Rep. Ryan's Budget Is Upside Down

Mar 21, 2012

House Budget Committee Chair Paul Ryan introduced his budget proposal for FY2013, including an outline of his ten-year plans to reduce the federal debt.

The plan is upside down.

  • We have military budget that is growing out of control.
    The Ryan budget proposes increases... starting next year.

  • We have a wealth gap in this country that is exacerbated by tax policy, and one of the lowest effective tax rates -- for individuals and corporations -- of any developed country in the world.
    The Ryan budget proposes further tax cuts for the very wealthy.
  • We have documented hunger in every congressional district in the country.
    The Ryan budget proposes cuts in food assistance.
  • Nearly 40 percent of low wage workers cannot get or cannot afford health insurance.
    The Ryan budget proposes to cut more than $800 billion from the Medicaid program -- for low income families and elders -- and replacing it with a smaller program to be run by the states. He also proposes ending the one "sure thing" for seniors -- Medicare -- and replacing with vouchers to help low income senior purchase insurance on the private market. He proposes an end to the Affordable Care Act before it even really got started.
  • We have veterans coming home -- some of them wounded -- who cannot find housing, jobs, and sometimes adequate health care.
    The Ryan budget places double pressure on funding for domestic programs -- which includes veterans' programs, as well as housing and jobs programs -- making it harder for the nation to welcome its veterans home.
  • Millions of us have yet to fully recover from the recession.
    The Ryan budget would force further cuts in job training, education, and direct job creation programs, and continue tax incentives for mega-corporations to move jobs overseas.
  • Two agencies (the State Department and the Agency for International Development) are responsible for most of the programs that could help prevent war, saving taxpayers $60 in potential war spending for every one dollar invested in war prevention.
    But Paul Ryan’s budget proposal would slash modest investments in these war prevention tools by nearly 20 percent over the next three years.
  • We have a fragile environment that needs the focused attention of our and other governments.
    The Ryan budget would cut spending for environmental protection, and continue tax subsidies for oil and gas companies.
  • We have a national debt that's so big it's scary.
    The Ryan budget would increase the debt by $4 trillion.

  • The Big Numbers

    By 2022, the plan would reduce federal spending by $4.1 trillion while increasing military spending, and reduce revenues by $4.4 trillion, compared to the Congressional Budget Office (CB0) current law baseline. The federal debt would rise by about $4 trillion over that same period.

    Military spending would be protected from the sequester and would increase by $23 billion or 4.3 percent ($531 billion in 2012 to $554 billion) in 2013. Over ten years, military spending would increase by $228 billion.

    How to Get There from Here

    Additional cuts in domestic programs would be required to make up for the Pentagon budget increase, and for the Pentagon's share of the cuts required by the sequester. To make those cuts happen, Ryan proposes to use a process called "reconciliation."

    In that process, the budget resolution includes instructions to named committees, telling them to come up with a certain assigned amount of spending cuts. In the reconciliation process, a committee that authorizes a program -- such as a food assistance program -- can change the parameters of the program to make it cost less. Eligibility could be tightened, formulas determining benefits could be reduced, conditions (such as "workfare") could be added.

    All the assigned committees are required to submit their decisions to the Budget Committee, which then combines them into a "reconciliation bill" which is considered by the full House and Senate before the beginning of the next fiscal year (i.e. by September 30, 2012) under an expedited process that does not allow for super-majorities or filibusters (in the Senate.)

    The Ryan budget nominates the following committees to be given reconciliation instructions:

    • Agriculture -- which authorizes food assistance programs as well as agricultural subsidies

  • Energy and Commerce -- which authorizes health programs, subsidies for renewable, fossil fuel and nuclear energy, Clean Air and Clean Water programs, and low income home energy assistance
  • Financial Services -- which authorizes financial oversight programs, public and private housing, Fannie Mae and Freddie Mac
  • Ways and Means -- which authorizes revenues, Social Security, Medicare, Medicaid, and income support programs.
  • Oversight and Government Reform -- which authorizes civil service and government pensions
  • Judiciary -- which oversees courts and therefore, probably, medical malpractice litigation
  • While the actual program cuts would be left up to these six committees, Ryan suggests that they consider cutting federal pensions, and health care programs, as examples. He also suggests that some non-budget related legislation, such as medical malpractice reform, be included in the reconciliation packages.

    The cuts required by reconciliation process would be on top of the cuts already required by the Budget Control Act... about $96 billion in 2013 from non-security programs.

    The Ryan budget proposal is being debated on the House floor this week. It is expected to pass, perhaps with a few amendments. The Senate is not likely to take it up at all, but the individual cuts proposed in a wide range of programs will be lurking just off stage right, ready to take their place in Senate debates as amendments or bargaining chips.

    The budget may be upside down, but it should be viewed with caution and watched very closely. It could fit right in, in the 112th Congress.

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