Like the Ryan Budget? Then You’ll Love These House Spending-Cap Bills

February 6, 2012 at 1:20 pm

The House may soon consider two bills (H.R. 3576 and H.R. 3580) that would limit federal spending to levels similar to those in the budget of Budget Committee Chairman Paul Ryan (R-WI) that the House passed last April.  These bills are part of a package of ten bills that Chairman Ryan and other committee members introduced to change the federal budget process.  As our new paper explains, these two bills would disproportionately hurt low-income people, worsen recessions, rule out balanced deficit-reduction packages, and promote deep cuts in Social Security and Medicare.

Nearly Two-Thirds of Proposed Cuts in Ryan Budget Comes from Low-Income AmericansThe bills — like the Ryan budget on which they are modeled — would require large cuts in federal spending that would likely fall disproportionately on low-income people.  The Ryan budget plan would get nearly two-thirds of its budget cuts over the next ten years from programs that serve people of limited means.  (See chart)

The Ryan plan would also cut Medicare in two major ways.  It would gradually raise the eligibility age from 65 to 67 while repealing the health reform law’s coverage expansions, so 65- and 66-year-olds would have neither Medicare nor access to health insurance exchanges where they could buy affordable coverage.  And it would replace Medicare’s guaranteed benefit with a premium support payment (voucher) that beneficiaries would use to buy coverage on their own, and the voucher wouldn’t keep pace with rising health care costs.

The bills would exacerbate economic downturns by preventing the federal government’s “automatic stabilizers” — like unemployment insurance and SNAP (food stamps) — from expanding as they are designed to do to help rejuvenate a weak economy.  Also, by limiting spending but not tax cuts, the bills would effectively require that all deficit reduction come from program cuts and none from revenues, thereby precluding balanced deficit-reduction packages.  And they would alter congressional budget procedures to make it easier to cut Social Security and Medicare benefits, but not to strengthen these programs’ financing by raising dedicated tax revenues.

In addition, the bills would reverse a quarter-century of bipartisan practice by subjecting basic assistance programs for the poor to automatic, across-the-board cuts.  In the past, both parties have embraced the principle that automatic budget cuts to enforce budget or deficit targets should spare basic assistance programs for low-income Americans to avoid driving these Americans into (or deeper into) poverty.  The House bills would repeal those protections, putting low-income programs at particular risk of deep cuts during and after recessions, when the need for them is greatest.

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More About Paul N. Van de Water

Paul N. Van de Water

Paul N. Van de Water is a Senior Fellow at the Center on Budget and Policy Priorities, where he specializes in Medicare, Social Security, and health coverage issues.

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4 Comments Add Yours ↓

Comments are listed in reverse chronological order.

  1. 1

    WHAT TRULY IS FEARFUL; 35% of respondents in a recent survey “did not believe the was a significant disparity between Income Classes.”…after all the accurate information provided. Republican respondants were even more dis-believing…45% did NOT accept the disparity between income classes!

    In a second called Defense Spending many of our leading Congress members want us to continue or increase miliary spending..where ONE F-35 WILL COST ABOUT $165,000,000 ..FOR ONE AIRCRAFT and this cost is increasing due to the build while you continue to change designs..

  2. Gerald Caldeira #

    Paul Ryan is a typical Republican- so out of touch with how difficult for working Americans to make it. The only thing that is keeping older Americans out of desperate poverty is Social Security and Medicare. They want to strip away any safety net while cutting more taxes for the wealthy. We need a revolution of working Americans to prevent what is a plutocracy.

    • JNagarya #

      Ryan and his ilk are very much in touch with their intentions: to repeal the New Deal, including Social Security, so the 99 per cent are again reduced to subsistence income, as they were before the New Deal was instituted.

      They are all about money, and at best economic slavery. And they know it. As example, they want to re-illegalize abortion, and prohibit contraception, while at the same time reducing, then eliminating, welfare, food stamps, and other programs that support the poor.

      The sociopaths can be rabidly so, they are rabidly so.

    • 4

      YET, RYAN APPEARS ON magazine covers and he was elected, by whom, I am at a complete loss as to the thinking of the people in his “Frozen” it the climate? He must have wide ranging support…will someone please explain this to us ? ANYONE WHO KNOWS HOW SUCH A PERSON CAN BE SO POLITICALLY SUCCESSFUL …

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