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The Democrats threw down the gauntlet at their convention in Charlotte this week, putting health care front and center and warning the Republicans that they won’t get away with more of the health care fear-mongering they’ve been stirring up for years. This strategy was solidified on the second night of the convention when President Bill Clinton, in the words of former George W. Bush speechwriter David Frum, “detonated the H-bomb of the 2012 campaign: the Medicaid issue.”

President Clinton electrified the delegates and millions of television viewers with a stark warning about the GOP’s plans: “They also want to block-grant Medicaid, and cut it by a third over the coming 10 years,” he said. “Of course, that’s going to really hurt a lot of poor kids. But that’s not all. Lot of folks don’t know it, but nearly two-thirds of Medicaid is spent on nursing home care for Medicare seniors who are eligible for Medicaid.”

Clinton’s observations on Medicaid exposed the big lie that Romney and Ryan’s health care plans won’t harm current seniors. The truth-challenged Republican candidates always point out that their plan to voucherize Medicare and increase the medical costs of seniors by thousands of dollars a year won’t affect anyone who has already turned 55. But they don’t just want to eliminate Medicare as we know it. The Romney-Ryan block-grant scheme would make immediate and steep cuts to Medicaid that would lead to as many as 30 million Americans getting dumped from the program. Two-thirds of Medicaid spending is for seniors and people with disabilities.

Ryan and Romney also dodge another part of their plan that will hurt current seniors — repealing Obamacare, which will re-open the Medicare prescription drug “donut hole” and eliminate prescription discounts that have already saved 5.4 million seniors $4.1 billion.

When Romney and Ryan push for deep cuts to Medicare and Medicaid, it isn’t about health care policy or deficit reduction – it’s to give massive tax breaks to the richest Americans. These unconscionable tax cuts average up to $250,000 for millionaires.

Ever since Ryan proposed his draconian budget in 2011, we have been pointing out that the Affordable Care Act and the Medicaid expansion it includes are as important as Medicare to the economic security of seniors and their middle-class families. This is no courageous innovation from the GOP vice presidential candidate, as his press agents would have us believe. It’s a cost-shift of billions of dollars that will bludgeon state taxpayers and dramatically limit care to children, the elderly and working families. (more…)

Fifty years ago, when an exasperated Joseph N. Welch defiantly interrupted the drunk-with-power chief inquistor, Sen. Joe McCarthy, and asked, “Have you no decency, sir? At long last, have you left no sense of decency?,” the entire gallery burst into applause, signifying an abrupt end to an era of leaders who had abandoned their oaths in exchange for their own personal glorification.

In light of recent events, one might say, it’s once again time for that question to be dusted off and poised to the entire GOP.

As we’ve come to expect, the House passage of the Ryan Bill, which, at its core, is nothing more than the GOP’s latest installment of How to Cut the Deficit by Helping the Rich and F&%king the Poor, is filled with all the usual ridiculousness brought on behalf of a party that’s been deemed “the farthest right they’ve been in a hundred years.” And, if that wasn’t bad enough, this time, they’re trying to do it on the backs of the sick and the elderly.

The Republican plan to cut 6.1 trillion dollars in spending does not ask for a single cent from the richest class. Nor do they ask for a dime from the defense budget or the big oil companies. Nope. All the spending cuts designed to “save our children’s future” will come from the pockets and protection of health care, because, that’s where the “real” problems lie.

The Republicans of today have no problem whacking Medicaid by 1/3, thereby exposing future generations of seniors to financial ruin, while leaving the rest of us to rely on “vouchers,” which – surprise – decrease in value over time. Seeing just how far they can go, they continue their assault on reason by suggesting we cut taxes for the upper class and put them back to where they were when their ole pal “W.” was in office.

Is it possible that an entire group of people are this clueless? The early 20th century political journalist, H.L. Menckin, probably said it best when he said, “Not all conservatives are stupid, but all stupid people are conservative.”

It’s no secret, Republicans today are unabashed in their shameful quest to protect the wealthy and the titans of industry. They’re so far “off the grid” at the moment, it’s easy to believe it would be even more gratifying if this could be achieved while simultaneously taking away what little remaining security those who’ve worked a lifetime have left. (more…)

What the Republican budget proposal by Rep. Paul Ryan doesn’t say is in many respects more ominous than what it says—and on taxes, perhaps more indicative of the truth. For while the Ryan slash-and-burn budget proposal doesn’t come right out and say it, it could have some low-income and middle-class people paying higher taxes than they would under a more progressive proposal that is not tilted toward the wealthy.

There is practically no other way to make the numbers add up in a budget that would create or continue a total of $10 trillion in tax cuts to the wealthy and corporations over 10 years while making cuts in government spending so deep that the economy would be slowed, resulting in 4.1 million fewer jobs created over 10 years.

The nice-sounding tax-cut sizzle in the Ryan Republican plan is a simplified tax structure on earned income, with 10 percent and 25 percent tax brackets, plus the lower capital gains rate of 15 percent. Ryan also promises the elimination of deductions and credits that he, in his “Road to Prosperity” budget manifesto, denounces because they direct “resources to politically favored uses, creating a drag on economic growth and job creation” and even “take taxes paid by hardworking Americans and issue government checks to individuals and corporations who do not owe any taxes at all”

But where one might expect to find the steak lurks a poisonous tax snake instead. A bulletin issued last week by the Coalition for Human Needs raised the relevant questions:

House Budget Committee Chairman Paul Ryan (R-WI) asserts that the new tax cuts will be paid for by cuts to other tax expenditures—that is, the deductions and credits that make up so much of the tax code. But while the budget is fairly specific in recommending cuts to services, it is utterly silent on which tax expenditures it would end. Deductions for mortgage interest? state and local taxes? 401(k) contributions? charitable giving? employer contributions to health insurance? Mum’s the word. These and more tax breaks would have to be eliminated altogether to pay for the tax cuts proposed in the budget. (more…)

I was struck by the juxtaposition of this unfortunate analysis of Rep. Paul Ryan’s budget by New York Times columnist James Stewart and Paul Krugman’s op-ed today.

The Stewart column begins by assuming that since both the president and the most strident right wingers are going after the Ryan budget, it must be carving out the reasonable center. Paul points out that a) this betrays a lack of understanding of what’s in the budget, and b) it’s precisely the way the center drifts to the right.

Essentially, the president carves out the center-left; Rep. Ryan, Romney, and the Republicans carve out the far right, and the middle becomes the slightly-not-so-far right.

Just look at Stewart’s summary of the Ryan budget:

The plan stands on two pillars: tax reform and reducing the long-term deficit by reining in entitlement spending.

Are you kidding? Those are some awfully shaky pillars. Without the assumed loophole closers that Ryan asserts but does not name, this plan adds almost $10 trillion to the deficit (that combines the Bush tax cuts that he makes permanent and his $4.6 trillion of new cuts on top of that). Since when did “assume loophole closures” become tax reform? (more…)

The new Republican budget (called the “Ryan Budget” by DC insiders) reflects current electoral reality: billionaires and corporations now finance candidates, and we get government of, by and for billionaires and corporations. The rest of us no longer matter, except as “the help” and, at least to the extent we haven’t been entirely fleeced, a flock to harvest. This budget starts with $10 trillion in tax cuts — mostly for the rich. After adding $10 trillion to the deficits Republicans then claim that severe cuts are necessary to “fight deficits.” Right. Details below.

Keep in mind where we are starting from: The way our economy and tax system is already structured, the top 1 percent received 93 percent of income gains from recovery. As Mitt Romney’s tax returns demonstrated, those at the very top — whose income comes as checks generated by the money they already have — already pay much lower tax rates than those of us who work for a living.

Shock Doctrine

“Nothing is more important in the face of a war than cutting taxes.” — Republican Majority Leader Tom Delay, 2003

After passing tax cut after tax cut, and military spending increase after military spending increase, and starting war after war, Republican borrowing has added up. So now Republicans terrify the public, telling them that budget deficits will lead to the destruction of the country — and soon. After a decade of screaming “9/11,” “9/11,” noun verb “9/11,” they now scream “deficit, deficit, deficit.” Then with the public suitably stirred up and terrified they offer “solutions” they say are necessary to cut the scary deficit (that they caused, for this purpose).

Behind a blizzard of fog and mirrors, the new Republican budget completes the ongoing shift of our government and our economy away from “we are in this together” democracy to a “you are on your own” system that is entirely for the benefit of a few at the top.

Cuts Taxes for the 1%

The smoke and mirrors: they claim this budget is necessary to reduce deficits, but it doesn’t even pretend to. Instead it starts by cutting taxes on the rich and their corporations by another $4.6 trillion while making permanent the Bush tax cuts, costing another $5.6 trillion. It gives a $187,000 tax cut to every millionaire!

Cuts Jobs

Ethan Pollack at the Economic Policy Institute describes how “Ryan’s budget cuts would cost jobs” — 4.1 million of them:

Paul Ryan’s latest budget doesn’t just fail to address job creation, it aggressively slows job growth. Against a current policy baseline, the budget cuts discretionary programs by about $120 billion over the next two years and mandatory programs by $284 billion, sucking demand out of the economy when it most needs it and leading to job loss. Using a standard macroeconomic model that is consistent with that used by private- and public-sector forecasters, the shock to aggregate demand from near-term spending cuts would result in roughly 1.3 million jobs lost in 2013 and 2.8 million jobs lost in 2014, or 4.1 million jobs through 2014. (more…)

House Budget Committee Chairman Paul Ryan did a great public service when he released his budget last week. By throwing a piece of total garbage on the table and pretending it is a real budget plan, he allowed us to see who in Washington is serious about the budget and who just says things that will push their agenda.

It is easy to see that Ryan himself could not possibly be serious about the document he put out as a “Path to Prosperity.” The Congressional Budget Office analysis of the plan, which was prepared under Representative Ryan’s direction, shows that all categories of government spending outside of health care and Social Security will shrink to 3.75 percent of GDP by 2050.

This 3.75 percent of GDP includes defense spending, which is currently close to 4.0 percent of GDP, not including the cost of the war in Afghanistan. Representative Ryan said that he wants to keep defense spending close to its current level. This means that we have no money left to pay for the Justice Department, the State Department, support for education, roads and other infrastructure, the Park Service, the National Institutes of Health and all the other things that we expect the federal government to do. Essentially Paul Ryan is an anarchist who is proposing to shut down the federal government.

This cannot be a misrepresentation of Representative Ryan’s agenda. He put out essentially the same budget last year at which point many people pointed out the fact that he shrank most categories of government spending to zero. If that was a mistake (albeit an incredibly foolish one) he has now had a full year to reflect on his error and redesign a budget to reflect his real priorities.

Instead, he doubled down. In Representative Ryan’s 2012 Path there is no room for federal funding for all the services that even conservatives expect the government to provide. Does the Republican right now want to shut down federal prisons and end border patrols as Representative Ryan’s budget implies.

This is also not a case of pulling out long-term implications that have no serious meaning. It is a common and silly practice in budget debates to project out a trend for 75 or 100 years and show it leads to an untenable situation when everyone knows the trend will not continue for this long period. (more…)

By now most people have heard some of the worst things about the Republican budget proposal – commonly called the “Ryan plan” and unironically described by the GOP as “the Path to Prosperity”: That it decimates programs for middle class and lower-income Americans while giving even greater tax breaks to the rich – $3 trillion worth, in fact. That it guts education, research, and transportation while preserving tax breaks for Big Oil. That it undercuts Medicare with a voucher system that will be worth less and less with each passing year.

And that, despite all that, it would actually increase the deficit.

You’d think that pretty much covers it – but it doesn’t. When it comes to Medicare, there are three more ugly facts about this plan that have yet to attract widespread attention – mostly because the Republicans have done their best to keep them secret:

1. They’re secretly planning to raise the Medicare age.

It’s not in House Budget Chair Paul Ryan’s Wall Street Journal editorial, the one where he sneered at “some who would distort for political gain our efforts to preserve programs like Medicare” and said “our plan provides guaranteed coverage options financed by a premium-support payment.” It’s not in the summary description of the GOP budget, which it claims “strengthens health and retirement security by taking power away from government bureaucrats and empowering patients instead with control over their own care.” It’s not even in the full budget document itself, which is 99 pages long and contains a section entitled “Strengthening Health and Retirement Security.”

So how do we know that the GOP wants to raise the Medicare eligibility age from 65 to 67? Because that’s what Ryan and his staff told the Congressional Budget Office when they asked the CBO to calculate the impact of their plan. It’s right there in the CBO report on the budget.

Here’s the key sentence: “In addition, the eligibility age for Medicare would increase by two months per year beginning in 2023 until reaching age 67 in 2034.”

That’s right: When Ryan and his staff instructed the CBO to calculate the impact of the Republican budget, they told its analysts that the GOP plan included an increase in the eligibility age for Medicare. Apparently they didn’t have room to mention that fact anywhere in their 99-page document, and didn’t see fit to bring it up while they were spouting all that rhetoric about “preserving entitlement programs for the future.” (more…)

The Etch A Sketch blunder (boy, do I love Mitt Romney and his band of renown, they give us so many gifts) is a reminder that Mitt Romney desperately wants to erase this primary campaign from the minds of voters and go back to pretending to be the moderate he pretended to be while being Governor of Massachusetts. Unfortunately for him, the campaign he has run combined with the New and (Distinctly) Unimproved Ryan-Romney Budget will make that utterly impossible.

The Ryan budget is the most radical, repeal-the-20th Century budget document I have read in 30 years of politics, and Romney’s and the entire Republican Party’s embrace of it makes it quite literally impossible to Etch A Sketch anything away. They are stuck with the consequences of Romney having been forced to be the lap dog for the further and further and further right wing Republican primary electorate. What Romney’s political operatives are fantasizing about is quietly wrapping up the nomination and then moving with stunning speed to the center so swing voters can live with him again, but it won’t work. It can’t work: Romney’s long history as a flip-flopper which makes the Etch A Sketch strategy way too obvious, his right wing base’ knee jerk opposition to any hints of moderation makes it impossible for him to drift any distance away from them, and mostly importantly the Romney-Ryan radical budget makes the Etch A Sketch strategy a more epic fantasy than The Lord of the Rings (although not nearly as well written).

Even more than all the pandering right-wing speeches and debates all through the primary, the Romney-Ryan budget forces the nominee Romney into full-out, right-wing warrior territory, no matter how reluctant he is. Having embraced it, he now has to defend it: the Medicare death spiral; the end of defined Medicare benefits, and ever-increasing out-of-pocket costs for seniors; the end of guaranteed nursing home coverage for moderate-income seniors; money slashed from student loans and children’s health care and student loans and public schools; the drastic Ayn Randian cuts to all other domestic programs; the wild giveaways to the wealthy and big corporations in ever greater tax cuts — more tax cuts for the wealthy than there are program cuts in the first 10 years; the walking away from any tightening of the defense budget. Speaking of fantasy, this is it, the all-time fantasy budget of every Rush Limbaugh/Glenn Beck/Ayn Rand apostle, the wild-eyed dream budget for every defense contractor and oil company exec and Wall Street banker. Check out the numbers just so you know I am not exaggerating: I am not. (more…)

A number of commenters make good points regarding spending cuts in the federal budget.

I often argue that we can’t achieve budget sustainability on spending cuts alone. That’s passes for a bold argument these days, because pretty much everyone agrees that government spends too much, right? So the only point of contention is whether budget sustainability should involve tax increases as well.

But what, specifically, does government spend “too much” on? Defense? Some say so, and there are clear inefficiencies there, but as a share of the economy, it’s not historically high. What about agriculture subsidies; industry subsidies; all those tax expenditures (spending through the tax code) for kids, research, investment, health care, housing, education?

The historical record, shown below, shows spending by the federal government as a share of GDP wiggling around a pretty narrow range until the Great Recession, where it shoots up, by necessity. But it’s already coming down… too soon, in my view, given the ongoing weakness. But the point is if you adjust for the business cycle and the important countercyclical function of government spending in recession, it’s not jump-out-at-you obvious that there’s a spending problem. (There’s very clearly a revenue shortfall problem.) (more…)

Today, Republican House Budget Chairman Paul Ryan will present his new “bi-partisan compromise” plan to a meeting of an outfit known as the “Bipartisan Policy Center.”

Ryan’s latest proposal would allow individuals to choose between traditional Medicare or vouchers that provide “premium support” for private insurance plans.

Here’s what you need to know about the Ryan’s latest attempt to repackage his hugely unpopular proposal to eliminate Medicare and replace it with vouchers for private insurance:

1). The only thing “bipartisan” about his latest proposal is that Ryan has apparently convinced Oregon Democratic Senator Ron Wyden to support it. The content of this plan is based on pure right wing privatization dogma. In fact it has much the same structure as the Bush plan to privatize Social Security.

2). Ryan admits that his latest proposal would not save any money compared with the current system. So why do it?

The real goal of Ryan’s plan is the same goal of his original plan: to allow Wall Street and huge private insurance companies to get their hands on the Medicare Trust Fund. Both plans are about nothing more than allowing insurance companies to make more money.

Since the plan would not save the government money compared with the current system, it really has nothing to do with demonstrating “that there is an emerging consensus developing on how to preserve Medicare,” as Ryan claims. (more…)