Wisconsin Rep. Paul Ryan’s Roadmap to Nowhere: Budget Plan Will Not Reduce Our Deficit

Right after the Republican electoral blowout last November, I asked one of my colleagues, a former Republican member of Congress, what he thought the new House majority would do with its power. His answer: “Overreach. The Democrats did it. So will we.”

The budget plan introduced by Rep. Paul Ryan (R-Wis.) has confirmed the prescience of that answer. It is hard to overstate how radical, almost otherworldly, this plan is. In the name of cutting the deficit, by $1.6 trillion over the next decade, Ryan’s program would:

  • Cut spending on just about everything the government does, not including Social Security, Medicare and Medicaid. By 2050, government spending would be a smaller share of the economy than in any year since the presidency of Herbert Hoover. Among the programs that would suffer drastic reductions would be national defense, housing, education, agriculture, the environment and veterans affairs.
  • Double the share of health care spending for which Medicare enrollees would be responsible. This added burden would not be in the name of cost reduction, since the plan would move people into private plans that the Congressional Budget Office estimates would cost from 44% to 67% more than traditional Medicare, from which people turning 65 starting in 2022 would be barred.
  • Halve Medicaid grants to states by 2022 and cut them by 75% by 2040. Nor would the grants be increased for any reason – even if enrollment might rise during recessions or health emergencies. Thus, the Ryan plan would effectively repeal a program that now provides acute and long-term care benefits to more than 50 million Americans.
  • Deny coverage to the 32 million Americans now without health insurance who are slated to become insured under the Affordable Care Act. They would remain uninsured, boosting the number of people without health insurance to an all-time high of more than 50 million.

Ryan justifies such cuts in the name of deficit reduction. In fact, deficit reduction would be minimal. Most of the savings from spending reductions would go to finance tax cuts – including cuts in the top tax rates from 39.6% to 25% for those who make $375,000 or more.

And most of the rest of the claimed savings are illusory. Ryan’s baseline assumes that military ventures in Afghanistan and Iraq will continue indefinitely. If one recognizes that these ventures will end, deficit reduction over the next decade would be just $155 billion, a tenth of what Ryan claims.

All of the recent deficit reduction commissions have recommended large spending cuts, but they have also recognized that tax increases are necessary as well to minimize cuts in health care, food and housing assistance and other services essential to the well-being of millions of Americans.