Senators Bob Corker (R-TN) and Claire McCaskill (D-MO) have introduced a bill that would limit total federal spending to 20.6 percent of gross domestic product (GDP), its average level between 1970 and 2008. Although this proposal may seem relatively benign, it’s actually just as radical as House Budget Committee Chairman Paul Ryan’s budget plan, and it would require draconian cuts in Medicare, Medicaid, and possibly Social Security.
BEYOND THE NUMBERS
Last night, Bob Greenstein discussed the details of President Obama’s deficit reduction plan on MSNBC’s “The Last Word with Lawrence O’Donnell”
The House will vote this week on Congressman Paul Ryan’s budget plan for the coming year. CBPP Senior Fellow Paul Van de Water discusses some of the impacts this radical plan would have on Medicare.
House Budget Committee Chairman Paul Ryan’s budget plan calls for cutting Medicaid by $771 billion (over 22 percent) over the next decade by converting it into a block grant. Ryan’s plan and a CBO analysis outline some of the basics of the block grant proposal. Based on this information, however, we find that the Ryan block grant would produce “only” about $500 billion in cuts over the next ten years. This means that states’ block grant amounts each year would have to be even more inadequate than described, in order to produce the required drastic cuts.
As I pointed out last week, the Congressional Budget Office has found that House Budget Committee Chairman Paul Ryan’s proposal to block-grant Medicaid would significantly shift costs to states, beneficiaries, and health care providers. To help illustrate how states would likely fare under the proposal over time, we compared how much federal funding they would have received under the block grant for fiscal years 2000 through 2009 to what they actually received (excluding the temporary increases provided during recessions). We found that the Ryan block grant would have cut federal Medicaid funds to most states by more than 25 percent by 2009 and to several of them by more than 40 percent.
House Budget Committee Chairman Paul Ryan (R-WI) and his fellow Republicans have repeatedly expressed concerns about rising health care costs. But Ryan’s budget plan would increase total health care spending attributable to Medicare beneficiaries (the beneficiaries’ share plus the government’s share) by upwards of 40 percent, according to the Congressional Budget Office (CBO).
As we explain in a report released today, even some critics of House Budget Committee Chairman Paul Ryan’s budget plan have praised his “courage” and his willingness to make “hard choices” to address looming deficits. But, upon closer inspection, Chairman Ryan’s widely reported claim that his plan produces $1.6 trillion in deficit reduction proves illusory. In fact, the numbers in his plan show that his budget produces just $155 billion in real deficit reduction over ten years.
We explained recently that House Budget Committee Chairman Paul Ryan’s budget gets the lion’s share of its savings by cutting programs that help low- and moderate-income Americans. The adverse human and social consequences of such an approach are the paramount concern. But these cuts would also make the economy more vulnerable to shocks by weakening the “automatic stabilizers” — increases in federal spending (and reductions in federal taxes) that occur automatically when the economy weakens — that reduce the severity of economic downturns.
The majority of the $1.4 trillion in Medicaid cuts over the next ten years in House Budget Committee Chairman Paul Ryan’s budget would come from converting the program into a block grant. The non-partisan Congressional Budget Office (CBO) issued an analysis yesterday finding that block-granting Medicaid would shift costs to states, beneficiaries, and health care providers — just as we have argued. Among CBO’s key findings: