Under the guise of debt reduction, the chairman of the House Budget Committee's budget proposal would take from the already poor, give to the already rich.
Rep. Paul Ryan (R-WI) is waging radical class warfare and ideological privatization schemes and selling it as a debt reduction plan.
As the Center on Economic and Policy Research's Dean Baker reminds us, the U.S. economic policies of the last three decades, by favoring corporations and the wealthy over average Americans, have achieved the world's most breathtaking upward redistribution of wealth. America's richest 1 percent are getting about $1.5 trillion richer each year. Studies also show that the top 5 percent in this country hold almost 64 percent of our wealth while and the bottom 80 percent of scrape by on just 12.8 percent of the pie.
Yet under the guise of debt reduction, the chairman of the House Budget Committee's budget proposal would take from the already poor, give to the already rich and attempt to achieve debt reduction not by cutting real costs, but by privatizing entitlement programs and shifting costs from the wealthy and corporations to struggling states, seniors, disabled, sick and low-income Americans. And the revenue-raising necessary for serious debt reduction is glaringly absent, with proposals instead to actually decrease tax-revenue from those most able to pay.
Although the details won't be released until later today, there's a fair amount that we already know: Its foundation is his 2010 "Roadmap for America's Future" and the similar healthcare recommendations of the Rivlin-Domenici Bipartisan Policy Center Task force. This reverse-Robin Hood scheme essentially privatizes Social Security and Medicare, converting Medicaid from a guaranteed benefits program to a limited block grant program. At the same time, it would repeal estate and corporate taxes, slashing the income taxes the wealthiest Americans pay and instituting a regressive national sales tax that would most likely increase tax obligations for poor, working-class, and middle-class Americans.
Even if his blueprint doesn't attack Social Security too, it won't be safe for long. Privatizing Social Security is another essential piece of this dangerous and unfair GOP agenda.
Instead of further shrinking the middle class and endangering the health and economic well-being of those of us not fortunate enough to be among the nation's wealthiest 2 percent, a responsible budget would look to ease long-term debt in some of the following ways:
First, fix our broken health care system. Under Ryan's health care schemes, beneficiaries would increasingly bear the burden of soaring costs with no guarantee of receiving the remedies prescribed by their doctors. A better and fairer approach would expand the single-payer Medicare system nation-wide, achieving cost-savings, implementing real cost control and retaining guaranteed healthcare for all Americans. Baker also suggests that if Ryan is such a fan of vouchers, how about a voucher system that achieves some of effective cost-saving and health-promoting results: give Medicare beneficiaries the option of to buy into the more efficient health care systems in Canada and Europe.
Second, my Institute for Policy Studies colleague Chuck Collins articulates our argument for four revenue-raisers that would bring in a whopping $400 billion each year: 1) impose a small tax on speculative financial transactions that do little to strengthen the real economy 2) reduce corporate tax dodging by closing overseas tax havens and requiring companies to pay U.S. taxes on the profits they actually earn in this country 3) establish higher tax brackets for households with annual incomes of $1 million or more, and 4) Institute a progressive estate tax on fortunes over $5 million, with higher rates on billionaire estates.
Finally, cut the bloated military budget. Obama's bipartisan Debt Commission called for cutting the Pentagon's spending by at least $100 billion over the next decade. We need to cut more than that but we shouldn't accept less.
The GOP is right about one thing: We have to be serious about debt reduction. Ryan's dangerous and seriously flawed scheme, however, is nothing more than an ideological ploy to shrink government programs that help poor and middle-class Americans while rewarding the already wealthy.