While there are many controversial national and international issues currently being debated in Washington D.C, few are as contentious and foreboding for the disability community than the proposing major revamping of the Federal Budget. Somehow Republicans viewed the voter anger or apathy in the November election as a “public mandate” for them to pursue a radical agenda. Thus far, public reaction to their proposal to “Kill the Medicare and Medicaid Programs in Order to Keep Them Solvent” could be a pivotal issue as public attention focuses more on what Republicans are proposing to do. The devil is always in the details.
House Republicans are moving aggressively forward on their 2012 Budget Resolution that would make massive changes in the way that the Federal Government plays its traditional role as the guardians of the public good. Labeled as the “Ryan Budget” to reflect the author of the budget resolution, Rep. Paul Ryan (R-Wis.), the bill passed the House on April 15th along party lines 235-193, with only four Republicans voting against the proposal.
It is highly unlikely that the Ryan Budget will be adopted in the still-Democratic controlled. However, it is important to pay close attention to the various proposals that include, among other things, major changes in Medicare and Medicaid, privatizing programs, the utilization of Block Grants for many programs, and tax cuts for the wealthy and corporations. Various components will be featured in other budget alternatives, so it is necessary to gain a better understanding of the impact they may have upon the disability community.
The Ryan Budget will be the defining issue in the 2012 Congressional and Presidential campaign trails. Democrats are hopeful that by highlighting the clear political and policy differences they will win back the House. Messaging campaigns and GOTV efforts are already being developed commercials. The contrast between how the two parties view the role of the Federal government in the daily lives of Americans has never been this stark or contentious.
Republicans counter that it is misleading to characterize the Ryan Budget as promoting privatization and claim that it is necessary the reduce the Federal Budget Deficit and make Medicare and Medicaid solvent. Immediately after its passage, political pundits, pollsters, and fiscal Think Tanks have begun analyzing the details and its impact on the economy.
The following is a summary of some of the key issues and analyses. This Blog gives you the option to simply read the headlines and short summary. However, if you are interested in reading the full blown reports, a link is added for your convenience.
In many, but not all, cases the information is summarized from or otherwise attributed to other writers of the various articles and reports. Where there is no such attribution, the text reflects my own research or opinion on the issues.
Under the Ryan Budget, “Tax Reform” Places Top Priority on High –Income Tax Cuts and Ignores Deficit Reduction
The most recent analysis highlighted in this Blog dated April 26, 2011 by Chuck Marr and Gillian Brunet of the Center on Budget and Policy Priorities concludes that the Ryan Budget ignores real deficit reduction and places a greater priority on cutting taxes for higher-income taxpayers. They found that the Price Tag for the proposal to make the Bush era tax cuts for the wealthy taxpayers permanent and to continue other tax breaks would be nearly $4 trillion over 10 years. In addition, the Ryan Budget would propose an additional series of tax cuts for the wealthy and corporation that would cost of an additional $3 trillion over that period.
They presume that the new tax breaks would be offset by additional unspecified spending reductions. In other words, the Ryan Budget finances these tax cuts with extremely large budget cuts, including cuts for people with low or moderate incomes.
The proposal would also reduce top individual and corporate tax rates to 25 percent and would rescind the health care reform law’s Medicare payroll taxes on high income people. So, once again it is clear that Republicans have a unique definition of “tax reform.” The common characteristics are that they are very costly and that they would disproportionately or exclusively benefit those with high incomes.
What does this mean for the underlying public sales pitch that the Ryan Budget will reduce the Federal deficit and benefit all taxpayers? According to the Urban Institute-Brookings Institution Tax Policy Center (TPC), even if the House follows through on the commitment to offset $2.5 trillion of these costs by eliminating loopholes, the net result would most likely make the United States Tax Code more regressive than it is today.
According to the TPC report “[r]educing the top income tax rate to 25 percent would primarily benefit households with the highest incomes. For example, a family with two children that earns $850,000 would receive an annual tax cut of $61,200 from lowering the top rate to 25 percent, which would be in addition to the $31,000 the family would get from extending all of the Bush tax cuts. And family with $8.5 million in earned income would receive a tax cut of $1.64 million a year from the reduction in the top rate.
In contrast, 95 percent of Americans would receive no benefit at all from lowering the top rate to 25 percent, because they would already be in the 25 percent tax bracket or a lower bracket (assuming that the Bush tax cuts were extended, as the House budget envisions).”
To read the entire report, go to: