explains why they are not providing any details, which also explains why this promise would be tricky to fulfill. In any case, the upshot is that they have delineated $6 trillion worth of deficit-expansion, offset by unspecified promises to make it up.
On the spending side, things get somewhat more specific. Medicare would be partially privatized. The basic functions of government, like:
Over the next decade, Ryan would spend 30 percent less than the White House on “income security” programs for the poor — that’s everything from food stamps to housing assistance to the earned-income tax credit. (Ryan’s budget would spend $4.8 trillion over this timeframe; the White House’s would spend $6.8 trillion.) Compared with Obama, Ryan would spend 38 percent less on transportation and 24 percent less on veterans. He’d cut “General science, space, and basic technology” by 20 percent. And, compared with the White House, he’d slash “Education, training, employment, and social services” by a full 44 percent.
Do House Republicans really think the federal government is vastly overinvesting in things like roads and scientific research, or is this merely a gimmick to make their tax cuts appear affordable? It is hard to say.
They do genuinely seem to believe that the federal government spends way too much on the poor and sick, and move to correct that. Poor people, or people who have a family member with a serious medical condition, come in for special abuse here. The Republican budget would repeal the Affordable Care Act, which provides health insurance coverage to 30 million people, and replace it with nothing. On top of that, it would absolutely slash Medicaid and the childrens’ health insurance plan, eliminating coverage from 14-27 million more people (the wide variation reflects the fact that the outcome heavily depends on how states respond to the huge cuts, and the elimination of rules that force states to cover poor people.)
All in all, we have a standard mix of specific benefits for the rich, specific pain for the poor, and a lot of vague promises that would entail pain for the middle class, without committing themselves in a way that could hurt politically.
By: Jonathan Chait, Daily Intel, March 20, 2012
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