Representative Paul Ryan of Wisconsin has made a name for himself with his budget proposal, the so-called “Ryan Budget,” which passed the House along Party lines. The budget is a pretty drastic cut in spending and taxes, which has no chance of ever actually being put into practice, but which has drawn praise from conservatives, including Republican presidential candidate Mitt Romney.
I would concur that we need a drastic change in Washington budgeting, but I would like to see a real plan. Even if you were to go along with the philosophy of the Ryan Budget, which cuts aid to lower income people and cuts taxes for the wealthy, you wouldn’t be able to see how this plan will work, because there is so much left unexplained.
The Ryan Budget acknowledges the numerous “spending programs” that exist in the tax code in the form of deductions, exclusions, and preferences, or what they call “tax expenditures.” Obviously it’s a gimmick, because even though getting rid of these deductions is essentially raising taxes on some people, they can’t call it that because they would be violating their pledge not to raise taxes.
But before you feel sorry for the millionaires that might lose deductions, take solace in the fact that these deductions would be eliminated in order to lower rates, so no wealthy people will be paying higher taxes. The problem is that while the lower rates are specified in detail, the tax exemptions and deductions that would be eliminated are not. In order to reach the rate levels called for, it appears almost all the “tax expenditures” would have to be eliminated—from mortgage interest to medical expenses, and college tuition to charitable contributions.
Since none of these are specified, the plan can’t be attacked based on any of these ideas. But how can our leaders even vote on a plan that doesn’t say what exactly is in it? Just another example of what incompetent jerks we have inWashington. It’s simple, guys—let’s see a real plan, with real numbers, and vote on it. Why all the mystery?
There are some things in the plan that are very clear. Those are cuts to aid for the poor. The Ryan Budget requires 85 percent of the households that are living below the poverty line to lose food assistance. It cuts $133.5 billion from the Supplemental Nutrition Assistance Program over the next 10 years. It also cuts free preventative care currently provided by Medicare for the elderly. They would go back to having to pay out-of-pocket for prescriptions that fall within the so-called “donut hole.” Medicaid would get cut by $810 billion over the next decade. It cuts health care from an estimated 33 to 48 million for lower income Americans and seniors.
However, some groups will be exempt from making any sacrifices. Large corporations and the wealthiest Americans will get huge tax breaks. Millionaires would, on average, receive $265,000 in new tax cuts, and that’s on top of the $129,000 they would receive from the extension of the Bush tax cuts. Wall Street firms and the oil companies would keep, and in fact, get expanded tax breaks. Ryan calls this plan the “Path to Prosperity.” Trickle down economics, anyone?
Senator Jon Kyl fromArizonacounters this criticism by saying that statistics show the rich are paying enough, and it’s the poor that are paying too little. “How about the less wealthy?” he asked. “The bottom 95 percent, in other words, everybody but the top 5 percent, pays 41.3 percent of income taxes, earns 65 percent of the money, of the income. Is this fair? People who do not share in the sacrifice of paying taxes have little direct incentive to care whether the government is spending and taxing too much.”
It’s this kind of thinking that caused the American Catholic Bishops group to send a series of letters saying the budget plan fails to meet certain “moral criteria” by disproportionately cutting programs that “serve poor and vulnerable people.” The letter criticized cuts in the Ryan budget to food stamps and other assistance programs for the poor. It urged lawmakers to reject “unacceptable cuts to hunger and nutrition” programs for “moral and human reasons,” and said spending cuts should instead be made to subsidy programs that “disproportionately go to large growers and agribusiness.”
The Ryan plan also deeply cuts entitlement programs like Medicaid, which helps the elderly partly by paying for a major portion of nursing home costs. Where does he expect these people to go if they can no longer afford to be in a nursing home?
Regardless of whether the cuts come from the poor or the rich, basic freshmen economics teaches that governments should spend when there is a recession, and cut back when times are good. So it flies in the face of standard economic theory to make massive cuts when we’re in the midst of a bad economic downturn. We blew it by spending excessively when times were good, so we don’t have much room for deficit spending now, but making such drastic cuts, according to economic theory, will force us into a deeper recession or even a depression.
It may sound good when Paul Ryan says this budget is the “Path to Prosperity,” and it undoubtedly would be for the wealthiest among us, but in every other aspect it appears to be the wrong medicine at the wrong time. It’s a phony plan, without key ingredients revealed, that may just turn our fragile, recovering economy into a depression. Although it appeals in some sense to my affinity for smaller government, it is a recipe for disaster. I believe even Paul Ryan knows it, and he’s using it as a political ploy rather than a serious strategy for the future of our country. At least that’s my hope. If he really believes what he says, it doesn’t say much for us for electing him to a position of power!