House Republicans recently passed a budget plan they claim will reduce the deficit by cutting (unspecified) discretionary spending from 12 percent of GDP in 2010 to 3 percent by 2050.
The New York Times said the plan, authored by Congressman Paul Ryan, would cut government spending by $4.3 trillion and called it “the most regressive social legislation in many decades.”
That’s because, as the nonpartisan Congressional Budget Office reported, the plan cuts social services to pay for tax cuts, not to cut the deficit. In fact, the CBO estimates that Ryan’s plan would lead to bigger deficits and more debt over the next decade.
Nobel economist Paul Krugman calculates the Ryan plan would cut taxes by $2.9 trillion, overwhelmingly for the wealthy. To fund those tax cuts, the Republican plan would gut Medicaid by turning it into block grants to states and convert Medicare into a voucher system that the elderly and disabled would use to buy health insurance. But the vouchers will grow more slowly in value than the cost of health care, meaning poor seniors will inevitably get less health care.
So Ryan’s program would end Medicare as we know it and could leave 50 million people without health coverage. The CBO estimates that most middle-income retirees would have to pay almost half of their income to purchase a Medicare-equivalent insurance package by 2030; those with a wrong medical profile could not buy insurance at any price (absent the Affordable Care Act).
Moreover, health insurance is not health care; it is paying for promises that private insurance companies have every incentive to weasel out of, by targeting the expensive sick for “rescission” (cancellation), by limiting/rejecting claims (“medical losses”) and by (mis)using your premiums to pay extravagant executive compensation, such as the $1.6 billion payout United Health gave ex-CEO “Dollar Bill” McGuire. You have to wonder how many people died because United Health cut them off so that it could pay one executive $1.6 billion.
Bruce Bartlett (The Fiscal Times) has termed Ryan’s plan a fairy tale utterly disconnected from the real world, backed up by make-believe numbers and unreasonable assumptions. It depends on phantom cuts and voodoo economics — the thoroughly discredited claim that large tax cuts will actually increase revenue. Former Reagan Budget Director David Stockman labeled Ryan’s budget as “flimflam and swindle.”
Ryan’s plan is really a continuation of the “starve the beast/trickle down” policies to redistribute wealth upward I outlined last July (“My View: The Republicans’ class war”).
And the plan is working. According to the Tax Foundation, the richest 1 percent has doubled its share of total income from 19 percent in 1980 to 38 percent in 2008, and tax rates on the richest 400 people have fallen from 26 percent in 1992 to 17 percent, says the IRS.
Any serious plan to attack the deficit should focus on Bush’s tax cuts; the National Security State and its Perpetual War; $400 billion in tax loopholes and another $400 billion in uncollected taxes every year; the maze of shelters, tax credits and subsidies that result in 68 percent of corporations paying no U.S. taxes; the estimated $150 billion to $1 trillion in corporate welfare for big oil, gas, coal and agriculture/ethanol; and a sweetheart prescription drug bill that prohibits Medicare from negotiating drug prices (the VA saves 40 percent by negotiating).
Other industrialized democracies all have some form of universal health care and pay about 10-11 percent of GDP. They get better care as measured by all 16 of the bottom-line public health statistics than America, which pays 17-18 percent of GDP for medical care that excels only in high-end interventions. What they do not have, however, are unfettered fee-for-services systems that allow the medical-industrial complex to prescribe its services and set its own prices, and a near-monopoly private insurance industry that arbitrarily sets premiums and skims off hundreds of billions from health care for its benefit.
George Lakoff has written that “All politics is moral.” Indeed, 70 percent of the New Testament deals with social justice, which seems to have escaped the notice of the evangelicals’ putative political party.
Studies show that some 20,000 Americans die in midlife every year of treatable illness because they can’t afford medical care. That’s not right. The USDA recently reported that 50 million Americans regularly go hungry. That’s not right either. But the Republicans want to cut programs that help low and middle-income people in order to provide more tax breaks for the rich and payouts for the health industry.
That’s the politics of greed.