Thursday, April 5, 2012

Ryan's Late Budget.

 The Most hated GOP man's budget is here , though late , it's a start , but a hard pill to swallow.

 I can understand that you need to cut spending dramatically, at least in the current and recent economic environment. However the tax changes proposed in these broad sweeping gestures, at least from his Op Ed piece here, doesn't really do the trick. Hard cuts on the spending side and gimmicks on the tax side. I expect just the opposite from the Democrats - gimmicks on spending cuts and hard hits on tax increases.

One poster at the front has it right: it's not Dems or Repubs, it's both of them. If they were truly interested in more than their own brand of kool aid and reelection at any cost (to us), we wouldn't be in this mess. We have to take money out of the election and reelection process, neuter the lobbyists (take away their control on money, and build a wall between elections and special interest money that buys results, if not the people themselves. To begin with you can download his budget here (PDF). But the best way to understand it is probably to break it down by categories. One thing that surprised me when reading through the budget was just how much Ryan was actually proposing to do here. For instance: There’s no obvious reason that repeal of the Dodd-Frank financial-regulation law should be in the budget, yet there it is. Anyway, onto the summary
I read this budget proposal as a non-starter [but Dems are not the target audience] [it is] designed to fan the uber-partisan fires in the run up to 2012. Cut or defund the social-safety net and doing little to cut defense all the while making no attempt to increase revenue.• Reducing spending: This budget proposes to bring spending on domestic government agencies to below 2008 levels, and it freezes this category of spending for five years. The savings proposals are numerous, and include reforming agricultural subsidies, shrinking the federal work force through a sensible attrition policy, and accepting Defense Secretary Robert Gates's plan to target inefficiencies at the Pentagon• Welfare reform: This budget will build upon the historic welfare reforms of the late 1990s by converting the federal share of Medicaid spending into a block grant that lets states create a range of options and gives Medicaid patients access to better care. It proposes similar reforms to the food-stamp program, ending the flawed incentive structure that rewards states for adding to the rolls. Finally, this budget recognizes that the best welfare program is one that ends with a job—it consolidates dozens of duplicative job-training programs into more accessible, accountable career scholarships that will better serve people looking for work.• Health and retirement security: This budget's reforms will protect health and retirement security. This starts with saving Medicare. The open-ended, blank-check nature of the Medicare subsidy threatens the solvency of this critical program and creates inexcusable levels of waste. This budget takes action where others have ducked. But because government should not force people to reorganize their lives, its reforms will not affect those in or near retirement in any way.


1) Discretionary spending
a) Non-defense discretionary: Brings spending back to pre-2008 levels and freezes it there for five years.
b) Defense-related discretionary: Echoes Obama’s budget request in accepting the $78 billion in “savings” that Defense Secretary Robert Gates identified and going no further. I put “savings” in quotation marks because it’s really a reduction in the growth rate that Gates previously requested.
2) Financial system
a) Financial regulation: Repeals Dodd-Frank.
b) Fannie Mae and Freddie Mac: “This budget . . . proposes eventual elimination of Fannie Mae and Freddie Mac, winding down their government guarantee and ending taxpayer subsidies. It supports increasing the guarantee fees Fannie and Freddie charge lenders in order to bring private capital back, shrinking their retained portfolios, and enacting various measures that would bring transparency and accountability to the GSEs.”
3) Safety net

a) Medicaid: Converts federal share of Medicaid spending into a block grant that’s indexed for inflation and population growth. To offer some context, health-care costs often increase at twice the rate of inflation or more.
b) Supplemental Nutrition Assistance Program: Better known as food stamps, SNAP gets the Medicaid treatment: block grants indexed for inflation and population growth.
c) Pell Grants: Cut back to 2008 levels, wiping out recent increases.
d) Health-care reform: Repeals the Affordable Care Act.
4) Retirement security

a) Medicare: Privatizes Medicare. Future beneficiaries will choose from a menu of private options. They won’t have the choice of the standard Medicare plan. Wealthier beneficiaries will get a small voucher and poorer beneficiaries will get a larger voucher. Vouchers grow at GDP+1%, whether or not Medicare does the same.
b) Social Security: Calls for a bipartisan process to develop reforms.
5) Taxes
a) Tax reform: “Reform the tax code by consolidating the current six brackets and cutting the top individual rate from 35 percent to 25 percent.”
b) Tax revenue: Prevents the Bush tax cuts from expiring in 2013. So the revenue-neutral tax reform locks in today’s rates, which is to say it makes the Bush cuts permanent.
c) Corporate taxes: Lowers corporate tax rate from 35 percent to 25 percent. “This budget would offset lower rates with a broader base, scaling back or eliminating entirely the deductions.”
6) Energy
Endorses “The American Energy Initiative”: I don’t know much about this bill, but you can find the GOP’s official case for it here.

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