Sudden End to Credibility of Ryan’s Budget Plan
A true agenda to reform the welfare state would require a sweeping, income-based eligibility test, which would reduce or eliminate social insurance benefits for millions of affluent retirees. Without it, there is no math that can avoid giant tax increases or vast new borrowing. Yet the supposedly courageous Ryan plan would not cut one dime over the next decade from the $1.3 trillion-per-year cost of Social Security and Medicare.
Instead, it shreds the measly means-tested safety net for the vulnerable: the roughly $100 billion per year for food stamps and cash assistance for needy families and the $300 billion budget for Medicaid, the health insurance program for the poor and disabled. Shifting more Medicaid costs to the states will be mere make-believe if federal financing is drastically cut. …NYT
It’s a big put-down, and it comes from the conservatives’ most credible budget guy: David Stockman. Stockman was, of course, the famous director of Reagan’s Office of Management and Budget.
In the Ryan plan, there is no effort to deal with “too big to fail” and no call for a return to Glass Steagall.
Stockman tears Paul Ryan’s pretensions into shreds. “Thirty years of Republican apostasy — a once grand party’s embrace of the welfare state, the warfare state and the Wall Street-coddling bailout state — have crippled the engines of capitalism and buried us in debt,” Stockman writes in an editorial. “Mr. Ryan’s sonorous campaign rhetoric about shrinking Big Government and giving tax cuts to ‘job creators’ (read: the top 2 percent) will do nothing to reverse the nation’s economic decline and arrest its fiscal collapse.”
… Hacking away at the roughly $400 billion domestic discretionary budget (what’s left of the federal budget after defense, Social Security, health and safety-net spending and interest on the national debt) will yield only a rounding error’s worth of savings after popular programs (which Republicans heartily favor) like cancer research, national parks, veterans’ benefits, farm aid, highway subsidies, education grants and small-business loans are accommodated.
Like his new boss, Mr. Ryan has no serious plan to create jobs. America has some of the highest labor costs in the world, and saddles workers and businesses with $1 trillion per year in job-destroying payroll taxes. We need a national sales tax — a consumption tax, like the dreaded but efficient value-added tax — but Mr. Romney and Mr. Ryan don’t have the gumption to support it.
The Ryan Plan boils down to a fetish for cutting the top marginal income-tax rate for “job creators” — i.e. the superwealthy — to 25 percent and paying for it with an as-yet-undisclosed plan to broaden the tax base. Of the $1 trillion in so-called tax expenditures that the plan would attack, the vast majority would come from slashing popular tax breaks for employer-provided health insurance, mortgage interest, 401(k) accounts, state and local taxes, charitable giving and the like, not to mention low rates on capital gains and dividends. The crony capitalists of K Street already own more than enough Republican votes to stop that train before it leaves the station. ...NYT
Stockman started going after Ryan last year when he told Tim Dickinson in an interview: “Ryan takes out the ax and goes after the very small part of the budget that’s either discretionary spending or means-tested programs for the poor – which is the last thing you ought to cut, not the first thing. That just doesn’t make any sense. It can’t work. And it simply exacerbates class warfare within the fiscal debate.”
Republicans are worried about the attention to Ryan’s budget plan.
Republicans strategists are worried that Rep. Paul Ryan’s (R-Wis.) addition to the presidential ticket will cost their party House and Senate seats this fall.
Their concern: Democrats will successfully demonize Ryan’s budget plan, which contains controversial spending cuts and changes to Medicare.
“There are a lot races that are close to the line we’re not going to win now because they’re going to battle out who’s going to kill grandma first, ObamaCare or Paul Ryan’s budget,” said one Republican strategist who works on congressional races. “It could put the Senate out of reach. In the House it puts a bunch of races in play that would have otherwise been safe. … It remains to be seen how much damage this causes, but my first blush is this is not good.” …The Hill
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