Last week was a tough one for Wisconsin Congressman Paul Ryan and the Republicans in Congress. First there was the stinging defeat by Kathy Hochul in a Republican congressional stronghold in New York. Then, the next day, the U.S. Senate rejected the budget plan crafted by Congressman Ryan.
This was the plan that guts Medicare by converting it from a program that pays medical bills for seniors to a program that gives them inadequate vouchers to go out to buy their own health insurance.
The Republican House of Representatives passed this plan and then went home to a firestorm of criticism from constituents who like their Medicare. But this plan was terrible in lots of other ways besides undermining Medicare.
The plan featured drastic cuts of some $4 trillion over 10 years. Besides ending Medicare as we know it, the plan would also deeply cut health care for poor children, the disabled and the elderly; food stamps; housing programs; Pell grants for low-income students to attend college; and every other federal program you ever heard of, such as the FBI, national parks, homeland security, interstate highways — you name it.
The House Republicans who passed this budget said these severe cuts had to be made to save our children from future budget deficits. They said, “We all need to sacrifice to reduce the national debt.”
Read the fine print
That all sounds very noble until you read the fine print. Because at the same time the House Republicans voted to cut $4 trillion out of programs that help ordinary people, they voted to give the same $4 trillion in tax cuts to the very rich.
First, the Ryan plan would have permanently extended all the Bush tax cuts, including those for taxpayers making over $250,000 per year. That alone would add about $1 trillion to the national debt by 2019.
Second, a huge new cut would reduce the top tax rate (paid only by the richest 2 percent of taxpayers) from the current 35 percent down to 25 percent — for both individuals and corporations. This alone would cost the treasury almost $2 trillion.
Finally, other miscellaneous tax cuts — all targeted for the rich — make up the last $1 trillion.
If you cut middle-class programs on the one hand, but then also cut taxes on the rich at the same time, what impact do you make on future deficits? None. They just cancel each other out. This is using fears about deficits to pull a fast one on the American people.
Robin Hood in reverse
Congressman Ryan claims his proposal would make up $3 trillion of this lost revenue by closing tax loopholes and “broadening the tax base.” But he and other Republicans have declined to name a single loophole or specific change to broaden the base, which has to make you wonder how serious they really are about reducing the deficit because you would need new revenue to balance the budget after so many tax cuts.
According to the Center on Budget and Policy Priorities, there is only one way to balance out a revenue loss of $3 or $4 trillion — raise taxes on the middle class. So in the guise of “putting the nation’s fiscal house in order,” the House Republicans are trying to sneak through a massive transfer of tax responsibility from the rich to the middle class. This is not serious deficit reduction; it’s Robin Hood in reverse.
President Obama’s proposal takes deficit reduction much more seriously. It goes after future deficits by finally allowing the Bush tax cuts for the richest 2 percent to expire, and it also cuts almost $3 trillion in program spending over a 12-year period. Many of these cuts would be very painful, and personally I don’t agree with them all, but at least they would all go to reduce the deficit, and at least there would be no tax increases on the middle class.
The bottom line is that Congressional Republicans, including Congressman Pearce, have made a lot of noise about the dangers of future budget deficits. Unfortunately, that now looks like little more than a smoke screen behind which they will transfer income from the middle and working class to some of the richest people on the planet.
Griego is a state senator, executive director of N.M. Voices for Children, and a candidate for Congress in the 1st Congressional District.