The 5 Worst Things About The House GOP’s New Budget
File picture. US lawmakers geared up for a tough budget battle after Republicans agreed to a three-month increase to the US debt ceiling but made further extensions of the government's borrowing authority conditional on steep spending cuts.
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Rep. Paul Ryan (R-WI) released the third iteration of the GOP budget on Tuesday morning. The document achieves balance in 10 years by maintaining the high revenue levels and health care savings that Republicans have vociferously opposed and slashing the health and safety net programs that middle and lower income Americans rely on. Top-income earners and corporations, meanwhile, would benefit from huge tax breaks.
Here are the five worst things about Ryan’s budget:
1. GIVES HUGE TAX CUTS TO THE RICH AND CORPORATIONS: Ryan’s plan would reduce both top income and corporate tax rates to 25 percent, resulting in trillions of dollars in tax cuts for the wealthy and corporations. The government would lose roughly $7 trillion in revenues compared to Ryan’s projections, and while he plans to close loopholes to pay for the cuts, he has in the past failed to specify which loopholes he would close, and raising enough revenue from the elimination of tax expenditures would prove politically difficult, if not impossible. Ryan would also convert the corporate tax code to an “international” plan, resulting in an even bigger giveaway to American companies that are already paying historically low tax rates.
2. FORCES SENIORS TO PAY MORE FOR HEALTH CARE: Beginning 2024, the guaranteed Medicare benefit would be transformed into a government-financed “premium support” system. Seniors currently under the age of 55 could use their government contribution to purchase insurance from an exchange of private plans or traditional fee-for-service Medicare. But the budget does not take sufficient precautions to prevent insurers from cherry-picking the the healthiest beneficiaries from traditional Medicare and leaving sicker applicants to the government. As a result, traditional Medicare costs could skyrocket, forcing even more seniors out of the government program. The budget also adopts a per capita cost cap of GDP growth plus 0.5 percent, without specifying how it would enforce it. This makes it likely that the cap would limit the government contribution provided to beneficiaries.
3. JEOPARDIZES MEDICAID: The budget would eliminate the exiting matching-grant financing structure of Medicaid and would instead give each state a pre-determined block grant that does not keep up with actual health care spending. This would shift some of the burden of Medicaid’s growing costs to the states, forcing them to — in the words of the CBO — make cutbacks that “involve reduced eligibility for Medicaid and CHIP, coverage of fewer services, lower payments to providers, or increased cost sharing by beneficiaries—all of which would reduce access to care.”
4. REPEALS HEALTH COVERAGE FROM 30 MILLION AMERICANS: The budget repeals the Affordable Care Act’s requirement to purchase health insurance coverage, the establishment of health insurance exchanges, the provision of subsidies for lower-income Americans, the expansion of the Medicaid program, and tax credits for small businesses that provide insurance coverage. As a result, more than 30 million Americans would lose coverage and the budget would eliminate the new law’s consumer protections, which have already benefited tens of millions of Americans. States across the country are already implementing the law and a growing number of Republican governors have finally agreed to expand their Medicaid programs.
5. CUTS FOOD STAMPS: The budget seeks to turn most social safety net programs into block grants to the states that are modeled after the 1996 welfare reform law. That would result in devastating cuts to the Supplemental Nutrition Assistance Program (food stamps), women, infant, and children programs, and other parts of the social safety net that keep millions of people out of poverty each year. Since welfare reform occurred 16 years ago, it has failed to reach many families with children in poverty, particularly during the latest economic recession. Ryan’s budget would make most safety programs equally as impotent.