Subject: Ezra Klein on Ryan Budget
From: "Eric Schwerin" <[email-masked]>
To: "Hunter Biden" <[email-masked]>, "David Schwerin" <[email-masked]>
Date: Thu, 22 Mar 2012 07:20:50 -0400

I don't think Paul Ryan intended to write a budget that concentrated its cuts on the poorest Americans. Similarly, I don't think Mitt Romney intended to write a budgetthat concentrated its cuts on the poorest Americans. But there's a reason their budgets turned out so similar: The Republican Party has settled on four overlapping fiscal commitments that leave them with few other choices.
The Republican plans we've seen share a few basic premises. First, taxes are too high, and must be cut. Second, defense spending is too low, and should be raised. Third, major changes to entitlement programs should be passed now, but they shouldn't affect the current generation of retirees. That would all be fine, except for the fourth premise, which is that short-term deficits are a serious threat to the country and they need to be swiftly cut.

The first three budget premises means that taxes and defense will contribute more to the deficit, and Medicare and Social Security aren't available for quick savings. That leaves programs for the poor as the only major programs available to bear cuts. But now cuts to those programs have to pay for the deficit reduction, the increased defense spending, and the tax cuts. That means the cuts to those programs have to be really, really, really deep. The authors have no other choice.

In Ryan's plan, for instance, revenues are approximately $2 trillion below the levels in Obama's budget, spending on defense is about $200 billion higher, Social Security is unchanged, and Medicare is about $200 billion lower. So that's approximately $2 trillion in lost revenues that need to be made up -- and then Ryan reaches for more than $3 trillion in deficit reduction atop that.

So the cuts to programs that mainly help the poor are correspondingly deep. The $1.5 trillion the Affordable Care Act was going to spend on subsidizing health insurance for low-income Americans is gone. But then Medicaid and other non-Medicare health programs take an $800 billion cut on top of that. Education and worker training loses $200 billion. Income security loses $800 billion. These are huge cuts.

And that's just in the first 10 years. As time goes on, the scheduled cuts become much deeper in programs for the poor than in programs for the rich. Medicaid, for instance, is only allowed to grow at the rate of inflation, while Medicare can grow at GDP+0.5 percent, which is substantially higher. Food stamps also see their growth capped at a low rate, while Social Security is left untouched. And while Ryan does take aim at tax breaks that he says benefits the wealthy, he intends to close them and use the proceeds to fund a tax cut.

As I said at the top; I don't take this as evidence that Paul Ryan wants to balance the budget on the backs of the poor. I take it as evidence that, given the set of commitments Republicans have made to their base, he didn't really have a choice. It was the only way to make his numbers work.

But that doesn't make the end result any different: Ryan's budget asks for enormous sacrifice from, say, disabled Medicaid beneficiaries even as it appears to provide enormous tax benefits to wealthier Americans. The same is true for Romney's budget, and, in even more exaggerated ways, for the fiscal promises made by Newt Gingrich and Rick Santorum. The Republican Party has backed itself into a fiscal strategy in which this kind of concentrated sacrifice on the part of the poor is the only possible path forward.

Eric D. Schwerin
[email-masked]

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