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Chairman Ryan’s Obfuscation: Part 2

April 10, 2014 at 2:10 PM
BY
Robert Greenstein

I explained earlier today the hollowness of House Budget Committee Chairman Paul Ryan's attempt to deny that his budget cuts low-income programs deeply. Ryan's defense was that since total federal spending grows under his budget, how can we say it contains cuts, rather than merely slowing the rate of growth? We disposed of this in my earlier post, but I want to dig deeper here to expose a budget trick Chairman Ryan is playing.

Sure, total federal spending grows under his budget in nominal dollars. But that's driven in large part by increases in Social Security and Medicare -- whose costs rise with inflation and the aging of the population, among other factors -- and interest payments on the debt. Ryan cites trends for overall federal spending to mask the fact that his budget contains hefty cuts -- even in nominal (non-inflation-adjusted) dollars -- in key low-income programs like Medicaid and SNAP (formerly food stamps).

In his attempt to deflect our finding that 69 percent of his budget cuts come from programs targeted on Americans of limited means, Ryan says that Medicaid would receive over $3 trillion during the coming decade under his budget and that its costs would grow in all years after 2016. Here's what his too-clever-by-half response conceals:

  • Under the Ryan budget, expenditures for Medicaid, the Children's Health Insurance Program (CHIP), and a few small related programs (i.e., expenditures for "budget function 550") would fall -- not grow -- in nominal dollars between 2014 and 2016, from $357 billion to $311 billion.
  • While this figure would grow in nominal dollars after 2016, that would be from this shrunken starting point.
  • And it wouldn't return to its 2014 level, even in nominal dollars, until 2022 -- by which time health care costs will be substantially higher than in 2014, the population will be considerably larger, and the number of poor, elderly people in nursing homes will have risen considerably given the aging of the baby boomers. That's partly why, as my earlier post explained, tens of millions of less-fortunate Americans would lose health coverage and become uninsured under the Ryan budget.

A similar pattern marks the Ryan plan for the part of the budget that includes SNAP, Supplemental Security Income (SSI) for poor people who are elderly or have serious disabilities, the Earned Income Tax Credit, and other such programs. In this part of the budget, as well, nominal spending wouldn't return to its 2014 level until 2022.

Chairman Ryan has every right to propose severe cuts in any program he chooses. But he should be straightforward about what he is proposing.