House Republicans’ latest budget is a slightly new twist on a familiar theme: low taxes, particularly on the wealthiest, financed by extreme cuts to government spending programs. Knowing the GOP’s — and, frankly many Democrats’ — penchant for high levels of military spending, this mostly means unfathomably deep cuts to domestic health care, education, science and other programs.
Here’s the twist. Last year, Republicans took a lot of guff for their plan to turn Medicare in to a subsidized private insurance system. That wasn’t just because they proposed to privatize the program, but because the subsidies they proposed were extremely meager — that’s how it saved so much money.
This year, the budget calls for more generous subsidies. Which means that to hit the same long-term deficit targets, Ryan has to cut even deeper into other programs.
Here’s how it looks graphically.
Medicare spending keeps rising, Social Security spending keeps rising, so the big hits come from Medicaid/SCHIP, which falls from about 2 percent of GDP to about 1 percent of GDP over the next four decades; and discretionary spending and other, mandatory domestic programs — food stamps, unemployment insurance — which get cut by more than two-thirds. From more than 12 percent of GDP to less than 4 percent.
Four percent of GDP is about what we spend on the military now. Even if that falls slightly in Ryan’s vision, Republicans won’t let it take a very hard hit, and neither will a lot of Democrats. Which means that basically all other functions of government — from federal law enforcement to education to border security to agriculture subsidies and on and on — which today run nearly 10 percent of GDP, would have to be squeezed down to 1 or 2 percent.
When you ask Republicans whether this is realistic, the response is more or less, Hey, look over there!
“I think it’s important in a budget to do two things, one to address the deficit, and also to have a pro-growth element,” said Ways and Means Committee Chairman Dave Camp. “And our budget does that. We have tax reform that will actually help create jobs and get our economy growing again, yet we also try to address the deficit and get the balance. Whereas the president’s budget does just the opposite. He never gets to balance and he raises taxes.”
That’s not an answer, because there is no good answer.