Now that we are sure that Paul Ryan is going to be the VP for Romney, I thought it was important to revisit the Paul Ryan "Path to Prosperity" Budget Plan.
To be honest, the only thing I knew about the plan was snippets that I either read in varying newspapers or at political blogs. I figured that I would take the morning and actually read the proposal.
It can be found at: http://budget.house.gov/...
A summary written by Paul Ryan for the lazy can been found at: http://online.wsj.com/...
My idea with this diary is to make sure each of us is armed with the facts that are contained in this plan. We should be able to rebuttal specific details to our friends and neighbors.
Please feel free to clarify or argue against any the summaries that I have concluded after reading the plan.
Let's get started.
Providing for the Common Defense: (starting at page 17)
Paul Ryan would like to increase the 2013 military budget by 554 billion dollars.
That amount would raise every year to reflect inflation.
He would not cut the budget at all during war time.
He would also like to exclude defense from any sequester savings.
I don't think there are any surprises in there. It is interesting to compare this increase of budget versus other areas that he is more than willing to cut.
Restoring Economic Freedom (starting at page 23)
The government would not longer provide subsidizes for "green" energy companies.
The government would open up the US soil for further oil/coal/etc exploration. Example sited is the Keystone XL Pipeline.
The EPA would be significantly scaled back. Current regulations make it "hard" for business to run.
Freddie Mac and Fannie Mae would privatized. The government would not longer subsidize mortgages. Mortgages would be provided solely by the private market.
There is also a piece about The FHA’s Mutual Mortgage Insurance Fund’s. (I don't know enough about this fund to offer a comment. Would love more information)
Repeal the healthcare act.
Paul Ryan would impose a pay freeze until 2015 on all federal employees. He also is planning to cut 10% of the workforce, as well as renegotiate federal benefits with employees contributing a large share to retirement benefits.
Increases the budgets for anti-fraud division.
Fire sale of federal assets. This includes millions of acres of federal land, federal building, federal cars etc...
Cut federal subsidizes to Farming communities.
The things that stood out to me was the cutting of farm subsidizes. Very interesting...Does Kansas know this? Also the fire sale of federal land. Say hello to condo's on Half Dome brought to you by private developers.
Repairing the Social Safety Net (starting at page 34)
Return Medicaid to states in the form of a block grant as well as cut the funding for the next ten years.
(For those unfamiliar with a block grant..see http://en.wikipedia.org/...)
Supplemental Nutrition Assistance Program(Food Stamps) will also be sent to the States as a block grant. There would be monitoring of the program to make sure no fraud was happening.
Welfare and any other kind of state assistance would be granted only with work/job training and there would be time limits.
Paul Ryan would cut off access to federal subsized student loans. He argues that ease of financial aid has caused college tuition to rise. He would also reduce the amount for Pell Grants.
He would soften regulation of "for-profit" institutions. Those who can't get student loans would be able to take online courses.
Reduce the number of job training programs. Claims they overlap each other.
The big thing that stands out to me is that if you are poor, you are getting screwed by this plan. Under Ryan's plan, I would have be unable to go to college. I would have not had access to federal student loans and would have had to rely on the private sector. Trust me when I say, no private lender would have given me a loan. My only other option would have been to take "online courses" while I worked to save up enough money to go to school.
Strengthening Health and Retirement Security (starting at page 45)
I'm going to paraphrase my understanding of this section.
Every person under the age of 55 starting in 2023 will not get traditional Medicare. Instead every year, insurance companies will submit competitive bids on a "Medicare Exchange". The second-‐least expensive program will set the annual subsidy amount that the federal government will pay. People will be able to choose one of the plans on the system. Any plan that cost over the subsidy comes out of your pocket. There are no specifics on what these plans will provide or cover. You can also use your subsidy as a pay as you go credit in a "fee-for-service" plan. Any amount not used will be reimbursed to you.
People currently on Medicare will not be affected.
Medical malpractice lawsuits would be capped.
He would get rid of the IPAB ("death panels")
The budget offers no specific plan for Social Security. It does complain that people are living longer and retiring earlier, therefore creating a burden for younger workers. It suggest a panel that will look at solutions to "fix" Social Security.
Pro-Growth Tax Reform
Paul Ryan's plan would create two tax rates. 10% and 25%. It does not state at what income level the 25% starts.
It reduces the corporate tax rate to 25%
It "expands" the tax base.
It eliminates most tax deductions. It does not state which ones he is keeping.
Shifts to a “territorial” tax system rather than a "worldwide" tax system.
A few points. First "expand the tax base" is code for forcing low income earners to pay federal taxes. My suspicion is that the tax deductions that will not be eliminated will be ones that are used mainly by high earners.
The second point is the "territorial" tax system. As an ex-pat, I know this means that corporations incorporated outside the US will not be subjected to even the 25% corporate tax rule. So all the corporations registered in tax havens will have an tax rate of 0%. The current system requires all income by US residents to be declared every year.
Please see the following comment on "territorial" tax system. http://www.dailykos.com/...
As an ex-pat I still have to file a tax return with the IRS. If we had a "territorial" system for individuals, I would pay the tax rate of the country I live in and if that was less than my US rate, I would not have to pay extra. Notice that is proposal is ONLY for corporations.
Change Washington's culture of spending
Get rid of the discretionary sequester and replace it with a cap.
All government programs would have a cap.
All increase in programs would have to be offset by a spending cut. (I am assuming that defense is excluded from this)
All programs would have to be projected longer than 10 years by the CBO.
Every program would be reviewed each year and none guaranteed funding. There would be no baseline and therefore no inflation increases to funding.
Project cost for Social Security, Medicare and Medicaid out to 75 years.
This doesn't say much about which programs would be cut. However after reading online, it is apparently hidden in the Appendix. Please see the Washington Post article for more details...http://www.washingtonpost.com/...
Lifting the Crushing Burden of Debt (starting at page 75)
This section doesn't offer any specific solutions other than to say look at the amount we owes those scary foreigners. It basically says that if you follow the above plan, we will have a budget surplus by 2024.
That in a very long nutshell is what the plans says. Any questions? Any comments?