JONATHAN COHN MARCH 20, 2012
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Imagine a politician held a press conference in order to boast about a plan that would take health insurance away from tens of millions of people, while effectively eliminating the federal government except for entitlements and defense spending. You probably can’t, because no politician would ever do that.
Except Paul Ryan just did.
No, he didn’t put it in quite those terms. Instead, Ryan on Tuesday unveiled the latest version of his proposal for the federal budget, which he calls the “Path to Prosperity.” He vowed that it would reduce deficits, promote economic growth, and strengthen the safety net. The first two claims are dubious, at best. The third is just dishonest—and, if taken literally, morally bankrupt.
From afar and even up close, the new Ryan budget actually looks a lot like the old Ryan budget. It calls for a reduction in taxes that, if implemented, would likely give a disproportionate share of benefits to the wealthy. It calls for radically reducing discretionary spending, so that it is less than 4 percent of gross domestic product by 2050. And it calls for transforming Medicare into a voucher system.
Officially, the end result would be lower deficits, lower even than the deficits that President Obama’s latest budget proposal would produce. And that’s a major selling point for Ryan and the Republicans. But the numbers seem more than a little fanciful.
For one thing, Ryan envisions a reduction in non-defense discretionary spending to levels this country hasn’t had since just after World War II. According to the Center on Budget and Policy Priorities, by 2050 “most of the federal government aside from Social Security, health care, and defense would cease to exist.” That’s everything from air traffic control to medical research to food inspections to Pell Grants, by the way. If the Ryan budget somehow became reality then you might have to give up on college and avoid air travel—assuming you survived the food poisoning and killer diseases.
Of course, as Jonathan Bernstein notes, “Republicans don’t really want to shut down the FDA, the FBI, and the national parks, not to mention patrolling the border and farm programs and roads ... It’s not even remotely realistic.” Steve Bell, senior director of the Economic Policy Project at the Bipartisan Policy Center, puts it a bit more delicately. The cuts, he says, seem “quite improbable.”
He's right. But without those cuts, a big chunk of Ryan's anticipated savings would disappear.
The idea that Ryan’s budget would promote a stronger economy (from which, in theory, it would gain even more tax revenue) is just as shaky. If lower taxes always produced higher growth, then the Bush years would have been a lot more prosperous and the Clinton years would have been a lot less. Yes, tax rates have real effects on the economy. But they are complicated and interact with other influences, in ways Ryan and his conservative backers never really acknowledge.
But forget about all of that. Let’s focus, instead, on the big target of Ryan’s budget: Health care spending.
Last time around, it was Ryan’s Medicare proposal that got the most attention—and, over time, that caused Republicans the most political grief. Instead of preserving the traditional government insurance program, Ryan had proposed that, starting ten years from now, the government would give seniors vouchers with which they could buy private coverage. He promised to keep the old program in place, for seniors who were already on it, and he promised to regulate the private market so that all seniors could still get coverage. But, over time, the value of the voucher would likely have diminished relative to the cost of medical care—producing the huge budget savings Ryan wanted, in part to pay for tax cuts, but also leaving seniors exposed to much larger medical bills. The Congressional Budget Office determined that, by 2022, the typical senior 65-year-old be responsible for two-thirds of his or her medical costs.
Ryan has stepped away from that plan, although not by as much as you may have heard. He’s still calling for turning Medicare into a voucher program that would not make the same guarantees of benefits, for example. The difference is that traditional Medicare would remain as an option for seniors, even beyond the next decade. He also envisions the voucher growing a little more rapidly. That, combined with newly revised projects that suggest the cost of health care is growing less rapidly than anticipated, would likely give seniors more protection than the first Ryan budget did. In these respects, it's similar to the bipartisan Medicare framework Ryan put together with Senator Ron Wyden, the Democrat from Oregon.
But Ryan's new plan would still leave seniors more vulnerable than they are now—and more vulnerable they'd be even under Obama's latest, most aggressive proposal for cutting Medicare cuts. Chief among the reasons: Even the new Ryan vouchers wouldn't guarantee access to a set of benefits. If costs rise faster than the value of the vouchers, as they very well might, seniors would have to make up the difference themselves.
Still, it’s not the Medicare population that takes the biggest hit this time. It's the Medicaid population. For starters—and this was the very first thing Ryan mentioned at his press conference—Ryan would repeal the coverage expansions of the Affordable Care Act. This is old news, I know. But few people seem to appreciate the impact. Take away the Affordable Care Act and you take away insurance from the 30 million people who are supposed to have it come 2014, when the law goes into full effect. About half of them are supposed to get that coverage from Medicaid.
Now throw in Ryan’s proposal to convert Medicaid into a block grant, under which the federal government would no longer guarantee insurance coverage for everybody that meets eligibility standards. Instead, the government would simply write checks to the states, for predetermined amounts, and let them figure out how best to spend the money. To generate the savings his budget needs, he’d reduce the value of those grants over time, relative to health care costs and current projections.
Ryan claims that, given the freedom to innovate, states will find more efficient ways to stretch their dollars. But Medicaid already costs less, apples to apples, than private health insurance. And even to the extent states could find new efficiencies—and I'm willing to believe that at least some could—those wouldn’t be enough to replace the dollars Ryan wants to take out of the Medicaid system. Ryan proposes to reduce the program’s funding by more than $800 billion over the next decade, above and beyond the reduction that comes with repealing the Affordable Care Act. According to the Center on Budget, the result would be funding 22 percent below what it is now. (See figure at left.) And the cut would grow over time. “Another way to look at it,” says Edwin Park, of the Center on Budget, is that “in 2040, measured as a percentage of the economy, Medicaid/CHIP spending will be half the levels they are today—when there is no coverage expansion and not taking into account aging of the population and rising health care costs.”
Altogether, the CBO says, spending on Medicaid, the Children’s Health Insurance Program, and subsidies for private insurance would be nearly 75 percent lower in 2050 than projected under current law. (See figure below, from the CBO report.) Let that sink in for a minute: Ryan wants to reduce the government’s investment in helping people get health insurance by three-quarters. It’s impossible to know exactly how such a cut would play out, at least right now, but when the Kaiser Family Foundation asked the Urban Institute to project the impact of last year’s block grant proposal, it determined that between 14 and 27 million people would lose insurance.
Could such a proposal ever get through Congress? Probably not. Those numbers are as fantastical as the one on discretionary spending. But Ryan's willingness to endorse such plans says something. As Ed Kilgore and Ezra Klein observe, the decision to shift the burden of cuts so that the poor feel relatively more of them is no accident. The Republican base these days is disproportionately white and old, which means it’s more willing to tolerate cut to programs that seem mostly to benefit non-white, non-old people. In fact, left-wing polemics about Ryan’s insensitivity to the poor—like the one you are reading, for example—may not bother the base that much.
The irony is that many middle class people will gain security from private insurance subsidies from the Affordable Care Act, which Ryan would eliminate. And while Republicans have done their best to caricature Medicaid as just another wasteful program for the lazy poor, the bulk of the program’s spending goes to the disabled and elderly who need extra assistance paying for things like nursing home care. Middle class Americans benefit from those programs, too—if not directly, then indirectly as caregivers and family members.
The reality of our fiscal situation hasn't changed: Restoring fiscal balance will require a mix of spending cuts and new revenue. This proposal, like Ryan's last proposal, tries to achieve balance entirely with the former. It's not going to work, nor should it.
Note: Having been through this exercise a few times, I've learned that budget proposals frequently look different after a day or two. If that happens, I'll update this item accordingly. In the meantime, if you want more information, I'd advise watching the Center on Budget for updates and reading the Washington Post's Wonkblog for its typically thorough coverage.
follow me on twitter @CitizenCohn
61 comments
"Let them eat aspirin and birth control pills," said Marie Ryan Antoinnete. She hastened to add, "As long as they pay for it themselves."
- skahn
March 21, 2012 at 12:05am
I'll be turning 25 in December. Now that the chestnut that is the Ryan budget has been revived, I'm almost tempted to run against Peter King. Too bad I have grad school to attend to. I'm sure that even if the Occupy movement is attenuated, if they remain as politically attuned as their support for the House Progressive Caucus's economic proposals and their "Occupy the SEC" activism suggested, the votes that almost all Republicans cast for the Ryan budget last year, the pressure they'll be under to support it as primaries continue, and just the existence of this plan in the news for this year will probably cost the Republicans as many seats in the House as the ACA cost Democrats.
- chaitless
March 21, 2012 at 12:35am
We most fervently hope.
- Sophia
March 21, 2012 at 2:34am
Now if we can only eliminate the poor...
- paskunac
March 21, 2012 at 6:53am
Here's their Plan for Prosperity. Cut taxes at the top so the rest of us have to carry the debt and leave as many as possible untrained, unemployable, and toothless people on streetcorners begging.
- Nusholtz
March 21, 2012 at 7:35am
There are two approaches to entitlement (in this case health care) reform: One, cut benefits to everybody, letting both poor and middle class bear the brunt of the cut; and two, cut only the benefit to the poor, letting them bear the brunt of the cut. Ryan is a quick learner, as he learned last year that the first approach is unacceptable to the middle class, and to Republican political fortunes. Now, Ryan has the chance to sell his new approach to the middle class, and he may well succeed. Why am I pessimistic? Because the subject of entitlements is complex, which makes it vulnerable to deceipt, especially vulnerable when those being deceived aren't that interested in not being deceived but most definitely receptive to pandering. David Corn's new book credits Obama and his political advisors with masterful political skills, having "defeated" Ryan, Boehner, and Cantor in the budget wars and putting them on the defensive and Obama in a position to likely win re-election. Ryan's latest proposal for entitlement reform shows that he is not defeated and will be a formidable adversary. In Ryan's formulation, entitlement reform is about saving America from financial armageddon while sparing the middle class from real (or immediate) sacrifice. In Obama's formulation, it's about guaranteeing birth control for everybody. I suspect that the timing of Corn's new book may be unfortunate, at least it may be for Corn.
- rayward
March 21, 2012 at 8:00am
It amazes Paddy that, even given a second whack, not a single punditess or pundit has noticed how the Smirk of Janesville insists on delivering the wrong pizza. We ordered a Fedguv budget for a single fiscal year; what we have been handed is two not-very-different Thirty Year Plans for Neoplutocracy. Comrade Cohn is a little better than most, insofar as he has heard of Medicaid, which is slated for a course of Smirk Therapy™ much sooner than are Medicare and the Ponzi Security Administration. Nevertheless, he is soon talking about the supposedly stunning excitements of ‘2050’ and ‘2040’ rather than about boring old FY2013. When it comes to the Party of Grant & Hoover and Goldwater an’ Atwater ’n’ ____, Paddy McTammany has long since decided that that ’tis wisest to assume that they operate consciously by the prophetic words written on the wall of Bartley’s Burger Cottage in 02138: Life is uncertain. Eat dessert first. The comrade observes that Don Pablito’s latest might "look different after a day or two." It would be nice, and maybe even polemically useful, if somebody qualified would go through the thing with a red pencil in quest of what the Malefactors are tryin’ to get their paws on IMMEDIATELY--before midnight 30 September 2013--rther than in some science-fictional year out beyond the orbit of Neptune. Happy days. ___ [*]
- jhmccloske
March 21, 2012 at 8:06am
what?!?
- Nusholtz
March 21, 2012 at 8:18am
This is Mitt Romney's platform now, you know. He endorsed the Ryan budget before, now he will have to double down on it. Enjoy your $10 voucher for Medicare in the most expensive health care market in the world. It's so sad that Obama and the Dems phased in so much of their laws because it provides relentless craziness and half-truths that are still driving a large set of our population to hate each other. If it came in more quickly, then we could experience it more directly. Just remind people that insurance companies cherry-picked for the longest time. They dropped you if you got sick, even if you were healthy your whole life. Simply dropped you, and Ryan thinks and believes this is the free market in all its glory. Screw that.
- RedState
March 21, 2012 at 8:48am
"Now if we can only eliminate the poor..." You've gleaned Ryan's real purpose from his mess of a budget proposal, paskunac. The problem for Ryan, however, would be a serious one that Jonathan referred to. While appealing to the middle class by letting the poor fall by the wayside, parents and grandparents of middle class folks would also have to be let go. Bye, Nana and Bumpa. I'll always remember the ice cream and the scary bedtime stories.
- magboy47.
March 21, 2012 at 9:01am
I love Ryan, if you are going to be the bitch of Satan might as well proclaim it loud and true. I am going to enjoy watching demographics pass him by and in 10 years or so he will be relegated to the sidelines. If Americans are so damn stupid to buy into his horseshit, they deserve the suffering they will get.
- blackton
March 21, 2012 at 9:07am
@jhmccloske - I read that post 3 times and I still have no idea what the f you just said. You aren't related to the poster known as Jaime Chuch by any chance.... ?
- Tristan
March 21, 2012 at 9:14am
Also, what Blackton said. We need to photoshop a "Bitch of Satan" t-shirt on Ryan and the rest of the gop wrecking crew and distribute the photos far and wide. I can't wait to see how this plays out with the Romney camp. He's going to have to endorse Ryan's plan, he's painted himself into that corner already, and it's going to make any pivot towards the center that much more excruciating for him. Best of luck sellng your support for the execution of Medicare to independant seniors, Mittster.
- Tristan
March 21, 2012 at 9:18am
I'll be all around in the dark - I'll be everywhere. Wherever you can look - wherever there's a fight so hungry people can eat, I'll be there. Wherever there's a cop beatin' up a guy, I'll be there. I'll be in the way guys yell when they're mad. I'll be in the way kids laugh when they're hungry and they know supper's ready, and when the people are eatin' the stuff they raise and livin' in the houses they build - I'll be there, too. Rich fellas come up an' they die, an' their kids ain't no good an' they die out. But we keep a'comin'. We're the people that live. They can't wipe us out; they can't lick us. We'll go on forever, Pa, 'cause we're the people.
- GeoffG
March 21, 2012 at 10:05am
Well, the Republicans are now looking to completely alienate women AND the federal workforce. Hey, I realize there are stereotypes of the government workforce (I’m a Navy civilian employee), but for Ryan to single out one particular group as the cause / remedy for cost savings is pretty audacious. But at least he’s bald-faced about it. I’m sure we could have a lasting discussion on this topic, but some of Ryan’s justifications are ridiculous. Remember back in ’04 when everyone was fat and happy, livin’ high off the hog? The commercial sector was profiting just fine compared to the government counterparts. The perception always changes with the national prosperity landscape. This from WaPo: www.washingtonpost.com/politics/gop-budget-would-mean-5-year-pay-freeze/2012/03/20/gIQAtteBQS_story.html?wprss=rss_politics
- OkiSaru
March 21, 2012 at 10:12am
This is for GeoffG http://www.youtube.com/watch?v=BWmUKr7iqZQ
- Jonathan Cohn
March 21, 2012 at 10:28am
Cohn says "The irony is that many middle class people will gain security from private insurance subsidies from the Affordable Care Act, which Ryan would eliminate. And while Republicans have done their best to caricature Medicaid as just another wasteful program for the lazy poor, the bulk of the program’s spending goes to the disabled and elderly who need extra assistance paying for things like nursing home care. Middle class Americans benefit from those programs, too—if not directly, then indirectly as caregivers and family members." I don't think the GOP have a sense of irony regarding this debate. What many have indicated is that the GOP's goal is to devolve the US into a plutocratic, banana republic run by the very wealthy while the back-sliding middle class and working poor plebs wither away in the gutters. What 90% of those angry, aging white people supporting the Ryan plan and calls for 'regime change' fail to forget and choose to forget (thanks to the GOP's willful dishonesty and demagoguery) is that a large percentage of the "lazy poor" and good for nuthin' disabled and elderly are white people. 84% of medicare recipients are elderly, 15.4% disabled. 78% of medicare beneficiaries are White. 39% of medicaid enrollees are elderly, 8% are disabled. 82%of medicaid beneficiaries are White. What does it say when the GOP can effectively use the medicaid/welfare stereotype of the 'lazy, shiftless negro' and the 'emergency-room-service-grabbing dirty illegals' to literally propose gutting the social welfare and health programs that a majority of aging, white Americans enjoy to successfully get white Americans to support those proposed GOP cuts? Talk about cutting your nose off to spite your face. I really hope Americans wake up and realize the GOP have been pissing in their coffee all this time when asking if they want one or two lumps of sugar.
- singlspeed
March 21, 2012 at 11:16am
Geoff - I promised myself I would NOT cry anymore when reading TNR, unseemly and all that. Thanks ALOT :)
- WandreyCer
March 21, 2012 at 11:25am
A perfect rant singlespeed.
- WandreyCer
March 21, 2012 at 11:32am
Thanks! Favorite movie plus favorite musician plus (one of my) favorite blogger(s). Ma Joad's paean to the people at the end of GoW was prophetic - the heartless bastards didn't win then, and they won't win now. The question is how much destruction they'll manage to cause before they die out.
- GeoffG
March 21, 2012 at 11:34am
Okay, so the Ryan plan is a little too mean for the "caring" party. However, Cohn acknowledges the benefit of the 3 trillion over 10 years in defecit reduction with respect the president's budget. It's just too bad the "caring" party has gotten acclimated to producing no such plan. To produce a substantially more "caring" defecit reduction budget requires substantially higher taxes. This in turn will force the economists at CBO to inconveniently reduce growth projections. Thus the more "caring" will be revealed to be more "anti-growth" and that is just too costly when you have so many blue dogs at stake. An adult could argue that the benefits of "caring" outweigh the costs to growth, but argument isn't the "caring" party's forte. Therefore, the "caring" party will just have to content itself with leading from the rear. Sadly, it is the "caring" party which flatters itself with being the more serious political party. Sadder still, they may be correct. Although Mitt Romney may just turn that around. Therefore,
- jkodak
March 21, 2012 at 11:38am
JC writes: " It calls for a reduction in taxes that, if implemented, would likely give a disproportionate share of benefits to the wealthy" This will be true in any country that has a progressive tax system that is contemplating a reduction in taxes. And the US has a very progressive tax system.... If you want the middle class to enjoy a tax break, first you must make them pay taxes.
- seattleeng
March 21, 2012 at 11:49am
"To produce a substantially more "caring" defecit reduction budget requires substantially higher taxes. This in turn will force the economists at CBO to inconveniently reduce growth projections. " What reduced growth projections are you talking about kodak? Health care? Government income? Overall economic income? There has to be a balance of reasonable tax rates (across all spectrums) to cover the cost of basic welfare benefits for American citizens. That is the price of living in a civilized society some of us refer to as the United States not the 'we're drinking buddies' States of America. The GOP and Ryan's of the world like to think they just create something from nothing and it's all because they willed it and owe nothing to anyone but their ID. That we've had historically low tax rates the last 14 years, one would think that the projected growth that the GOP thinks happens with supply side economics would appear and yet, never materializes. I wonder how long we have to keep doing that dance? Unless of course you are projecting the growth of only the top income earners. We've seen that grow exponentially without any of the so-called investment benefits the GOP tells us magically happens when the 'job creators' get together for cigars and cognac.
- singlspeed
March 21, 2012 at 11:56am
Wandrey, thanks. And don't get too depressed. Channel that frustration towards better things.
- singlspeed
March 21, 2012 at 11:57am
Does Medicaid eligibility under PACCA expand to New York eligibility standards? Just wondering, because one in four New Yorkers are on Medicaid, and, for some unknown to me reason, the cost per capita for longtermcare in New York is double per capita than same in Connecticut and New Jersey. Just would like someone to explain how the cost of longtermcare is going to be "managed" by PACCA since I find myself in the three percent who pay for their own ltc insurance despite being in the bottom fifty percent of income. I thought PACCA uses the NYS model for Medicaid, so I can understand why the other states are scared. As to Ryan's budget? well, when will the Dems submit a budget? The absence of leadership is bipartisan... Now retreating to my "pox on both parties bomb shelter", so no need to to waste precious keystrokes in your venom to the wandering Medicare kvetcher.
- K2K
March 21, 2012 at 12:16pm
Just when I was returning to earth--worrying about gas prices, thinking that Romney had learned to tighten his tin lips further--the GOP produces and uniformly endorses this inhumane, reckless, and duplicitous "budget." In concert with the vicious negative turn in the GOP South Carolina primary, this will go down as one of the two or three turning points that gave Obama the White House. Thank you, Paul Ryan. Thank you for being a plutocratic intellectual gnome.
- polcereal
March 21, 2012 at 12:30pm
One of the ironies here: the Ryan plan making Medicare into a "public option." Another gift to the Democrats. This guys is a one-man fifth column (to mush metaphors a bit) for the GOP.
- polcereal
March 21, 2012 at 12:39pm
We most fervently hope!!! I'm worried. The fact that the whole GOP has endorsed this b******t makes me nervous. Are they really trying to take this country down? Or what? They can't do it unless they snow a significant amount of people AND/OR they cheat AND/OR the pull a Florida 2000...we really, really need to get rid of the Electoral College so that, in 2012 and beyond, people can't vote their slaves.
- Sophia
March 21, 2012 at 12:57pm
Thanks singlespeed - it's more of an inchoate anger thing. I could easily throw a drink in Ryan's face if I ran in to him in one of my old DC watering holes or house parties (this represents a grave statement from a WASP, the very worst we can think of - being hostile and unspeakably rude to a person's face, the horror!). Your quote just nailed it. That book was my bible growing up (hmmm, how many of us anyway...?). Its alright K2K, come out come out. I do not know the answer to your medicaid question. But why should Democrats submit a budget mid-cycle just to give the crazies fish chum to lie about on Fox, etc? I read a great quote on TNR here somewhere about a reporter in Boston who had one of the old-school Irish pols walk up to the press table at a hearing and and say "the problem with you people is you think this is all on the up and up." If I thought the opposition was capable of telling the truth about anything, I'd welcome a budget no matter how silly the timing. But they are not. Romney said Obama had no jobs plan, as Obama was touring he country touting his jobs plan. They said health care costs doubled, when they slighty went down. They can't make a lick of sense with their gibberish on saving the car industry, just that somehow saving a zillionjobs and making a huge profit for both the companies and the government was bad bad bad, something about yelling at Clint Eastwood I think. They say the Medicaid is just a bunch of slothful (fill in the blank non-white people) when it's mostly very poor elderly and disabled white people. They say that the economic recovery, admittedly mild, is an illusion. They say that women are demanding that tax payers pay them to have sex when they are asking no such thing. They say the stimulus did nothing, when it saved hundreds of thousands of jobs. They say Obama doubled taxes (manifest bull) and the debt, when his spending is significantly lower than any of the last three Republican Presidents and he's cut taxes more than George Bush ever did. They say that cutting taxes for rich people raises revenue - all blatant, easily disproved lies. Etc. There really isn't an equivalency. Democrats may be naive and (where have you gone Rahm?) and spineless at times, but they also have terribly earnest, wonky think tanks like the Center for Budget Policy and Priorites churning out well researched technical data politely disproving Republican economic hogwash daily (and extremely clever and brilliant writers like JC doing the same thing). There may be an exaggeration here or there by Dems, but the level of lying on the right is just atrocious - my seven year old would be grounded for a year if he tried even half the level of their dishonesty. Paul Krugman is exactly right about their frontrunner for the Presidency - a word of truth has not passed his lips once in this entire campaign. It's just like the good old days with Dubya, he lied every time he spoke in public too (except when he said he married up, very true). You'd be a fool to trust any of them, especially on the economy. Republicans are by any measure less dishonest and tend not to foist yet more giveaways to rich people and oil companies at the expense of poor people on Medicaid.
- WandreyCer
March 21, 2012 at 12:59pm
Plutocrat intellectual gnome. We need a tee-shirt for that one too Tristan.
- WandreyCer
March 21, 2012 at 1:01pm
kodak, the CBO projections have the worst time correlating tax rates to growth. It is a formula with so many variables they publish different estimates where the sole difference is the assumed amount of growth or shrinkage from a given set of tax rates. So I'm not even remotely convinced by your argument, even if I agree that the Democrats are the less worse option.
And Paul Ryan's new plan, if implemented to realize the savings he is promising, would be more like "inhumane", not "mean".
And the best we can expect from Romney is that he'll govern like Shrub; handing out as much tax payer money as possible to his private business partners and their businesses, with occaisional bones to democrats to claim bipartisan support like with the Shrub tax cuts.
- GSpinks
March 21, 2012 at 1:03pm
oops, make that last sentence DEMOCRATS are less dishonest and tend not to foise yet more giveaways to rich people and oil companies...yadda yadda.
- WandreyCer
March 21, 2012 at 1:04pm
I have had personal experience identical to “VOUCHER MEDICARE.” When I retired, my company, by contract, guaranteed I would remain on its health insurance plan for life. But the Bush Administration permitted my company to legally renege. So it notified me that I would be eliminated from its insurance group plan (3,000 members) but that it would still pay me $182 a month (its group individual cost) toward insurance that I would have to buy myself. Generous? Hardly—they would escape inevitable rate increases required for enormous profits and outrageous executive compensations. Without being a group member, my insurance rate would soar. That is, if I could get it; by then I had a heart problem, so the cost of the only insurance that would cover me was impossible. For example: my prosperous neighbor with a pre-condition pays $1,700 a month. My Social Security payment is $1,400 a month, and I lost my nest egg in during the Bush era financial frauds that crashed the stock market twice. So I live in affordable Mexico. But Medicare won’t cover me for anything here, even though the cost of excellent medical services is 50% lower than in the US (and even though I pay $100 a month for Medicare, Part B.). So, unless I have enough warning of a heart attack to fly commercially to the US , I have only the choice of bankruptcy or passive suicide. But it is obvious jingoistic Republicans will reject Medicare coverage here by calling expatriates “ex-patriots.” Paul Ryan, his Republican accomplices and their mega-rich paymasters believe they are princes who are entitled to 80% of the nation’s wealth (just seven members of the Walton family control more wealth than the bottom 35% of US citizens) because the antecedents of most had the money, power and cunning to exploit the middle/poor classes. Republicans are right about there being a Class War. The rich are the aggressors, and they are winning the war to take America back to the 12th Century.
- Weston
March 21, 2012 at 1:08pm
Romney will do to the federal government what he did to many other companies while working for Bain; take over everything, over-leverage the shit out of it, pocket the money, and kick it to the curb to file for bankruptcy on it's own.
- GSpinks
March 21, 2012 at 1:10pm
The Ryan plan at least acknowledges that things are not sustainable. Obama knows it, he has just avoided being a leader about it and instead has decided to play politics. That is why them dems haven't produced a budget in over 1000 days. Does that sound responsible? Does that sound grown up? The left's white knight in all this, getting the rich to pay their fair share, doesn't come close to closing the gap. The CBO just reported yesterday that the "buffet tax" will raise $3B a year. Well under 0.1% of our total annual gov budget. That is nothing. All this ink spilled over $3B a year. It's laughable how much energy the left has put into this strawman. Now, Medicare pays each person about 3X what they put in. If you want medicare to be sustainable, then you really need to arguing (at least) for a 3X increase in medicare taxes for starters. That means your medicare taxes need to go from just under 2% to 6%. Maybe it's 5%, maybe it's 7%. Who knows. But we do know the math is simple. Either you jack up medicare taxes A LOT, or you cut the program. But arguing that the status quo continues gives you Greece. Like it or not.
- seattleeng
March 21, 2012 at 1:42pm
You should do an Obama ad Weston, what a disgraceful way to treat a human being. The modern "health insurance" racket kills people for not being rich.
- WandreyCer
March 21, 2012 at 1:45pm
-singlespeed and GSpinks It may be difficult to score a budget's affect on growth, but that doesn't mean independent economic analyses, such as those coming from CBO, should simply be ignored. What do you think formed the substantive basis for the 2009 stimulus? Ultimately, projections on growth with and without the stimulus. If growth doesn't matter or if you think the government can do anything without harming growth; the People's Budget of the Progressive Caucus may be of interest to you.
- jkodak
March 21, 2012 at 2:02pm
Seattle - if the Buffet tax is so damn low, no one should have any problem paying it then - and should clearly pay much more. Then the huge tax cuts Obama provided for the middle class will make more sense. He's not trying to fix Bush's deficit with this return to Clinton era tax rates - talk about a lame strawman. He's trying to address the systemic class warfare by touchy, pampered, entitled billionares against the middle class. No one is saying not to cut Medicare. You might want to check your facts, to put it politely. No one loves Mediscare politics more than the right. Every time Obama has mentioned changing Medicare, the right screams death panels. (Democrats will no doubt repay the favor after Ryan's suicide stunt here, thank you) when "cost controls" has been the right wing mantra for health care for a generation. The ACA attempts to fundamentally address this question at least in part by beginning a shift in emphasis away from Medicare - hence the lower costs this year. The right can't have it both ways - either Obama is a monster creating death panels or a left wing stooge wanting to pour money into Medicare as is indefinately. Fact is (I know the right is not fond of facts), it's obviously neither. The ACA is attempts to structurally address the problem in conjunction with insurance companies, the AMA and several nurses associations. It has not fixed the entire mess in one year and never claimed to be able to. It's a first step and it's working. Deal with it.
- WandreyCer
March 21, 2012 at 2:02pm
singlespeed How can you take the Ryan budget seriously? He has $6 trillion in unspecified deductions he intends to eliminate. Until those politically difficult issues are on the table, its really nothing more than a few pieces of a budget.
- Nusholtz
March 21, 2012 at 2:23pm
seattle, it's a little disingenious to claim that because 1 small tax isn't enough that raising taxes isn't the answer. There is no magic bullet when it comes to sustaining a humane society; it's a lot of hard choices that add up over time: Buffet Rule, Death Tax, Income Tax, Capital Gains Tax, tax loopholes, tax shelters, Health Care Reform, Federal Student Loan reform, unnecessary foreign wars, unnecessary domestic wars, Medicare fraud investigation and prosecution, IRS tax collection efforts, etc. And the math isn't necessarily simple.
For starters I don't accept your premise that medicare pays 3x in benefits what people put in; that's not even the point of insurance, let alone how the economics works out. Sure, maybe you'd like a HSA style system where people can only receive as much medical treatment as their account can afford, but you should at least be honest enough with yourself to come out and say that. Except that is functionally no different from if you're sick and poor, go somewhere we can't see you and die quietly; poor is simple a matter of an empty HSA, instead of an empty bank account. Yeah, the math is simple enough, but where's the humanity? The entire reason for insurance is to balance risk and reward, to avoid having to decide between being a medical/financial burden to your family, and suck-starting a shotgun out behind the barn. The problem I see is that people like you simply can't stand the thought of someone else getting to live, metaphorically and literally, off of your money...the math is simple enough...it's your money, not theirs, right? You call it simple math, I'll call it inhumane treatment, it is what it is.
- GSpinks
March 21, 2012 at 2:40pm
Cut military spending, for pete's sake. And not some sissy "we'll raise spending but not by as much" cut, I mean like a 25% across-the-board cut. Fun fact: we spend roughly the same as the next 14 highest military-spending countries combined. The fact becomes even more insane and infuriating when you consider that - other than China and Russia - the "top 15 spenders" is pretty much a list of the US and her allies. Until the gop gets on board with Dems on massive military cuts, we're going to continue to be headed toward oblivion, thanks not to spending on social programs or taxes being too low, but on national defense spending.
- Tristan
March 21, 2012 at 3:17pm
Unlike Mitt Romney, who "doesn't care about the very poor," Paul Ryan cares very much about them. He cares that they are sucking the "productive" members of society dry with their mammograms, food stamps and earned income tax credits. He cares that they sometimes receive unemployment compensation which allows them to feed their families or clothe their children. He cares that they receive rent vouchers that allow them to have a roof over their heads. Paul Ryan, like his hero, Ayn Rand, thinks constantly about the poor, and the harder he thinks, the more he hates them.
- GeoffG
March 21, 2012 at 3:20pm
Hey, did anybody else catch Chaitless saying he's only 24 years old? You are wise beyond your years, my friend.
- Tristan
March 21, 2012 at 3:26pm
OOps. SeattleEngHow can you take the Ryan budget seriously? He has $6 trillion in unspecified deductions he intends to eliminate. Until those politically difficult issues are on the table, its really nothing more than a few pieces of a budget. singlespeed How can you take the Ryan budget seriously? He has $6 trillion in unspecified deductions he intends to eliminate. Until those politically difficult issues are on the table, its really nothing more than a few pieces of a budget.
- Nusholtz
March 21, 2012 at 3:32pm
My thoughts exactly about Chaitless. Anyway, if Obama needs help you guys, Wandrey, awesomeness! - it's too true about Bush, his lies - cutting people off unless they have hundreds for private insurance - that's shameful. Anyway, you all should help Obama run for President, except of course Seattle, who doesn't seem to see ordinary people because they aren't poor enough yet (think Sudan). But, not to worry, when Ryan & Co get done with us...Meanwhile Rahm is trying to save this city which like so many is confronting the recession, the housing crash, all of it, head on, while the Republicans lie, fiddle and blame the poor.
- Sophia
March 21, 2012 at 3:41pm
Nush - "singlespeed How can you take the Ryan budget seriously? " Where did you get the idea I take the Ryan budget seriously? I don't, I didn't and I won't. I do think we (collectively) need to address some serious fiscal issues that face the country with regards to outlays on medicare/medicaid and social security. But I think that involved a balanced approach and discussion about what cuts are needed (and whom they most seriously affect) and couple that with raising taxes back to the Clinton era levels. There are a lot ways to fix the issues but the GOP thinks everything has to be balanced on the backs of the least fortunate and neither part asks the wealthiest (I'm talking those making more than $200K a year and up) to possible play a bit more in taxes. We need to take a serious look at our military expenditures and hopefully the drawdown in Afghanistan and Iraq will will allow those outlays to be put pack into the non-military budgets. We have to look at ways to make it easier for smaller businesses and start-ups to get going without the erroneous regulations that are in place to benefit larger corporations that can game the system and have laws enacted to protect them from competition. These are all issues that need discussion. But the shotgun approach the GOP takes to America consistently fails to address the issues in any meaningful and realistic way.
- singlspeed
March 21, 2012 at 5:51pm
Nush... saw you were talking to Seattle not me.
- singlspeed
March 21, 2012 at 5:52pm
singlespeed Sorry. A spirit has gotten into my keyboard and I have contacted a priest about an exorcism. Will advise.
- Nusholtz
March 21, 2012 at 8:07pm
Nush, you're in luck. I've combed through the details, and as it turns out exorcism is the one thing that's actually covered by the upcoming Santorum Administration Health Care Plan.
- Tristan
March 21, 2012 at 8:33pm
Wandrey writes: "Seattle - if the Buffet tax is so damn low, no one should have any problem paying it then " Are you dense? You are comparing the magnitude of an amount between a government and an individual? Do you really not understand this difference? The point is that what the Buffett taxes raises does not change the endgame. If we go broke in 2030, then we go broke in 2030 whether or not we're applying the Buffett rule. Ergo, spending more than 10 seconds discussing it is a waste of time. Discuss the items that will forestall going broke until 2050. But to wring your hands over it for for 6 months, and make it a central message at SOTU shows just how petty people can be about this. It's not about solving problems. It's about taking from those the stuff you want. As always, it is envy. Isn't it? Sophia writes: " that's shameful. Anyway, you all should help Obama run for President, except of course Seattle, who doesn't seem to see ordinary people because they aren't poor " Please, Sophia. I just want the numbers to work. Nutz writes: " SeattleEngHow can you take the Ryan budget seriously? He has $6 trillion in unspecified deductions he intends to eliminate." I support eliminating all deductions and credits. For people and business. A deduction and/or credit is the byproduct of lobbying. That is what lobbyists do. A special interest group pays a lobbyist to push through a favor. That favor becomes a law, and that law provides a credit or deduction to a special interest. Get rid of them all. When the tax bill arrives, take my income, subtract out a baseline cost of living, and then multiply that by the same number for everyone (perhaps two levels, as Ryan has proposed). That is fair, that is highly progressive. Unfortunately, it makes it impossible for congress to dole out and receive favors. If we collectively want to reduce the bite on poor people, then we raise the cost of living allowance. If we collectively want to increase the pain on rich people, then we raise the top rate.
- seattleeng
March 21, 2012 at 9:09pm
It isn't that simple is it? Simply putting poor people on welfare, basically; without investing in infrastructure, R&D, keeping the country running? The numbers will never work in that scenario and the poor will always be poor because funding for education will not be there, health care will not be there, elder care, ditto, so the middle class will be poor also and the country will fall apart. Plus there's the shaming of poor people, the sick and women that's going on lately - C'mon Seattle, think this through. Please. Ryan is bad enough but people who support him? Oy.
- Sophia
March 21, 2012 at 11:42pm
Chaitless: So YOU'RE the New Republic subscriber under 50!
- Claris
March 22, 2012 at 7:06am
seattleeng: " The CBO just reported yesterday that the "buffet tax" will raise $3B a year. Well under 0.1% of our total annual gov budget. That is nothing. All this ink spilled over $3B a year. It's laughable how much energy the left has put into this strawman." Actually, it's the stat that's the strawman. Why is percentage of the total budget the relevant statistic? Why not the effect that it, along with other measures, would have on reducing the deficit over time instead? (Another canard I've seen floating around is the effect on the yearly numbers when everyone knows or should know that this problem has to be addressed in at least a decade-long plan.) Or the consequence it would have in reducing budget cuts to R&D which are important for future growth? Yes, in the scale of things, $3 billion a year may not sound like much. But that doesn't mean we shouldn't do it. I can think of a lot of things to do with that revenue. Add in eliminating the carried interest loophole, and then you've got something going. This is akin to the idea of tort reform to hold down medical costs. From what I've read, malpractice insurance is not a main driver of the increasing expenses in our system (wrong incentives with fee-for-service, administrative messes, inappropriate application of market theory). But I've come around to the position that just because it alone won't solve the problem doesn't mean that we should disregard it. "If you want the middle class to enjoy a tax break, first you must make them pay taxes." That's not the issue. It's that Ryan is proposing tax breaks at all when his hair is supposedly all on fire about the debt. And then those breaks go to those who least need it. So there appear to be bigger priorities for him than the debt; he just won't admit it. "It's not about solving problems. It's about taking from those the stuff you want. As always, it is envy. Isn't it?" No, it isn't. We've been through this many times before. It's about fairly apportioning the costs of running government to achieve the kind of society we say we want. But no matter how many times the argument is made, some people continue to refuse to accept that possibility.
- dsimon
March 22, 2012 at 9:44am
4% of GDP in 2050 will be multiples larger in absolute real dollar terms than 4% of current GDP as today's is multiples more compared to 4% of GDP in 1970. That's what comes from healthy economic growth - something but Obama and Cohn are unfamiliar with. Cohn has a lot of credibility. After all, he was selling all the nonsense being peddled about Obamacare - how it was going to save money, bend down the cost curve, allow everyone to keep their current coverage policies if they liked them - that in just 2 years has been rendered a joke. No wonder Obama is not emphasizing this great accomplishment during his non-stop political campaign know as his presidency.
- NHRDS
March 22, 2012 at 10:46am
dsimon, while I appreciate your view, I think you are overstating the benefit of doing "every little bit." If the so-called Buffet rule would produce one tenth of one percent of the budget in revenue, it might as well be zero. You would need four thousand revenue equivalents of the Buffet rule to produce budget balance. In contrast, the simpler thing would be to allow the Bush tax rates to expire in toto, which we know would produce a gusher of revenue, though about 75% from the middle class, since that's where bulk of the cuts fell in dollar terms. (I'd cap the top rate near 30%, but equalize corporate, investment, and carried interest taxes.) We are taxing across the board too little (and in my view spending too much, but that's a different subject) and relying on the most volatile sources for revenue.
- ds111
March 22, 2012 at 11:27am
Did anyone catch the extended on-line interview with Jon Stewart and the anti-tax man Grover (I'm not a muppet) Norquist? It's quite the interesting interview and that Stewart cannot get Grover to see past his own nose with his "no tax raising" pledge Grover's convinced a majority of GOP congressmen. The salient part of the interview is that Grover is even afraid to say in an honest way what would need to be cut to bring spending down and to admit that supply side economics doesn't work, even when presented the fact that during the Clinton era we had higher tax rates and higher growth while during the Bush years we had lower taxes and exploding deficits. http://www.thedailyshow.com/full-episodes/mon-march-12-2012-grover-norquist
- singlspeed
March 22, 2012 at 1:26pm
ds111: I agree that taxes should go up across the board, especially when revenues are at 60 year lows as a percentage of GDP. But I don't think that the relative portion of the Buffett Rule should really matter as to whether it should be implemented. Taxes are about fairly apportioning the costs of running government. When the top 400 earners are paying an average rate of about 18% in federal income taxes, then I think the principle of fair apportionment is violated. I know some people who made over $200,000 two years ago and paid zero in income taxes (tax-free bonds, deductions for mortgage interest, children, and charitable giving, plus an exemption for a certain amount of capital gains). Those kinds of results destroy trust and make others resent paying their taxes more than they already do. That being said, I'd much more favor a tax code that is cleaner and so avoids these perverse results than layering the Buffett Rule on top of the present system.
- dsimon
March 22, 2012 at 5:22pm
singlspeed: "The salient part of the interview is that Grover is even afraid to say in an honest way what would need to be cut to bring spending down and to admit that supply side economics doesn't work" There's a similar Norquist interview from This American Life, http://www.thisamericanlife.org/radio-archives/episode/459/what-kind-of-country (Act Two). The interviewer said he asked four times what should be cut, and Norquist would respond about reforming government and forcing it to be more efficient. Concrete proposals were mostly lacking. As Jonathan Chait has pointed out repeatedly, the size of government is not determined by taxes; it's determined by spending. And we have seen proof that cutting taxes does not mean reducing outlays (see Bush, W.). So Norquist's obsession with taxes as a means to cut government doesn't seem to have much basis in, well, reality (and that's assuming that smaller government for the sake of smaller government must be a good thing). And yet so many people in Congress fear this guy instead of standing up to him. It's sadly pathetic.
- dsimon
March 22, 2012 at 5:32pm
DSimon writes: "This is akin to the idea of tort reform to hold down medical costs" Bullseye. Except now imagine that tort reform had been the center piece of reform. It was not. Not even close. But if it was, it would have been equally moronic to spend so much time on that topic. Let's spend 90% of our time debating those things that will offer the most relief. Since Buffett will not provide ANY measurable relief, it's not even worth discussing until we get down to the minutia. And make no mistake, if we get to the end and it comes down to getting the last $3B from the likes of Buffett or from the likes of John Q Public, I'm the first to say let's take it from Buffett. But what Obama just put us through by making Buffett front and center of his policy is pure politics in the most destructive way possible. Dsimon writes: "No, it isn't. We've been through this many times before. It's about fairly apportioning the costs of running government to achieve the kind of society we say we want. But no matter how many times the argument is made, some people continue to refuse to accept that possibility." It is a topic that will vex man eternally. And you think we've settled this discussion previously? A few paragraphs here and there and you think all the bases have been covered? Be serious. I'm with DS111, the first step is to let Bush tax cuts expire (once we see enough light at the end of the tunnel), but that will be a huge tax hit on the middle class. But indeed that's where the money is. Of course, having to admit the Bush tax cuts will be a massive tax increase on the middle class means you must admit that the Bush tax cuts overwhelmingly benefited the middle class (and further increased progressivity). And I'm not sure dems ever did acknowledge that explicitly.
- seattleeng
March 22, 2012 at 6:10pm
seattleeng: "Since Buffett will not provide ANY measurable relief, it's not even worth discussing until we get down to the minutia." I can think of a lot of research that could get done for $3 billion a year. I can think of a lot of bridges and roads that could get built or fixed for $3 billion a year. I can think of a lot of teachers who could get hired with $3 billion a year. So I think it's well worth talking about. Much more time has been expended talking about far less. "And you think we've settled this discussion previously? A few paragraphs here and there and you think all the bases have been covered?" We've spent pages and pages addressing your assertion that it's all about envy. I and others have written copious amounts on how taxing the affluent at higher rates than the less affluent need not be based on envy and in fact is not based on envy. No amount of reason or evidence seems like it will change minds here. So I'm not going to waste more time on it. "that will be a huge tax hit on the middle class. But indeed that's where the money is." In 2009, the top 10% made 46% of the nation's income. http://www.taxfoundation.org/news/show/250.html That's people who make $112,000 or more, which is more than twice as much as the nation's median household income. http://www.kiplinger.com/features/archives/how-your-income-stacks-up.html So I wouldn't say that the middle class is "where the money is" even if everyone will have to kick in a little more if we're going to get our fiscal situation under control (though then we'd have to argue about what "middle class" means--one can be in the "middle" and not doing well even on a relative basis depending on the income distribution).
- dsimon
March 22, 2012 at 9:13pm
Plus, seattleeng, as I wrote above the Buffett Rule worth discussing regardless of how much revenue it would generate because it goes to the integrity of the tax code. When people see the loopholes and how they are taken advantage of by those who least need them, it reduces trust, increases hostility, and makes people more cynical. So yes, I think the system needs an overhaul. But that doesn't mean that discussing Buffett Rule is therefore inconsequential.
- dsimon
March 23, 2012 at 12:25am