Representative Paul Ryan (R-WI) has unveiled his third long-term budgetary plan for the future but like the last two it is more like a vaguely described future vision. The plan has very few actual figures and relies heavily on cost savings tied to the Affordable Care Act, which the Republican Party establishment has vociferously opposed.
The part of Ryan’s plan that has drawn the most criticism is his use as cost savings the $716 billion that President cut from long-term Medicare expenditures — mostly from the Medicare Advantage plan. Ryan and the Republican leadership had been characterizing this Obama proposal as a severe cut in Medicare benefits. Yet Ryan proposed to plow back the $716 billion into Medicare improvements, meaning that it would not qualify as a spending cut to reduce the deficit.
Paul Ryan’s budget assumes that killing the Affordable Care Act would lead to major deficit reduction, yet he uses cost savings from the ACA, such as the $716 billion from Medicare, to meet his deficit reduction goals. Ryan and his Republican colleagues generally agree that the medical care status quo is not good but their remedies consist largely of tort reform, buying insurance across state lines and medical savings accounts.
Ryan would supply a voucher to Medicare recipients, which they would use to purchase insurance coverage in the private market. The best way to describe this part of Ryan’s plan is cost-shifting: the federal government would save money but seniors would spend more to buy higher priced private medical care insurance. The medical care cost overhead expenditure would also increase in the nation.
In regard to Medicaid, the Ryan budget would give each state a pot of money at the beginning of the fiscal year; however, if Medicaid costs should prove to be higher, the states would need to either provide the extra funding, cut back on benefits and coverage, or try to shift costs to the recipients.
The Ryan budget has only two tax rates: 10 and 25 percent. This will be a huge windfall for wealthy tax filers. As in his prior two budgets, Ryan proposes to cut tax preferences but he has yet to identify even one preference he would trim or eliminate. During the vice-presidential debate last year, Ryan was specifically asked to identify one tax break he would reduce or eliminate, but he couldn’t or wouldn’t; also, he was asked that sort of question by reporters on the campaign trail. But the epitome of his failure to provide answers came in an interview with Chris Wallace of Fox News, who asked Ryan to name one tax break he would trim or eliminate. Ryan replied that there wasn’t enough time. Wallace responded, in effect, “I will give you all the time you need.”
Looking back at the Romney-Ryan campaign is appropriate here. When the Tax Policy Center (TPC) calculated the Romney tax plan would reduce revenues by $5 trillion over ten years — it was really $6 trillion, because the TPC didn’t include the permanent extension of the Bush tax cuts — it concluded that if all tax preferences were eliminated, it would reduce the revenue loss by only $1.9 trillion.
One reason that Paul Ryan is loath to name any tax reductions is that he knows that the ones that would provide the greatest revenue loss are highly popular: the home mortgage deduction, the medical expense deduction, the child care credit and the like.
Paul Ryan has staged a copout on military spending: he says that his budget will keep military spending at a level recommended by the Joint Chiefs of Staff. It is almost inconceivable that the Joint Chiefs will lead any effort for a major drawdown in the structure of the armed forces. Much could be written about a bloated Pentagon, but put in a nutshell, the United States, with about 4.8 percent of the world’s population, accounts for over 40 percent of world military spending.#
In regard to discretionary domestic spending, Ryan has disguised major cuts in such programs as Pell grants and food stamps by putting them in very broad categories.
There is a Ayn Randian aspect to the Paul Ryan budget, as Ayn Rand was a heroine of Ryan’s and Rand stressed individual selfishness as a behavioral model. Paul Ryan’s proposals on Medicare and Medicaid would put recipients more on their own, thereby nullifying the collectivism that Ayn Rand so loathed and feared.
# When comparisons are made of military spending among the nations of the world, only the Pentagon budget and the Afghanistan war are considered to be military expenditures. A more accurate picture of U.S. military spending involves the category termed militarily-related spending. This category includes the Department of Energy’s stewardship of the U.S. inventory of nuclear weapons; the State Department’s need for overseas embassy security — provided primarily by U.S. Marines — the intelligence agencies providing intelligence for military operations; and that portion of the interest on the debt caused by unfunded past wars. Even some part of the Department of Homeland Security budget could be considered to be crucial to our national security.