The House of Representatives on Thursday approved House Budget Committee Chairman Paul Ryan’s proposed $3.5 trillion budget resolution on a 228 to 191 vote, largely along party lines.
If Ryan (R-WI) has his way with his proposed budget resolution, Medicare will be privatized and Medicaid, food stamps and many other federal entitlement programs will be eliminated. The cuts under Ryan’s budget proposal, if implemented, would drastically increase income inequality and poverty.
Ezra Klein of the Washington Post sums up Ryan’s budget plan in one sentence:
Ryan’s budget funds trillions of dollars in tax cuts, defense spending and deficit reduction by cutting deeply into health-care programs and income supports for the poor.
Ryan’s budget resolution is part of a bipartisan campaign to slash spending on social programs. All Democrats, however, voted against the resolution, while offering their own proposals that called for somewhat less drastic cuts in spending and token tax increases on the wealthy. All but ten of the Republican majority in the House backed the resolution and those ten wanted even bigger cuts.
Several other budget resolutions were proposed and voted on, but none passed because few Republicans would vote for a resolution calling for tax increases on the wealthy, and few Democrats wanted to publicly support sizeable cuts in Medicare and Social Security in a bill that was certain to be defeated. Not a single resolution was offered that called for increasing spending to meet social needs, despite a fifth year of economic downturn and severe unemployment.
Last year, Ryan offered the first-ever proposal for the complete abolition of Medicare. It passed the House but not the Senate. His resolution this year is even more drastic and reactionary. The major spending cuts are focused on programs for the poor and the lower-paid sections of the working class.
In negotiations with House Republicans last August, the White House agreed to significant cuts in discretionary spending for the 2012 and 2013 fiscal years in return for an increase in the federal debt ceiling. The Ryan budget resolution reneges on that agreement by failing to adhere to the spending levels set in that deal.
While Democrats accepted the budget cuts endorsed by Obama last year, Republicans refused to do so, which raises the possibility of a new legislative deadlock over the adoption of appropriations bills for fiscal year 2013. That could lead to a partial shutdown of the federal government October 1, just prior to the presidential and congressional elections.
According to a study by the nonpartisan Center on Budget and Policy Priorities (CBPP), Ryan’s proposal calls for $5.3 trillion in spending cuts over the next decade. 62 percent of the $5.3 trillion in spending cuts come from “programs that serve people of limited means.” Many low-income working families would actually see an increase in their tax burdens under the Ryan plan.
The Ryan plan would also raise the age of eligibility for Medicare from 65 to 67, and end Medicare as a federal entitlement for all those now younger than 55. Anyone who turns 65 after 2023 would be relegated to buying private health insurance with a government grant that would be capped, shifting costs to the individual.
Another CBPP analysis found the budget provides for $800 billion in cuts for Medicaid, $1.6 trillion from repealing the expansion of Medicaid and subsidies for low- and moderate-income people, $134 billion in cuts from food stamps, and $463 billion from other programs for low-income individuals and families, including an estimated $166 billion from Pell Grants for low-income college students. (See slideshow for a detailed look at the CBPP’s and other statistics).
An analysis by the Urban-Brookings Tax Policy Center (TPC) finds that people earning more than $1 million a year would receive $265,000 apiece in new tax cuts, on average, on top of the $129,000 they would receive from the Ryan budget’s extension of President Bush’s tax cuts.
Part of the savings would be used to reduce the federal deficit, but the bulk of them would go to reward the wealthy with new tax breaks, including abolition of the estate tax and the Alternative Minimum Tax, making the Bush tax cuts for the wealthy permanent, and lowering the top income tax rate from the present 35 percent to 25 percent.
According to the New York Times, White House officials said the budget plan would cut 200,000 children from Head Start, deny food stamps or WIC food commodities to 1.8 million infants, children and pregnant or nursing women, cut transportation financing by up to $50 billion, and cut unspecified billions from federal employee pensions.
Senior Obama adviser David Plouffe, said that Ryan’s Republican resolution “fails the test of balance and fairness and shared responsibility.” Plouffe further expounded that, “It showers huge additional tax cuts on the wealthy that are paid for by veterans and seniors and the middle class.”
Ryan’s plan, essentially, would negate over a half century of progress with federal social programs for the poor and the working class. It would cap federal spending programs at about 19% of the gross domestic product, levels not seen since the 1950’s before the establishment of Medicare and other social welfare programs by the Johnson administration.
Two key historical distinctions to keep in mind, however, are that in the 1950’s under the Eisenhower administration, the U.S. economy was booming and the top marginal tax rate for the wealthiest Americans was 91%. That diminished the necessity for the social programs today that help the poor and working class citizens get by while revenue for expenditures on things such as education and infrastructure projects was plentiful.
While Ryan’s plan is unlikely to pass in an upcoming Senate vote, a bipartisan measure is likely to be reached in a deal before the end of this year, quite possibly after the November elections.
Regardless of which of the two parties control the White House and Congress after the pretense of electing politicians that truly represent the majority of Americans, any budget proposal is likely to slash spending on programs that benefit 99%, while spending billions on increasingly unpopular wars and preserving the majority of the enormous tax breaks for the wealthy 1%.
This will be presented to the American people by our “leaders” under the guise of “equal sacrifice” or “shared responsibility” for the fiscal crisis of the federal government.
Read more here:
Washington Post– Paul Ryan’s budget: Should the poor pay for deficit reduction?
Washington Post– ‘Taxmageddon’ in one table
CBBP – New Tax Cuts in Ryan Budget Would Give Millionaires $265,000…
CBBP – Draconian Republican Study Committee Budget Would Cut Federal Medicaid…
Urban Brookings Tax Policy Center
New York Times– Republicans Take Fire Over a Budget Plan