“Ryan The Redistributionist”: More Income And Wealth For The Already Well Off
“Who is going to end up making all the money in the end if Obamacare continues to be in place?” Republican National Committee chairman Reince Priebus growled Monday on Sean Hannity’s Fox News show. “It’s going to be the big corporations, right? And who gets screwed? The middle class.”
The Republican Party makeover is breathtaking. Now, suddenly, instead of accusing Democrats of being “redistributionists,” the GOP is posing as defender of the middle class against corporate America — and it’s doing so by proposing to do away with the most progressive piece of legislation in well over a decade.
Paul Ryan’s new budget purportedly gets about 40 percent of its $4.6 trillion in spending cuts over ten years by repealing Obamacare, but Ryan’s budget document doesn’t mention that such a repeal would also lower taxes on corporations and the wealthy that foot Obamacare’s bill.
According to an analysis by the non-partisan Tax Foundation, Obamacare redistributes income from the wealthy to the middle class. This is mainly because it hikes Medicare taxes on the top 2 percent (singles earning more than $200,000 and couples earning more than $250,000, including their investment income).
This year, for example, families in the top 1 percent will be paying about $52,000 more in Medicare taxes, on average, than they paid in 2012.
And where will the money go? Not to pay for the healthcare of poor families; most of them already receive Medicaid. The rich will be helping middle and lower-middle class Americans.
Obamacare also imposes some taxes and fees on insurance companies, drug makers, and manufacturers of medical devices. Here again, most of this will be borne by affluent Americans, who own most shares of stock (assuming the taxes and fees come out of corporate profits). And, again, beneficiaries are in the middle and lower-middle class.
In other words, Mr. Priebus has it exactly backwards. If Obamacare were repealed, who would end up making all the money? Big corporations and the wealthy. Who would get screwed? The middle class.
The rest of Ryan’s budget plan also runs counter to the new Republican thematic. Not only does it turn Medicare into vouchers (“premium support” in Republican-speak) whose value can’t possibly keep up with rising healthcare costs but it also dramatically reduces spending on education, infrastructure, and much else the middle class depends on.
Meanwhile, it redistributes upward, cutting the top tax rate for individuals down to 25 percent — a bigger tax cut for the top than even Mitt Romney proposed — and the corporate tax rate down to 25 percent, from 35 percent today.
Ryan would pay for these tax cuts by “closing tax loopholes,” but — where did we hear this before? — his budget doesn’t say which loopholes, or even hint at what it would do with rates on capital gains and dividends. Like Romney’s plan, it leaves all the heavy lifting to Congress.
The reality, of course, is that the only possible way Ryan could pay for his proposed tax cuts for the wealthy and corporations would be to raise taxes on the middle class.
Don’t expect the Chairman of the Republican National Committee, or other Republicans reading from the same talking points, to admit any of this.
But if you look at what they’re proposing rather than what they’re saying, the GOP isn’t really interested in balancing the budget at all. It’s out to redistribute income and wealth — to the best-off Americans, from everyone else.
If any party is into redistribution, it’s the Republicans. And Paul Ryan is leading the charge.
By: Robert Reich, The Robert Reich Blog, March 12, 2013
“From Tragedy To Farce”: Paul Ryan’s Obamacare “Repeal” Fails The Laugh Test And The Cry Test
Paul Ryan releases his budget plan today and the rollout and coverage of the document and its author represent a test for both Ryan and the media. I’m speaking specifically of its provisions regarding repealing Obamacare—or more precisely “repealing” Obamacare.
The test for Ryan is the extent to which his reputation as a straight-shooting budget wonk survived the ill-fated Romney campaign. Longtime Ryan observers know that that standing was more contrivance than reality (he cast a string of budget-busting votes during the Bush years before finding his inner fiscal warrior when a Democrat was in the White House, and his budgets have been less intellectually honest than advertised), but its durability showed it to be impervious to reality.
So the question now is whether that disconnect will endure? Because even before it’s fully unveiled Ryan’s budget fails both the laugh test and the cry test—both, as I said, regarding its treatment of the Affordable Care Act, more popularly known as Obamacare.
The laugh test regards the fundamental premise that Ryan’s budget anticipates the law’s repeal. Agree or disagree with the idea of repealing the law, you have to admit that it’s about as likely as Mitt Romney signing any bills into law any time soon.
National Journal‘s Jill Lawrence wrote an article yesterday looking at the political logistics of repeal, and they’re daunting, to put it mildly.
For the health-care law to be repealed before 2017, you’d have to believe that either Obama would, lamb-like, accept repeal of his signature domestic accomplishment, or that Republicans in 2014 would somehow win veto-proof two-thirds majorities in the House (290 votes if all 435 representatives are present, 58 more seats than the GOP held as of mid-March) and the Senate (67 votes, which would require a net gain of 22 seats).
For repeal to be feasible in 2017, a Republican would have to win the White House in 2016; Republicans would need to hold their House majority, and Republicans would need a filibuster-proof 60 seats in the Senate (15 more than they have now).
That latter scenario, Lawrence notes, also doesn’t take into account the day to day reality of the law in 2017—the practical problems of unwinding a system that will have become entrenched as people use it to get health coverage and so forth.
“The continuing assumption that Obamacare will be repealed, even with Obama reinstalled in the White House, is just one more factor that makes Ryan’s budget more wishful than credible,” Lawrence concludes. That’s putting it politely. The fact is that if we’re to take Ryan and his budget seriously, it should be grounded in reality, not in the wishful thinking of the right wing.
But Ryan’s Obamacare repeal also fails the cry test for being so intellectually dishonest as to make a noncynical citizen weep. You see Ryan’s repeal of Obamacare isn’t actually a full repeal of Obamacare. As the Washington Post‘s Ezra Klein points out, “Ryan’s version of repeal means getting rid of all the parts that spend money to give people health insurance but keeping the tax increases and the Medicare cuts that pays for that health insurance.” So the $716 billion which Obamacare cut from Medicare and which Ryan and running mate Mitt Romney campaigned so hard against last year? Those cuts are in Ryan’s budget … just like they were in his previous budgets. He was, as TPM’s Sahil Kapur points out, against those cuts before he was for them before he was against them before he was for them. Or something.
As the Washington Post‘s Jonathan Bernstein notes, “This is no garden-variety flip-flop. It’s a fundamental decision to govern one way and campaign the exact opposite way.” It’s breathtaking, really.
And the governance/campaigning dichotomy is the more striking for the results of the campaign. You would think that after losing a race that the GOP insisted was a grand philosophical showdown, Republicans would attempt some sort of course correction other than reverting to their we say we hate it, but we’re happy to use it stance on Medicare cuts. Voters disapprove of both the party and its policies, and Ryan’s response is more of the same. To paraphrase his least favorite philosopher, his budgets seem to repeat themselves, first as tragedy, then as farce.
The question remains whether Ryan will be called on it in news reporting or whether he will reclaim his reputation as honest-green-eye-shade guy. Stay tuned.
By: Robert Schlesinger, U. S. News and World Report, March 12, 2013
“Grounded In Even Less Reality”: Paul Ryan’s Make-Believe Budget
If Rep. Paul Ryan wants people to take his budget manifestos seriously, he should be honest about his ambition: not so much to make the federal government fiscally sustainable as to make it smaller.
You will recall that the Ryan Budget was a big Republican selling point in last year’s election. Most famously, Ryan proposed turning Medicare into a voucher program. He offered the usual GOP recipe of tax cuts — to be offset by closing certain loopholes, which he would not specify — along with drastic reductions in non-defense “discretionary” spending.
If the plan Ryan offered had been enacted, the federal budget would not come into balance until 2040. For some reason, Republicans forgot to mention this detail in their stump speeches and campaign ads.
Voters were supposed to believe that Ryan was an apostle of fiscal rectitude. But his real aim wasn’t to balance the budget. It was to starve the federal government of revenue. Big government, in his worldview, is inherently bad — never mind that we live in an awfully big country.
Ryan and Mitt Romney offered their vision, President Obama offered his, and Americans made their choice. Rather emphatically.
Now Ryan, as chairman of the House Budget Committee, is coming back with an ostensibly new and improved version of the framework that voters rejected in November. Judging by the preview he offered Sunday, the new plan is even less grounded in reality than was the old one.
Voters might not have focused on the fact that Ryan’s original plan wouldn’t have produced a balanced budget until today’s high school students reached middle age, but the true deficit hawks in the House Republican caucus certainly noticed. They demanded a budget that reached balance much sooner. Hence Ryan’s revised plan, which claims to accomplish this feat of equilibrium within a decade.
It will, in fact, do nothing of the sort, because it appears to depend on at least one ridiculous assumption and two glaring contradictions. That’s for starters; I’m confident we’ll see more absurdities when the full proposal is released soon.
Appearing on “Fox News Sunday,” Ryan said his plan assumes that the far-reaching reforms known as Obamacare will be repealed. Host Chris Wallace reacted with open disbelief: “That’s not going to happen.”
Indeed, to take Ryan seriously is to believe that legislation repealing the landmark Affordable Care Act would be approved by the Senate, with its Democratic majority, and signed by Obama. What are the odds? That’s a clown question, bro.
As he did in the campaign, Ryan attacked Obama’s health reforms for cutting about $700 billion from Medicare over a decade, not by slashing benefits but by reducing payments to providers. Ryan neglected to mention that his own budget — the one he convinced the party to run on in 2012 — would cut Medicare by the same amount. Actually, by a little more.
This was hypocrisy raised to high art. How could anyone who claimed to be so very worried about the crushing federal debt blithely renounce $700 billion in savings? Ryan suggested Sunday that once Obamacare is repealed, this money can be plowed back into Medicare. Which, as you recall, will never happen.
While Ryan’s new budget assumes that Obamacare goes away, it also assumes that the tax increase on high earners approved in the “fiscal cliff” deal remains in place. “That’s current law,” he said, as if Obamacare were not.
Ryan’s sudden respect for a tax increase that had to be — metaphorically — crammed down Republicans’ throats is easily explained. He needs the $600 billion in revenue it produces to make his new fantasyland budget appear to reach balance.
Ryan is likely to reprise — and even augment — the hundreds of billions of dollars in cuts he proposed last year for social programs. He indicated that he still believes Medicare should be voucherized, although he objects to the word and insists that what he advocates is “premium support.” And he asserted that Obamacare’s expansion of Medicaid, the health-care program for the poor, is “reckless” — even as tea party-approved Republican governors such as Rick Scott of Florida announce their states’ participation.
From the evidence, Ryan cares less about deficits or tax rates than about finding some way to dramatically reduce the size of the federal government. He has every right to hold that view. But it’s hard to take him seriously as long as he refuses to come clean about his intentions.
By: Eugene Robinson, Opinion Writer, The Washington Post, March 11, 2013
“Ideology Over Sound Policy”: Republican Governors No Longer A Force For Moderation
Republican governors, who actually have to govern, used to be a moderating force on the most extreme aspects of Republican ideology. No longer. In major areas such as health care, taxes, and jobless benefits, ideology is trumping sound policy judgment in many gubernatorial mansions and state legislatures.
Healthcare
Antipathy toward “Obamacare,” not reasoned analysis, seems to be why many governors have expressed hesitation, if not outright opposition, to the Medicaid expansions under the Affordable Care Act, even though the federal government would pick up almost all of the costs. A similar antipathy (and probably a hope before the Supreme Court decision and 2012 election that the law would go away) led many governors to pass on the chance to use the flexibility that the it afforded them to design their own health insurance exchanges—new competitive marketplaces in which individuals and small businesses can choose among an array of affordable, comprehensive health insurance plans that the Affordable Care Act requires.
I’ve previously explained why Medicaid expansion is a good deal for the states. But as the map below from the Center on Budget and Policy Priorities’ report on the healthcare law’s Medicaid expansions shows, many states remain undecided or are leaning against expansion:
The Center’s report on the state health insurance exchange implementation shows that 26 states, including most of the states leaning against Medicaid expansion, have declined to either operate a state-based exchange or partner with the Department of Health and Human Services in designing their exchange. Under the law, that means they default to a “Federally facilitated exchange” that HHS will establish.
Taxes
In another disturbing development, numerous states are considering—or have already enacted—sweeping tax and budget proposals that follow recommendations of the American Legislative Exchange Council, also known as ALEC. As this CBPP report explains, ALEC’s recommendations for deep tax cuts and limits on revenues and spending reflect extreme “supply side” and antitax arguments that mainstream economic research discredited long ago.
CBPP’s most recent assessment finds that at least five states (Kansas, Louisiana, Nebraska, and both North and South Carolina) are considering eliminating income taxes. At least 11 others (Idaho, Indiana, Missouri, Montana, New Mexico, North Dakota, Ohio, Oklahoma, Pennsylvania, Texas, and Wisconsin) are considering deep tax cuts. And at least three states (Arizona, Arkansas, and Kansas) are considering harsh revenue limits.
Unemployment Insurance
Unemployment Insurance is a joint federal-state program in which states have traditionally offered up to 26 weeks of benefits to qualified workers who lose their jobs through no fault of their own, and the federal government typically provides additional weeks of emergency unemployment compensation when national unemployment is high. In the current jobs slump, by far the worst since the 1930s, seven states have cut back on the maximum number of weeks of regular benefits they offer. Because the maximum number of weeks of federal emergency benefits is proportional to the maximum number of weeks of state benefits, that means jobless workers in those states have seen a significant reduction in support while they look for work in what remains a tough labor market.
Research shows that Unemployment Insurance is valuable not only to unemployed workers and their families but also for the additional spending that it injects into the economy. States that have cut back on it are hurting struggling families and their own economic recovery.
The North Carolina Trifecta
North Carolina is the poster child for these disturbing trends in state governments.
The Tar Heel State is one of the five considering eliminating its income tax. The new Republican governor supports legislation that would prevent the state from expanding Medicaid or establishing a health insurance exchange. And, in July, the state will become the eighth to have reduced the maximum number of weeks of Unemployment Insurance it offers. Moreover, North Carolina also cut the maximum level of benefits which, under the “maintenance of effort” requirement for receiving emergency federal benefits, requires the federal government to cut off all emergency Unemployment Insurance to North Carolina.
Republican governors used to fight for Medicaid and Unemployment Insurance because they recognized how much their states benefited. Now, many are leading the effort to cut valuable programs in order to finance tax cuts for high-income households and businesses, while letting the chips fall where they may for those of more modest means.
By: Chad Stone, U. S. News and World Report, February 22, 2013
“It’s All Or Nothing”: The Obama Administration Plays Hardball On Medicaid
When the Supreme Court upheld the Affordable Care Act, it also gave Republican states a gift by saying they could opt out of what may be the ACA’s most important part, the dramatic expansion of Medicaid that will give insurance to millions of people who don’t now have it. While right now each state decides on eligibility rules—meaning that if you live in a state governed by Republicans, if you make enough to have a roof over your head and give your kids one or two meals a day, you’re probably considered too rich for Medicaid and are ineligible—starting in 2014 anyone at up to 133 percent of the federal poverty level will be eligible. That means an individual earning up to $14,856 or a family of four earning up to $30,657 could get Medicaid.
Republican governors and legislatures don’t like the Medicaid expansion, which is why nine states—South Dakota, plus the Southern states running from South Carolina through Texas—have said they’ll refuse to expand Medicaid (many other states have not yet said whether they’ll do it). But some states asked the Obama administration whether they could expand Medicaid a bit—maybe not cover everyone up to 133 percent like the law says, but add a few people to the rolls. And yesterday, the administration said no. It’s all or nothing: either you expand Medicaid up to 133 percent, or you get none of the new money. Was that the right thing to do? Well first, let’s talk about that money.
These Republican states offer worries about cost as their reason for rejecting the Medicaid expansion. But in truth, it’s an incredibly sweet deal for them. Right now, the federal government generally pays half of the cost of Medicaid, with the state picking up the other half. But the federal government will pay 100 percent of the cost of new Medicaid recipients signed up because of the expansion between 2014 and 2016. After that the federal contribution will step down to 90 percent by 2020, where it will stay forever more. So the state gets to insure a whole bunch of its citizens for nothing at first, and eventually for only 10 cents on the dollar. And in return they get reduced costs for uncompensated care, and a healthier, more productive citizenry with more money to spend. Some studies have projected that states will more than make up for their 10 percent contribution with health care savings they’ll get from an insured population; that’s likely to be particularly true among those states whose Medicaid eligibility standards are currently the stingiest, who not coincidentally have the highest rates of uninsured citizens (and, also not coincidentally, are precisely those states where the Republican leadership is refusing to accept the expansion).
And yet, the most conservative among them won’t take the deal. The federal government is saying to the states, Here is a bunch of free money for you to give health insurance to your uninsured poor citizens. And these states are saying, No way! Their justification of budget worries is so unpersuasive that it’s impossible to avoid the conclusion that they would rather see people have no insurance, and thus be poorer, sicker, and die sooner, than get Medicaid via Obamacare. It’s truly a moral abomination.
By playing a little bit of hardball and not letting states get away with a partial expansion, the administration is betting that before long the states will find all this free money to insure their citizens irresistible. And they may be right. That’s what happened when Medicaid was established in 1965; few states signed up at first, but before long they all did. Right now these governments are being pressured by some powerful interests to take the expansion, particularly the hospitals who have to deal with patients with no way to pay their bills. If they expanded Medicaid a little but not fully, that pressure wouldn’t be as intense and they could claim they expanded coverage. This way they won’t be able to hide behind a partial expansion and claim they did the right thing. Let’s hope the administration is right, because millions of Americans’ futures depend on it.
By: Paul Waldman, Contributing Editor, The American Prospect, December 11, 2012
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