Posts Tagged ‘Ryan Budget’

Ryan Roundup: Everything You Need to Know About Chairman Ryan’s Budget

August 11, 2012 at 1:03 pm

Updated: Saturday, August 11, 2012

Below is a compilation of the CBPP analyses, blog posts, and graphics on the budget that House Budget Committee Chairman Paul Ryan proposed, and the House of Representatives passed, in March.  At the bottom of the compilation, we also list the Center’s analysis of the Ryan “Roadmap” budget plan.

Overview/General

  • Blog post:  Greenstein Statement
    March 21, 2012
    “The new Ryan budget is a remarkable document — one that, for most of the past half-century, would have been outside the bounds of mainstream discussion due to its extreme nature. In essence, this budget is Robin Hood in reverse — on steroids.  It would likely produce the largest redistribution of income from the bottom to the top in modern U.S. history and likely increase poverty and inequality more than any other budget in recent times (and possibly in the nation’s history).”

62% of Proposed Cuts in Ryan Plan Come from Low-Income Programs

  • Blog post: When Is a Deal Not a Deal?
    March 22, 2012
    With defense funding well above the Budget Control Act’s funding caps in coming years, and non-defense discretionary funding very far below those caps, the Ryan budget bears little resemblance to the bipartisan agreement reached last summer.

Taxes

  • Blog post:  Chairman Ryan’s Misleading Chart
    March 27, 2012
    The lead tax chart in Chairman Ryan’s budget…gives the impression that we can easily eliminate tax expenditures for the very wealthy and thereby pay for lower rates for all taxpayers — including the Ryan plan’s big reduction, to 25 percent, in the top income tax rate. The chart in question is based on data from the Urban-Brookings Tax Policy Center (TPC). But it does not show what Chairman Ryan suggests it does, for two key reasons.

Health Care

  • Blog post:  Ryan Budget Would Make Big Changes in Medicare
    March 29, 2012
    House Budget Committee Chairman Paul Ryan’s new budget provides much less detail than last year’s about his proposals in Medicare and other areas — too little for the Congressional Budget Office (CBO) to estimate their impact, as Brookings economist William Gale points out.  (CBO estimated that Chairman Ryan’s Medicare proposals last year would have driven up total health care spending and doubled the out-of-pocket costs of a typical 65-year-old.)

  • Analysis:  Ryan Medicaid Block Grant Would Cut Medicaid by One-Third by 2022 and More After That
    March 27, 2012
    The Medicaid block-grant proposal in the Ryan budget that the House of Representatives will vote on this week would cut federal Medicaid funding by 34 percent by 2022 (on top of repealing the health reform law’s Medicaid expansion) because the funding would no longer keep pace with health care costs or with expected Medicaid enrollment growth as the population ages and employer-based health insurance continues to erode.

Safety Net

  • Blog post: The Massive Hidden Safety-Net Cuts in Chairman Ryan’s Budget
    March 21, 2012
    A key misunderstood element of the Ryan budget is its proposed cut in spending for non-discretionary programs other than Social Security, Medicare, Medicaid, and other health programs.  There is no way to generate the budget’s required savings without extremely severe cuts in these programs, on which the most vulnerable Americans depend.

Analysis of Ryan “Roadmap” Budget Plan of January 2010

The Ryan Budget’s Radical Priorities — Provides Largest Tax Cuts in History for Wealthy, Raises Middle Class Taxes, Ends Guaranteed Medicare, Privatizes Social Security, Erodes Health Care
The Roadmap would give the most affluent households a new round of very large, costly tax cuts by reducing income tax rates on high-income households; eliminating income taxes on capital gains, dividends, and interest; and abolishing the corporate income tax, the estate tax, and the alternative minimum tax. At the same time, the Ryan plan would raise taxes for most middle-income families, privatize a substantial portion of Social Security, eliminate the tax exclusion for employer-sponsored health insurance, end traditional Medicare and most of Medicaid, and terminate the Children’s Health Insurance Program. The plan would replace these health programs with a system of vouchers whose value would erode over time and thus would purchase health insurance that would cover fewer health care services as the years went by.

Related analyses:

This post was originally posted March 2012.

Romney’s Budget Proposals Would Require Massive Cuts in Medicare and Other Programs

May 21, 2012 at 4:59 pm

Governor Mitt Romney’s proposals to cap total federal spending, boost defense spending, cut taxes, and balance the budget would require extraordinarily large cuts in other programs, according to an updated analysis that we released today.

If policy­makers exempted Social Security from the cuts, as Governor Romney has suggested, and cut Medicare, Medicaid, and all other entitlement and discretionary programs by the same percentage, then nondefense programs other than Social Security would have to be cut 29 percent in 2016 and 59 percent in 2022.  Without the balanced budget requirement, the cuts would be smaller but still massive, reaching 40 percent in 2022.

The cuts that would be required under the Romney budget proposals in programs such as veterans’ disability compensation, Supple­mental Security Income for poor elderly and disabled individuals, SNAP (formerly food stamps), and child nutrition programs would move millions of households below the poverty line or drive them deeper into poverty.  The cuts in Medicare and Medicaid would make health insurance unaffordable (or unavailable) to tens of millions of people.  The cuts in non­defense discretionary programs — which include a wide variety of public services such as elemen­tary and secondary education, law enforcement, veterans’ health care, environmen­tal protection, and biomedical research — would come on top of the deep cuts in this part of the budget that are already in law due to the discretionary funding caps established in last year’s Budget Control Act.

Governor Romney’s cuts would be substantially deeper than those required under the austere House-passed budget plan authored by Budget Committee Chairman Paul Ryan (R-WI).  Over the 2014-2022 period, Romney would require $7 trillion to $10 trillion in cuts to programs other than Social Security and defense; the Ryan budget would make slightly more than $5 trillion in comparable cuts.   

These updated estimates are based on new information and budget proposals from the governor, updated budget and economic projections from the Congressional Budget Office (CBO), modifications in the Center’s assumptions about “current policy” to match those that CBO and other budget analysts use, and other factors.

Click here for the full report.

Senator Lee’s Budget Would Sharply Cut Social Security, Medicare, Other Programs While Making Tax System Less Progressive

May 16, 2012 at 10:42 am

Sen. Mike Lee (R-UT) plans to introduce a budget resolution (S. Con. Res. 44) this week that would sharply cut Social Security and Medicare and most other federal programs.  Based on a plan from the Heritage Foundation, the Lee budget would slash programs that benefit low- and middle-income Americans while providing tax cuts for the wealthy.  Here are some of its remarkable features:

  • Turning Social Security into a welfare program. Social Security benefits would be income-tested.  Higher-income retirees would receive a reduced benefit or none at all.  For younger workers, retirement benefits would no longer be based on past earnings; everyone would get the same amount.
  • Replacing Medicare’s guaranteed coverage with a voucher. The Lee budget would replace Medicare’s guarantee of health coverage with a flat “premium support” payment, or voucher, with which beneficiaries would buy either private health insurance or a form of traditional Medicare.  This change, which would begin in 2017, would shift substantial costs to Medicare beneficiaries.  As with Social Security, higher-income beneficiaries would get a smaller voucher.
  • Raising the eligibility age for Medicare and Social Security. Senator Lee’s budget would raise the Medicare eligibility age from 65 to 68 over the next ten years.  It would also repeal health reform.  As a result, many 65-, 66-, and 67-year olds would have neither Medicare nor access to health reform’s coming health insurance exchanges in which they could buy affordable coverage.  Social Security’s early retirement age would rise from 62 to 65, and the full retirement age would rise to 68.
  • Reducing health coverage for those with modest incomes. Low-income, nondisabled individuals and families would no longer be eligible for Medicaid or health exchange subsidies.  Instead, they would receive a voucher to help buy insurance, but the voucher amount would often be inadequate and many families would find coverage unaffordable.
  • Cutting nondefense discretionary spending deeply. Under the Lee budget, nondefense discretionary spending — which covers a wide variety of public services such as elementary and secondary education, law enforcement, veterans’ health care, and environmental protection — would shrink to about 1.9 percent of gross domestic product (GDP) by 2022.  In contrast, this category of spending has averaged 3.9 percent of GDP over the past 50 years and has never gone below 3.2 percent of GDP during this period.
  • Making the tax system less progressive. A flat tax on consumption would replace the personal and corporate income taxes, estate tax, payroll tax, and most other federal taxes.  Most tax exemptions, deductions, credits, and exclusions that benefit low- and middle-income people would end.  Meanwhile, income from interest, dividends, and capital gains — which mostly goes to upper-income people — would be tax free.

All told, the Lee budget would fundamentally re-write federal spending and tax policy, taking from the poor and middle class, giving to the rich, and moving the country — at a time of widespread hardship at the bottom and stagnant living standards — in exactly the wrong direction.

Lower Drug Costs Don’t Support Ryan Medicare Proposal

May 15, 2012 at 9:56 am

We’ve updated and expanded our 2011 analysis of why the Medicare Part D drug benefit, which private insurers deliver, has cost much less than the Medicare trustees and the Congressional Budget Office (CBO) originally expected.

House Budget Committee Chairman Paul Ryan says the lower spending reflects efficiencies produced by competition among insurers, and he says that this supports his proposal to convert Medicare into a “premium support” system, in which beneficiaries would receive a voucher to buy private coverage or traditional Medicare.  We found, however, that reliance on private plans had little or nothing to do with Part D’s lower-than-expected spending.  That’s consistent with the results of a new Kaiser Family Foundation study.

More than half of the lower Part D costs resulted from lower-than-expected enrollment.  The rest came from lower per-beneficiary costs (see graph), but that reflected a slowdown in per-capita prescription spending throughout the U.S. health care system.

Private plans actually increased Part D costs by doing a comparatively poor job of negotiating discounts from drug manufacturers. When Congress created Part D, it assumed that private insurers would negotiate larger discounts than the ones Medicaid requires for the drugs it buys, but the opposite happened.  CBO estimates that requiring private plans to get the same discounts that Medicaid gets for the same drugs would reduce Part D costs by $137 billion over the next ten years.

Thinking About Tax Policy, Part 4: Ryan Plan a Costly Step in the Wrong Direction

April 13, 2012 at 2:18 pm

This series has explained why we need to raise more revenue and why it makes sense to start at the top of the income scale.  The budget from House Budget Committee Chairman Paul Ryan goes in exactly the opposite direction — it would cut taxes deeply at the top and raise even less revenue than if we continued all of President Bush’s tax cuts, leading to bigger deficits and worse income inequality.

Top 1 Percent Would Receive Nearly Half of Ryan Tax Cuts

The Ryan budget would permanently extend President Bush’s tax cuts, which policymakers enacted when the federal government had a large budget surplus and which have since proven unaffordable.  That would cost more than $4 trillion over the first decade alone.

Next, Chairman Ryan would dig the budget hole even deeper with new tax cuts that would cost $4.5 trillion over the first decade (according to the Urban-Brookings Tax Policy Center); he has said he would pay for them by broadening the tax base but hasn’t offered any proposals.  The tax cuts would overwhelmingly flow to the richest people in the country:

  • People with incomes above $1 million would receive a $265,000 average annual tax cut, on top of the $129,000 they would receive from extending the Bush tax cuts.  Their after-tax incomes would rise by 12.5 percent, on average — seven times more than the 1.8 percent average gain for middle-income households.
  • The top 1 percent of taxpayers — those with incomes above $630,000 — would receive 45 percent of the new tax cuts, or nearly as much as the rest of the entire population (see graph).
  • Low-income working families would actually be hit with tax increases because the Ryan plan wouldn’t fully extend President Obama’s tax cuts for working-poor households. People with incomes below $10,000 would see their after-tax incomes fall by 2 percent, on average.