“Ryan’s America”: Here’s How Much It Would Hurt To Be Poor Under Paul Ryan’s Budget
There are many different ways to talk about Paul Ryan’s Roadmap, but maybe the most useful is to imagine how his budget affects your budget.
How much more money would you keep under his broad tax plan? How much more would you have to save to pay for health care?
And for the low-income, whom—as we’ll see—bear the brunt of Ryan’s cuts: How alone would they be in Ryan’s America?
But let’s start with a bit of basic arithmetic.
There are two ways that the government’s budget can affect yours. Clearly, one is taxes. More than 80 percent of government revenues comes from individuals’ wages and income. (The rest comes from corporate taxes and things like excise taxes on gasoline, which also affects our budgets, but less directly.)
Two is spending. Although most of us might think of government as providing public goods like airports and security, $3 out of every $5 Washington spends is basically insurance—a transfer to those who are old, sick, and poor. Social Security writes checks equal to 20% of government outlays. Medicare, Medicaid and CHIP account for another 20%. Safety net programs and benefits for veterans and federal retirees account for another 20%.
So, a full accounting of how Ryan’s budget would affect your budget must consider how much he would cut our taxes and how much he would cut our transfers.
TAXES. Ryan cuts income tax rates and abolishes investment taxes to reduce government revenues by about $450 billion* per year over the next ten years. (That’s after he makes permanent the Bush/Obama tax cuts.)
We don’t know exactly how Ryan’s tax cuts would break down by family income level, but the Tax Policy Center has published an estimate based on the Ryan-inspired budget passed by the House of Representatives this year. The upshot is that the federal income tax code—the one highly-progressive part of our tax system—would become significantly less progressive. Taxes would barely change (or even rise) on the low-income Americans, and the top 1% would see a windfall from the elimination of taxes on most of their investment income.
“Those making $1 million or more would enjoy an average tax cut of $265,000 and see their after-tax income increase by 12.5 percent,” TPC found. “By contrast, half of those making between $20,000 and $30,000 would get no tax cut at all.”**
SPENDING. Ryan is most famous for his Medicare plan, but if his budget became law at midnight tomorrow, the most dramatic changes over the next ten years would be everything but Medicare. That’s because Ryan’s long-term plan to move Medicare from a defined-benefit fee-for-service system (where government is your insurance) to a defined-contribution system (where government writes you a check to help you pay somebody else for insurance) is truly a long-term plan. It wouldn’t begin to take effect until the early 2020s. The typical family might prepare for a more modest Medicare by putting more money away. They might leave more of their salaries in a savings account. They might invest in the stock market, with the understanding that any gains wouldn’t be taxed. They might use their modest income gains to buy a house, with the intention to sell at a tax-free gain later.
Ryan slashes deeply, but he spares defense and Social Security, which, together, account for 40% of the budget. That means his $4 trillion in cuts come mostly out of health care spending, income security spending, and basic government duties. By 2023, Ryan would spend 16 percent less than Obama on income security programs like unemployment benefits and food stamps. He would spend a quarter less on transportation, and 13 percent less per veteran, according to Brad Plumer.
Medicaid spending would be shaved by about a third, and the Urban Institute calculated that a similar proposal would force the states to drop between 14 million and 27 million people from Medicaid by 2021 (note: that’s an extreme prediction). It’s not clear exactly what programs would be cut, or by exactly how much. What is clear is that everything within the bundle of government responsibility—from subsidizing science research to subsidizing education to keeping up national parks and law enforcement—would come under pressure for cuts to make room for the massive and regressive cuts to taxes.
What does that budget mean for your budget? It rather depends where you fall on the income ladder. Romney is relieving the richest Americans from some of their duties to pay for the risk-protection of the poor, and he is asking some of the poorest Americans to accept less help from the government in exchange for … well, the virtue of independence from government. It is stark, but broadly accurate, to say that the less you benefit from Ryan’s tax cuts, the more you would potentially suffer from Ryan spending cuts. It is possible—and, in Ryan’s vision, duly hope for—that devolving responsibilities from the federal government to the states and the private sector will drive efficiencies. But, as the GOP likes to point out about the president, “hope is not a policy,” and it is definitely not an inevitability.
Remember when Romney said he’s “not concerned about the very poor” because there’s a safety net for them? Well, there wouldn’t be the same safety net after Ryan’s plan took root. Romney doesn’t have to embrace every detail of Ryan’s plan, and he won’t. But he has embraced the philosophy of Ryan’s vision: That true freedom means freedom from government dependency, and that the poor are somehow richer, in spirit or in literalness, if they take less money from the government. Ryan believes that his budget could unlock spectacular growth and increase lower-income wages. And it might! But most of what we know about the impact of technology, emerging markets, and off-shoring suggests that gaping income inequality is a side-effect of global capitalism more than an outcome of progressive government.
This budget would have a very predictable outcome: It would make poor families poorer, and more exposed to the risks of medical or financial calamity, all under the banner of “Responsibility And Freedom.” Ryan is free to march under his banner. But don’t ask me to call it responsible.
By: Derek Thompson, The Atlantic, August 14, 2012
“What Women Don’t Want”: Paul Ryan’s Budget Deals A Body Blow To Women’s Bottom Line
You’d have to live under a rock to miss the news on Saturday morning that Mitt Romney has picked Congressman Paul Ryan to be his running mate. The announcement immediately kicked up a flurry of speculation: what does Ryan bring to the ticket that Romney wants? One thing he does not bring: women’s votes. Mitt Romney has been dogged by a problem with female voters, lagging in their support far behind President Obama, particularly among single women. But where Romney has been vague and flip-floppish on many issues, Ryan has long been very clear about his staunch support for policies that will hurt women economically.
Most people know Paul Ryan for his budget plans. There’s plenty of pain to be found in his budget for the lower and middle class, but women in particular make out poorly (literally) if his budget gets a presidential signature. Add in other policies he’s proposed or supported, and the picture becomes even bleaker. Here’s why:
1. Medicaid is crucial to women’s health. It provides coverage to nearly 19 million low-income women, meaning that they make up 70 percent of the program’s beneficiaries. Any slashing of Medicaid’s rolls will therefore fall heavily on their shoulders.
And Paul Ryan’s policies would do just that. Ryan’s budget slashes Medicaid by more than twenty percent over the next ten years and turns it into a block grant to states, letting them spend the money as they wish – as opposed to the current form in which states have to follow certain rules in how the money is spent. The Urban Institute estimated that the block grant plan alone would lead states to drop between 14 and 27 million people from Medicaid by 2021.
On top of that, Ryan’s budget repeals the Affordable Care Act, and with it the Medicaid expansion that some states are already threatening to refuse. Without that expansion, 17 million people will be left without Medicaid coverage. Women will again be hurt by this outcome: 13.5 million were expected to get health insurance coverage under the expansion by 2016. A Ryan budget would ensure they stay unprotected.
2. Social Security is another crucial safety net program that women disproportionately rely on. It is virtually the only source of income for about a third of female beneficiaries over 65. (Compare that to less than a quarter of men.) Without it, half of those women would live in poverty.
Ryan’s budgets haven’t called for specific cuts to the program, although his first version favorably cited the cuts proposed by the Simpson-Bowles report. But before he was known for chart-filled budgets, he put his name to a plan to partially privatize Social Security by having workers divert about half of their Social Security payroll-tax contribution to a private retirement account. Remember how well 401(k)s fared during the recent financial crisis when stocks took a nosedive? That could happen again – and the women who rely on Social Security benefits could be left without anything to fall back on.
3. One more big social safety net program that women rely on: Medicare. The majority of Medicare beneficiaries are women, and twice as many women over age 65 live in poverty as compared to men.
Ryan’s budget plan would raise the eligibility age for Medicare to sixty-seven while repealing the ACA, leaving those between ages sixty-five and sixty-seven with neither Medicare nor access to health insurance exchanges or subsidies to help them buy coverage. That will leave low-income people with nowhere to turn except the pricey private insurance market at an age when health care is crucially important. Come 2023 his plan would also replace Medicare’s guarantee of health coverage with payments to the elderly to buy coverage from private companies or traditional Medicare. The problem is that the payments would increase so slowly that spending on the average sixty-seven-year-old by 2050 could be reduced by as much as forty percent as compared to now. That’s not going to go very far toward getting the elderly health coverage.
4. There are other huge pieces of the social safety net that women rely on that Ryan would unravel if given the chance. Beyond all the above cuts, his budget plan would spend about sixteen percent less than President Obama’s budget on programs for the poor. This includes slashing SNAP, or food stamps, by $133.5 billion, more than seventeen percent all told, over the next decade.
According to the National Women’s Law Center, women were over sixty percent of adult SNAP recipients and over sixty-five percent of elderly recipients in 2010. Plus over half of all households that rely on SNAP benefits were headed by a single adult – and over ninety percent of them were women.
5. His budget would also cut TANF, the program that replaced welfare, and Supplemental Security Income by $463 billion. Nearly nine in ten adult beneficiaries of TANF were women in 2009 – over eighty-five percent.
6. Given that his budget plan gets over 60 percent of the $5.3 trillion in nondefense budget cuts from support for low-income Americans, there are a host of other programs women rely on that would see huge cuts. Child care assistance, Head Start, job training and housing and energy assistance would likely see a $291 billion cut. Cuts to childcare and Head Start will disproportionately impact working mothers. But other programs also greatly benefit women. Take housing support. The Housing Choice Voucher program provides families with rental assistance, and over 80 percent of households receiving that support are headed by women.
7. There are plenty of other ways that Ryan’s ultra conservative views could impact women financially beyond his severe budget and policy proposals. His views on contraception are from another century. He’s against the ACA’s mandate that religious employers provide insurance coverage for birth control. He’s also opposed to federally funded family planning services. He voted to deny birth control coverage to federal employees in 1999 and has voted at least four times to defund Planned Parenthood, a key provider of contraceptives, particularly for low-income women. He also supports the “personhood” movement, which writes bills defining conception as the beginning of life that would likely outlaw some forms of birth control.
This is not just a social issue. This is an economic issue for millions of women. Research has shown a clear link between women’s ability to control their fertility thanks to contraception and increased female employment. In 1950, 18 million women were in the workforce. Since then, the pill has become widely available and widely used, and that number has tripled to 66 million. Ryan threatens to set us back by at least half a century and make it that much harder for women to get into the workforce.
8. On top of this, he’s no supporter of equal pay for equal work, voting against the Lilly Ledbetter Act, which gives women more time to file lawsuits when they believe they’ve been discriminated against by an employer. The gender wage gap means that the typical woman loses $431,000 over a forty-year career as compared to her male peers.
On Feministing, Vanessa Valenti points out that there are plenty of other ways that Paul Ryan’s policies are a nightmare for the country’s women – from opposing Roe v. Wade to voting against marriage equality to being terrible on immigration issues. One thing is for sure: if Romney’s new running mate is voted in as second in command and his ideas guide the next administration, women can expect a lot of economic pain.
By: Bryce Covert, The Nation, August 13, 2012
“Another Republican Insult”: Paul Ryan’s Dangerous Obsession With Ayn Rand
Honestly, grown men who swear by Ayn Rand might be locked up inside the house—and not the House of Representatives, Paul Ryan. I mean back home in Janesville, Wis., where your new stature as presumptive GOP nominee Mitt Romney’s running mate has raised a hullabaloo all the way up to Baraboo. The venerable Alan Greenspan should be put under honorary house arrest, too, for his lifelong disciple-like embrace of Rand’s ideas, which has cost the country more dearly than we shall ever know.
As chairman of the Federal Reserve during four presidencies, Greenspan displayed a laissez-faire ferocious faith in the free marketplace. This caused him to completely ignore signs of the economy going soft and awry on his watch. Remember when the dot com bubble burst?
The late Rand’s entrance into this presidential election, thanks to Wisconsin Rep. Paul Ryan, is more serious than it seems. Sweet reason has a hard time with Rand glorifying selfishness as political doctrine. Now that “selfishness ethic” happens all the time, accompanied by vicious attacks on the federal government and people who work for it, in the Republican-run House. It’s not all the author’s fault, but Ryan’s devotion to Rand is yet another Republican insult and injury to classic American ideas of fairness, squareness, and civic-mindedness.
In fact, the Ryan-authored House Republican budget document, which cuts the heart out of our body politic, ripping social services and Medicare to shreds, is a pledge to the Rand coat of arms, standing against people who need a little help from other people. And in turn, Rand gives him a rationale for the intellectual poverty of his ideas.
I don’t know grown women mean enough to believe in Rand’s lunar-like worldview. Her “objectivism” is portrayed in glittering novels, including We The Living, Atlas Shrugged, and The Fountainhead. Then again, she was not much interested in reaching women. Let’s be real: In life and work, this woman cared about having men in her thrall. She succeeded beyond what you might expect of a nice girl from St. Petersburg, born in 1905.
Trouble was, she got stuck in the Russian Revolution upheaval at an impressionable age. Scarred by communist collective ideals and the violence of change, she created the uber-capitalist myth of the strong man standing alone years after emigrating to the United States as a young woman. She also worked as a screenwriter.
Some would say Rand actually devolved from Social Darwinism. As despicable as her influence is, Greenspan can say he was caught up in a vanguard of his younger days, when the Soviet Union set off waves of alarrm and opposition to Communism as practiced by the ruthlesss Joseph Stalin.
But Ryan, 42, has lived his life on the right side of the tracks in the serene peace of Janesville, so why is he so sharp-edged with our social contract? So far, his mark on the 2012 race is allowing Rand to skip down two generations, from the octogenarian Greenspan to himself. Rand died in 1982, but hey, she lives on in a real way to this day.
By: Jamie Stiehm, Washington Whispers, U. S. News and World Report, August 14, 2012
“Reverse Bain Pain For Mitt”: The Right Completes Its Hostile Takeover Of Romney
Romney-Ryan constitutes, very possibly, the best-looking ticket in American political history. Mitt Romney is so textbook handsome that he resembles a toy action-figure president. Paul Ryan’s youthful, chiseled face and piercing blue eyes are already making hearts flutter around the political world. And no doubt Romney’s bold choice for veep – which has made most people forget, for the moment, Bain Capital and his undisclosed tax returns– will give the Republican presumptive nominee some pop in the polls. For the moment.
But once the excitement surrounding Ryan subsides, the long, ideological slog of this presidential race will resume, and with greater force than before. The stakes will be, once again, about the stark conceptual choice that American voters now face. Romney’s selection of Ryan must be seen as part of a continuum of hard-line positions that the GOP candidate, under constant pressure from an often hostile right, has laid out on everything from immigration to health care to foreign policy.
And with his veep choice Romney is sending a message to the American electorate, more forthrightly than ever, that he won’t be moving to the middle after all. He seems to be affirming that he is just about as ideologically conservative and as captured by the GOP base as Obama has been painting him.
Judging from the Obama campaign’s line of attack since his speech before the American Society of Newspaper Editors last April, this is just what the president wanted: an election that turns, to a very great extent, on the radical nature of Ryan’s budget–not so much on the numbers it lays out but on the vision it represents. The plan embodies a fiercely pared-down, pre-New Deal (or at least pre-Eisenhower) concept of government that the Congressional Budget Office (which analyzed the plan at Ryan’s request) concluded would effectively eliminate, by 2050, funding for education, highways, veterans’ programs, foreign aid, medical and scientific research, national parks, food and water safety, and most programs for low-income families and individuals other than Medicaid, as well as partially privatize Medicare. Ryan’s tax proposal would also clearly deepen the already wide gulf in income.
Thus, this is an election that also turns on the still-lingering question: Who’s really in charge in the GOP? Is it Romney or the Orthodoxicrats of the tea party/Grover Norquist crowd? Bob Schieffer sought to tackle this question on Sunday in his 60 Minutes interview of the dynamic duo. “Some people are saying you are making it [the election] a referendum on Paul Ryan’s budget plan,” Schieffer asked Romney. Romney responded that “I have my budget plan, as you know, that I’ve put out. And that’s the budget plan that we’re going to run on.”
But in fact, there is no full-blown Romney budget plan, not anything that has the operational detail of the Ryan plan. And until there is, voters will no doubt be justified in assuming that Romney still endorses Ryan’s plan as he did last spring, when he called it “marvelous” — which, as Obama himself sardonically noted in his April speech, “is a word you don’t often hear when it comes to describing a budget.”
Well before the veep choice was announced, Obama had been linking Romney directly to Ryan in a strategy that appeared to emulate Bill Clinton’s successful 1996 takedown of Bob Dole, as I wrote in April. Just as Clinton successfully tied the center-right Kansas senator to the then-far-right Newt Gingrich, speaker of the House, and warned voters that “Dole-Gingrich” would cost them “large parts of their Social Security and Medicare,” Obama jumped on Romney’s seeming endorsement of Ryan’s budget last spring.
Recall the president’s April speech: “Instead of moderating their views even slightly, the Republicans running Congress right now have doubled down, and proposed a budget so far to the right it makes the Contract With America look like the New Deal,” Obama said to laughter. “In fact, that renowned liberal, Newt Gingrich, first called the original version of the budget ‘radical’ and said it would contribute to ‘right-wing social engineering.’ ”
For Clinton, the charges in ’96 stuck not least because Dole decided to run with a zealous supply-sider, former Rep. Jack Kemp.
Romney is as welded now to Ryan as Dole was to Kemp. Still, he does have one big factor in his favor that Dole didn’t: an economic crisis and record-high unemployment, all of which may give him and his vision of government the sort of validation that Dole lacked in a generally healthy economy.
Romney’s problem is that he has persistently failed to get himself over the 50 percent mark in national polls that he needs to win. He’ll have to capture at least some of the middle to do that, including the broad mass of white, middle-class voters who depend on Medicare and other government programs. It’s not clear that Paul Ryan, no matter how handsome and winning he may be as a personality, is the pick who’s going to do that for him.
By: Michael Hirsh, National Journal, August 13, 2012
“Simply A Number Decreed As Necessary”: Romney’s Budget Plan Requires Even Deeper Cuts Than Ryan’s
Rep. Paul Ryan (R-WI) will hit the campaign trail today in his first week as Mitt Romney’s running mate. Deservedly, much of the attention on Ryan so far has been regarding his radical budget, which hugely shifts taxation down the income scale and guts important government investments.
But Romney’s budget also includes substantial reductions to key federal investments and the social safety net, in order to cut taxes for the wealthy and maintain sky-high defense spending. In fact, as the Center on Budget and Policy Priorities noted, Romney’s budget would require even deeper cuts to spending that Ryan’s, in order to keep defense spending at an arbitrarily set percentage of the economy:
– Under the Ryan plan, core defense spending (the defense budget other than war costs and some relatively small items such as military family housing),[11] would total about $5.7 trillion over the ten-year period 2013-2022. The Romney plan would increase core defense spending to $7.9 trillion. The Ryan plan increases core defense funding modestly relative to the existing BCA caps, but core defense would nevertheless decline to 2.6 percent of GDP by 2022. In contrast, Governor Romney would increase core defense to 4 percent of GDP.
– The Ryan plan would cut entitlement and discretionary programs (outside of core defense and net interest) by $5.2 trillion over ten years.[12] The Romney proposal would cut this spending by between $7.0 trillion and $9.6 trillion, depending upon whether the budget is balanced. Thus, Governor Romney’s ten-year cuts would range from one-third deeper than those in the Ryan budget to almost twice as deep as the Ryan cuts.
These cuts would have severe consequences for individual programs, including potentially throwing 13 million people off of the food stamp program.
As Bloomberg News noted, Ryan’s tax plan involves giving slightly more away to the wealthy than does Romney’s, but Romney more than makes up for it with his budget’s gutting of programs that aid the middle-class and low-income Americans. And he does it in order to preserve a level of defense spending that has nothing to do with defense priorities, but is simply a number that Romney decreed is necessary.
By: Pat Garofalo, Think Progress, August 13, 2012
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