Paul Ryan's New Budget Takes Aim at Economy, Social Safety Net

     I guess is what you want is a "serious budget plan" than Ryan's plan which he unveiled today was serious alright. It leaves little untouched. He voucherizes Medicaid, slashes food stamps, education, and health but still manages to give us a near flat tax monstrosity for the rich-we're left with just two tax rates-25% and 10%. Maybe this is why Republicans love assault weapons with no limits on magazines: no way you could reap this much destruction on the economy with limits on clips.

     "Here is Paul Ryan’s path to a balanced budget in three sentences: He cuts deep into spending on health care for the poor and some combination of education, infrastructure, research, public-safety, and low-income programs. The Affordable Care Act’s Medicare cuts remain, but the military is spared, as is Social Security. There’s a vague individual tax reform plan that leaves only two tax brackets — 10 percent and 25 percent — and will require either huge, deficit-busting tax cuts or increasing taxes on poor and middle-class households, as well as a vague corporate tax reform plan that lowers the rate from 35 percent to 25 percent."

      http://www.washingtonpost.com/blogs/wonkblog/wp/2013/03/12/paul-ryans-budget-isnt-about-the-deficit/?hpid=z1

      As Ezra Klein argues, it's much less about deficit reduction than simply taking a meat ax to government spending. I think what gets me in particular is the huge tax cut for the wealthy-which may imply a middle class tax hike. Greg Sargent isn't sure-he says there's not enough information, which is true, however, it depends who ends up on that 25% rate-for many this would be a major tax hike.


      I tend to assume that it will, however, Sargent argues that he was shrewd enough to make this unclear:

     "Here’s the first thing you need to know about Paul Ryan’s budget, which was released this morning: Ryan appears to have shrewdly taken two important steps that allow him to avoid the political pitfalls that bedeviled Mitt Romney’s campaign tax plans last year. In so doing, he has made it impossible to determine whether his budget would raise taxes on the middle class to pay for tax cuts on the rich — as experts claimed about the Romney plan.

     "This comes by way of Roberton Williams, a senior tax expert at the nonpartisan Tax Policy Center — the same outfit, you may recall, that set off a bomb during Campaign 2012 by demonstrating that there was no way Romney’s tax plan could pay for itself without targeting some middle class loopholes.

Romney’s tax plan cut taxes across the board by 20 percent, hugely and disproportionately benefiting the rich — and paid for it by promising to close unspecified loopholes. But the Tax Policy Center found that even if you eliminated all the loopholes and deductions enjoyed by the rich, you still wouldn’t have enough to offset the costs of the tax cuts. So you’d have to hit some middle class loopholes to keep the plan’s promise of revenue neutrality — offsetting the tax cuts enjoyed by the middle class, and then some, meaning a tax hike for them."

      "Ryan’s new plan consolidates all tax brackets into two. It sets a target of cutting the top tax rate for individuals to 25 percent — a bigger tax cut for the top than in the Romney plan — and sets the other bracket at 10 percent. It cuts the corporate tax rate to 25 percent. The plan would be made revenue neutral through tax reform, by closing loopholes, but it doesn’t say which ones, noting that this work will be left to the House Ways and Means Committee."

     "But the key here is that the plan does not say definitively that the top rate would be 25 percent; it only says that this is a “goal.” What’s more, the plan says nothing about what it would do with rates on capital gains and dividends. During the campaign, Mitt Romney and Ryan suggested they would not raise rates on those. The new Ryan plan doesn’t specify one way or the other."

    "There is an apparent method to leaving these two things vague. It makes it impossible to say whether the plan can be paid for without targeting loopholes enjoyed by the middle class. According to the Tax Policy Center’s Williams, without this information, it’s impossible to say whether the plan’s stated goals are feasible."

    “The plan essentially says, `here are the big parameters; now you go figure it out,’” Williams says.

    "The tax cuts for the rich mean the cuts have to be even deeper to pay for in order to balance the budget in 10 years as Ryan has promised to do. It's truly a a manifesto for Social Darwinism. He also manages to end the benefits of ObamaCare while leaving in the cuts to Medicare from the bill. The Dems are scheduled to release theirs tomorrow which will actually include fiscal stimulus in it:"

   "Tomorrow, Senate Democrats will propose a plan to replace the sequester that contains $100 billion in … stimulus spending."

    "Yep, you read that right. According to a source familiar with the proposal, Democrats will offer a plan tomorrow that does not simply cut the deficit amid mass unemployment. It takes steps to mitigate the damage the cuts are expected to do to the economy by spending to boost job creation and job training."

     "According to the source, the plan — which is being presented by Senate Budget Committee Chairperson Patty Murray to the Dem caucus today — replaces the whole sequester with nearly $1 trillion in deficit reduction, derived from a 50-50 split of cuts and revenues derived from closing tax loopholes. The $493 billion in spending cuts includes $275 billion in cuts to health care spending (but no Medicare benefits cuts; the source says cuts would be focused on the provider side), and $240 billion in defense cuts."

    "It would spend $100 billion to boost the economy through spending on infrastructure repair and job training — all paid for by closing loopholes and cuts to “wasteful spending.” (Details are not yet available.)"

     http://www.washingtonpost.com/blogs/plum-line/wp/2013/03/12/budget-war-showcases-sharp-contrast-in-values-and-priorities/

     Sargent makes the compelling case that this plan of the Democrats is actually more serious in that at least it achieves some level of compromise. 

      "Now, surely deficit hawks will find the health care spending cuts wanting. But the point here is that even if you grant that this won’t do much of anything to deal with long term health care costs, this is a generally balanced way to avert the immediate threat posed to the economy by the sequester, if by “balanced,” we mean, “gives both sides some of what they want.” It cuts spending amid the fragile recovery, but does include some stimulus to cushion the impact of deficit reduction. It reduces health care spending while avoiding harm to beneficiaries. Both of those are enabled partly by closing the sort of millionaire loopholes Republicans used to favor closing back when they were trying to do that to avoid raising tax rates on the rich, during the fiscal cliff fight."

       He's surely right the deficit hawks won't be mollified by the health care spending cuts. We ought to point out though that we've seen a sharp decrease in health care spending the last few years that ought to be considered. 

       What this really points to is the starkness of the choice before us. The parties couldn't be further apart on the economy, the role of government, etc. Still, isn't Ryan at least a little self conscious in giving us such an extreme austerity budget after the loss he suffered? He claims he thinks the election validates his priorities. 

      Ryan argued that the election's outcome didn't matter.

  
     "The election didn't go our way. Believe me, I know what that feels like," he said. "That means we surrender our principles? That means we stop believing what we believe in? Look, whether the country intended it or not, we have divided government. We have the second largest House majority we've had since World War II. And what we believe in this divided government era, we need to put up our vision."

    "He also suggested maybe voters did agree with the GOP."

    "Are a lot of these solutions very popular, and did we win these arguments in the campaign? Some of us think so," Ryan said.

     http://www.huffingtonpost.com/2013/03/12/paul-ryan-budget-house-gop_n_2860696.html

      This is why I've said in the past the GOP is in a lot of trouble. The Nile sure isn't just a river in Egypt. If you won the arguments during the campaign how did you lose the election? Does the Congressman have any theory how if the American people agreed with the GOP so much how they lost the election?

      If Americans agreed with Ryan and yet voted for Obama does he have any theory as to why this is? Why did Obama win?