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Debating the Ryan Budget

April 30, 2014 at 10:50 AM

Yesterday’s Washington Post cites CBPP’s finding that House Budget Committee Chairman Paul Ryan’s budget gets nearly 70 percent of its budget cuts from low-income programs while noting that “Ryan has taken strong exception” to our findings.  I previously wrote two blog posts responding to Chairman Ryan’s criticisms and, while summarizing them, below, I also make one further point.

Chairman Ryan has made no attempt to refute our calculations.  Rather, he claims that his budget’s cuts aren’t really “cuts” at all, but instead are simply smaller spending increases than would otherwise occur.

My first post responded to this claim, pointing out:  “[T]he Chairman is trying to have it both ways.  At the very start of his ‘Pathway to Prosperity,’ he writes, ‘The House Republican budget cuts spending by $5.1 trillion over the next ten years.’ ”

Also, Chairman Ryan’s argument that a cut isn’t really a “cut” makes little sense, I explained:

For many programs, it costs more to provide the same services for its beneficiaries from year to year, because of inflation.  In addition, the population is aging and, thus, more people qualify for programs for elderly Americans [like Social Security and Medicare] each year.  For these reasons, the cost of providing the same level of benefits and services to people who qualify rises for various programs from year to year in nominal dollars — that is, in dollars not adjusted for inflation, population growth, or the population’s aging.

A budget allocation that doesn’t cover cost increases due to these factors means either that eligible recipients will see their services or benefits cut, or that some people who would otherwise qualify for those services or benefits are turned away.

My second post explained that while total federal spending grows under the Ryan budget in nominal dollars:

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)...

A related point also merits a response.  The Post article quotes Chairman Ryan’s previous statement that while his budget cuts federal spending — which is projected to be $48 trillion over the next decade under current policies — by $5 trillion, that leaves almost $43 trillion, and “Nearly $43 trillion is enough.”

That’s rhetoric, not a policy argument.

The $43 trillion and $48 trillion figures appear large because they are cumulative ten-year totals of all federal spending — everything from Social Security and Medicare to defense, other basic government functions, and interest.  Much of this spending reflects external factors such as the aging of the population, rising health care costs, and projected increases in interest rates.

The Ryan budget focuses its $5 trillion in budget cuts on a relatively small part of the budget — programs for low-income people and non-defense discretionary programs, which have already been hit hard by the tight budget caps under the 2011 Budget Control Act and the added cuts under sequestration.  Some 69 percent of the Ryan budget's cuts come in programs for people with low or moderate incomes.  And the Ryan budget doesn’t save a penny by scaling back unproductive tax subsidies — spending through the tax code — that heavily benefit wealthy households and powerful corporations.

The only way to evaluate whether spending under the Ryan budget (or any budget) is adequate and properly targeted is to examine which programs would be cut, which would expand, and how those changes would affect people and communities.  By targeting low-income programs for cuts while asking no sacrifice from the wealthy, the Ryan budget would mean more poverty, increased inequality, more people without health insurance (the Urban Institute estimated that more than 40 million people would likely lose coverage under a previous Ryan budget), and less investment in key areas such as education and infrastructure.