Path to Plutocracy

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Last year I wrote about Congressman Paul Ryan's Roadmap for America's Future Act of 2010 and how it would increase the tax burdens on working and middle class Americans and make significant cuts to the social safety net. Earlier this month Ryan released the Path to Prosperity, which would dramatically reduce taxes on the wealthy and corporations while making draconian cuts in the social safety net. While the Roadmap and the Path are both radical conservative proposals, apparently Ryan left his Roadmap to go on a Path where the laws of arithmetic do not apply.

Path WordsOne of the main components of the Path that is getting significant amount of criticism is the way in which it essentially shifts the burden of rising health care cost from the government to the people. Not only does it shift cost, but it does by using unrealistic numbers. First the Path assumes repealing health care reform will save $1.4 trillion over the next 10 years while the Congressional Budget Office estimates that health care reform saves more than $200 billion over those same ten years. The Path also claims that the growth of Medicare vouchers will be held below inflation, productivity growth, and increase in health-care costs; beneficiaries would have to make up the difference. Essentially a massive cost-shift as seniors and Medicaid beneficiaries had to pay the difference between what their insurance premiums and the support Ryan's budget was giving them. Ezra Klein notes that the Path is not about saving money but shifting cost, and that “a lot of what Ryan's budget does is shift costs from the federal budget to someone else's budget: Medicaid's costs moves to the states, and then when the states cut it, to the people who need it, or to their families…The budget doesn't have a clear theory for how to spend less on health care. It has a clear theory for how the federal budget can spend less, and other people can spend more.”

Ryan claims that “starting in 2022, new Medicare beneficiaries will be enrolled in the same kind of health-care program that members of Congress enjoy.” But, an analysis by the Center for American Progress shows that if the rate of growth under the proposal were applied to “federal employees' most popular health option, the Blue Cross Blue Shield Standard Option, federal workers, including members of Congress, with family coverage would have to pay another $3,330 for the care they enjoy today. Those with individual coverage would have to pay another $1,555.” The CBO estimated that under the proposal “federal payments for Medicaid under the proposal would be substantially smaller than currently projected amounts. States would have additional flexibility to design and manage their Medicaid programs, and they might achieve greater efficiencies in the delivery of care than under current law. Even with additional flexibility, however, the large projected reduction in payments would probably require states to decrease payments to Medicaid providers, reduce eligibility for Medicaid, provide less extensive coverage to beneficiaries, or pay more themselves than would be the case under current law.”

So, the Path leads to the end of Medicare as it currently exist. What else does this path lead to in the name of fiscal necessity? How about cutting taxes for the wealthy while making cuts to programs that benefit working and low income Americans? According to an analysis by the Center on Budget and Policy Priorities, the Path would get nearly two-thirds of its $4.5 trillion in budget cuts over 10 years from programs that serve people of limited means. As Tavis Smiley often says, budgets are moral documents. This particular budget might claim to prevent the country from going fiscally broke, but it does it by going morally broke. The Path cuts $2.9 trillion from programs that benefit low-income Americans including $2.17 trillion in reductions from Medicaid and related health care, 350 billion in cuts in mandatory programs serving low-income Americans (other than Medicaid), and $400 billion in cuts in low-income discretionary programs. These cuts come while giving $4.2 trillion in tax cuts that would go disproportionately to the wealthy.

The thing about this budget is that it is being taken seriously as a policy document, even though it makes some dubious claims on the way to accomplishing none of the goals that Republicans set forth. The budget uses dynamic scoring model in which the cost of tax cuts is blunted by assumptions about future growth caused by the tax cuts based on discredited Heritage Foundation forecast. It also makes the ridiculous claim that the Path will lead to bringing unemployment down to 2.8 percent in 2021. The Path would not only require an increase in the debt ceiling, but would also violate the balanced budget amendment and spending caps that Republicans have proposed as the cost of increasing the debt ceiling. However, while the Path is a policy failure, it might be a political success.

Despite the criticisms Republican politicians, including Ryan, are currently facing from constituents (particularly those on Medicare), it has succeeded in staking out the far right budget position. What makes this such a success is the budget position taken by the White House. What is more infuriating than the radicalism of the Path to Prosperity budget proposal is the radical moderation of the Obama Administration budget proposal. The White House plan doesn't so much stake out a goal post on the opposite side of the field as it does start on the fifty yard line. There is no public option, Medicare doesn't get the power to negotiate drug prices, the Bush tax cuts don't expire, there's no short-term stimulus, and protected fund for investment. For all of the discussion about a grown up debate about the budget, all we have seen is a political debate that has ignored the needs middle and working class in favor of the elite corporate oligarchy. But there is still someone standing up for working people.

Political and Social Thought…

to the Left of College Station


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