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Bait and switch

GOP touts deficit reduction plan, but it’s really about tax cuts for the wealthy

Posted 4/22/11

To hear the politicians and pundits, Washington is in the midst of a debate over how to reduce the federal deficit. But somebody forgot to inform the Republicans in the House, who voted last week for …

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Bait and switch

GOP touts deficit reduction plan, but it’s really about tax cuts for the wealthy

Posted

To hear the politicians and pundits, Washington is in the midst of a debate over how to reduce the federal deficit. But somebody forgot to inform the Republicans in the House, who voted last week for a much-touted budget plan that cuts an estimated $4.3 trillion in government spending over ten years, but gives nearly all of it away in new tax breaks—the vast majority for the nation’s wealthiest.

It just shows how far the new breed of Tea Party-powered Republicans have strayed from common sense. The GOP budget plan, developed by Wisconsin Rep. Paul Ryan, would create enormous pain for the nation’s elderly and low and moderate income Americans, who would see unprecedented cuts in programs from which they benefit. The Ryan plan would eliminate Medicare as we know it in ten years, converting it into a privatized system that would limit federal contributions to a set rate, and leave seniors to pick up far more of their health care costs than at any time since the founding of Medicare in the mid-1960s. The Ryan plan would also turn Medicaid into a block grant program, which would sharply limit medical care to the elderly (most Medicaid goes to pay for nursing home care) and poor children.

These are just two of dozens of examples where programs for transportation, students, low and moderate income workers, and retirees would be gutted in order to finance the only thing that the GOP seems to care about these days— more tax cuts for the wealthiest Americans. It’s like Robin Hood in reverse, and it’s become a singular obsession with the GOP in recent years.

In the end, Ryan’s plan is pure bait and switch. While the GOP touts it as a deficit reduction plan, it achieves almost nothing in terms of deficit reduction. It’s really about financing yet another round of tax cuts through draconian cuts in present day programs and by heaping still more debt on future generations. According to the non-partisan Center for Budget and Policy Priorities, Ryan’s plan would provide just $156 billion in deficit reduction over ten years. Considering that the federal government will spend upwards of $45 trillion over the next decade, that barely qualifies as a rounding error.

All of this would seem to leave the field wide open for President Obama and his alternative to the Ryan plan. For the president, who just announced he’s running for re-election, the timing couldn’t be better. While public support for the President is lukewarm, recent polls have shown overwhelming opposition to the Ryan budget plan, which will make Obama look reasonable by comparison. President Obama has proposed fewer spending cuts than the Ryan budget, but would also raise taxes on the wealthy in order to boost revenues.

The President can rightfully claim that his budget plan, unlike Ryan’s, actually does reduce the deficit, though not by as much as it could if the country returned to the tax rates in place under President Clinton.

Ryan claims his budget plan reduces spending by $5.6 trillion, but analysts have noted that nearly $1.3 trillion of that is achieved by assuming drawdowns in the wars in Iraq and Afghanistan. Those drawdowns are already scheduled or underway, so this actually requires no change in government policy.

If you include only new cuts called for in the Ryan plan, it amounts to $4.3 trillion over ten years. But once you subtract the nearly $4.2 trillion in proposed tax cuts, the GOP plan trims virtually nothing from the deficit.

The GOP disputes that, of course, claiming that economic growth sparked by a new round of tax cuts, will generate new jobs and higher revenues as a result. But that theory has been debunked so often, it’s hard to imagine Republicans still trot it out with a straight face. In years past, at least, Republicans worked within the world of reality. When the Reagan tax cuts blew up the deficit, President Reagan signed major tax increases to fix the problem. President George H.W. Bush also raised taxes to get the deficit under control.

But these days, ideology trumps everything in the GOP. History, science, standard accounting practices and anything else that runs counter to their political agenda is simply discounted. Like in the days of the old Soviet Politburo, the facts are simply adjusted to fit the dogma.

But some things are real— like the financial impact to Americans from the GOP’s plan. And the long term costs of yet another round of tax cuts for the wealthy. If the GOP won’t recognize reality, the voters may have to show it to them once again.

Republicans, deficit reduction, tax cuts the the wealthy