Paul Ryan has released his new budget proposal, "The Path to Prosperity." It looks almost exactly like his old budget proposal. Really—go back and read the article I wrote one year ago, when the Wisconsin congressman introduced his budget proposal for the 2013 fiscal year, which he also called "The Path to Prosperity.” I said that proposal would take health insurance away from tens of millions of people, that it would starve government of resources to conduct everyday business, that it would take vital support away from low-income Americans, and that its promise of deficit reduction was illusory. Every one of those descriptions is equally valid today.
That tells us a lot about Ryan’s priorities—and how little interest he and his allies have in moderating their views, even though the public rejected them last year.1 Imagine Walter Mondale returning to Congress in 1985 and proposing a budget that undid President Reagan's agenda and reduced deficits by raising taxes on the middle class—in other words, the exact same thing he’d proposed in his losing campaign for the presidency. That will give you some idea of what Ryan is proposing, although Mondale's proposals didn't require the same rhetorical and mathematical games to show budget savings.
The headline Ryan wants you to read is that he's proposing to balance the budget by 2023—that is, a decade from now. Unless the analysts I consulted are missing something, as sometimes happens, this promise does not mean much. Ryan wants to simplify individual income taxes with just two rates: 25 percent and 10 percent. But lowering rates severely reduces the government’s revenue. To achieve the deficit reduction Ryan has in mind, and lower rates as he's proposing, Ryan proposes to "simplify" the tax code, which is a euphemism for closing loopholes. But he doesn’t specify which loopholes he would close—perhaps because he couldn’t achieve the savings he needs without closing loopholes that would affect the middle class.
You may recall that the Romney-Ryan campaign agenda had a similar proposal, for lower rates offset by fewer loopholes, which analysts widely panned as mathematically unrealistic. Ryan's budget may be even less credible, because it would cut taxes from a higher level (the highest rate is now 39 percent, rather than 35, because of the January tax deal) and to a lower level (Romney's proposal reduced higher rates to 28 percent, not 25).2
But the real focus of Ryan’s new budget proposal, like his previous one, is to dramatically reduce spending. The effort starts with a plan to transform Medicare into a voucher scheme. Ryan and his supporters don’t like the word "voucher" because it implies that Ryan’s Medicare reforms would undermine the guarantee of comprehensive health benefits that Medicare has traditionally provided to America’s seniors. But the implication is correct. As of 2024, people who reach retirement age would no longer get government insurance. Instead, they would get a voucher, which they would then use to buy insurance. Year after year, the voucher’s value would rise at a pre-determined pace. And if the voucher weren’t big enough to pay for decent benefits? The last Ryan budget never explained how such a scheme would protect seniors in those cases. The new Ryan budget doesn’t either. Most likely, some if not most America’s seniors would end up having to make up the difference on their own dime.
Ryan’s proposed changes to Medicaid get far less attention. But those changes would be even more profound. Today, Medicaid guarantees a set of benefits to everybody who meets the program’s eligibility requirements, and the federal government promises to pick up the majority of the funding, no matter the cost. Ryan’s budget would end those guarantees. The federal government would write states a check, based on a pre-determined formula, and give states more flexibility over how to spend the money. Problem is, Ryan would also dramatically reduce the programs’ funding. A 2012 analysis of Ryan’s previous proposal, produced by the Kaiser Family Foundation and conducted by researchers at the Urban Institute, concluded that between 14 and 20 million people would lose health insurance as a result.
By the way, that figure doesn’t include an additional 17 million people the researchers estimated would lose Medicaid—plus a roughly equal amount who would lose government-subsidized private insurance—because Ryan's budget assumes the unlikely repeal of Obamacare’s coverage expansions.
All of this was in the last Ryan budget. The same goes for Ryan’s proposal for food stamps, which now goes by the name Supplemental Nutritional Assistance Program (SNAP). Like his plan for Medicaid, Ryan wants to end its entitlement status and turn it into a block grant. As many as 10 million people would have lost food assistance under Ryan’s last proposal, according to an analysis from the Center on Budget and Policy Priorities. Ryan also has renewed his call for much lower “discretionary spending,” which is spending that doesn’t renew automatically like the entitlements do—think of food inspections, border control, housing assistance, pretty much any spending that requires regular congressional authorization. Ryan would protect defense spending from these cuts, meaning he needs larger cuts everywhere else. Last year I described Ryan’s budget as “effectively eliminating” these discretionary-spending programs. In retrospect, that was overstated. It would merely devastate those programs. As Ezra Klein writes, “The real justification for Ryan’s budget and the choices it makes is not fear of a debt crisis but fear of government.”
The report’s distinct treatment of defense and non-defense spending is actually a great window into Ryan’s fundamental philosophy. The section on defense spending has long passages about the importance of national security and the dangers of intemperate cuts. Rooting out waste is important, the document says, but it must be done carefully. The section on the social safety net has virtually no similar language. A reader unfamiliar with the reality of American life would have no idea that millions of Americans live in poverty—that they struggle, every day, to pay for bare necessities like gas, rent, and food. Of course, if "The Path to Prosperity" mentioned those things, readers might want to know what Ryan proposed to do about them. But Ryan doesn’t propose meaningful substitutes for the support he’d take away. Instead, he puts his faith in the strength of individuals and communities to help those who struggle.
Many people have observed that Ryan’s budget seems politically unrealistic. That’s true, although I am not sure political reality is as important as everybody seems to think.3 But if Republicans are going to endorse this agenda—and there’s no reason to think this budget won’t pass the House, just like the last two Ryan budgets did—then they should be held accountable for it. This budget offers no hint of compromise, even though Republicans have demanded President Obama offer new concessions to accommodate conservatives. This budget also shows no hesitation about undermining vital and popular government programs, even though Republicans say they want to present a more moderate image to the public.
Over the next few days, analysts will pore over the Ryan proposal, just as they will the Democratic proposal that Senator Patty Murray releases on Wednesday. Once the analysts are done, they will undoubtedly discover new wrinkles not apparent right now. But the numbers are a lot less important than the overall message. Budgets are statements of values. And with this budget, Ryan, once again, has revealed what Republican values are: cutting taxes, primarily to benefit the wealthy, while savaging programs on which the poorest Americans rely. It was true before and it’s true now.
On page 19, the document describes the upper rate of 25 percent as a “goal,” so perhaps Ryan and his advisers realize it will be difficult to achieve.
I, for one, think Mondale was right about middle class taxes—and still is.