Sunday, March 31, 2013

Five Ugly Extremes of Inequality in America

Original Link:

By Paul Buchheit

Any of the ten richest Americans could pay a year's rent for all of America's homeless with their 2012 income.

The first step is to learn the facts, and then to get angry and to ask ourselves, as progressives and caring human beings, what we can do about the relentless transfer of wealth to a small group of well-positioned Americans.

1. $2.13 per hour vs. $3,000,000.00 per hour

Each of the Koch brothers saw his investments grow by $6 billion in one year, which is three million dollars per hour based on a 40-hour 'work' week. They used some of the money to try to kill renewable energystandards around the country.

Their income portrays them, in a society measured by economic status, as a million times more valuable than the restaurant server who cheers up our lunch hours while hoping to make enough in tips to pay the bills.

A comparison of top and bottom salaries within large corporations is much less severe, but a lot more common. For CEOs and minimum-wage workers, the difference is $5,000.00 per hour vs. $7.25 per hour.

2. A single top income could buy housing for every homeless person in the U.S.

On a winter day in 2012 over 633,000 people were homeless in the United States. Based on an annual single room occupancy (SRO) cost of $558 per month, any ONE of the ten richest Americans would have enough with his 2012 income to pay for a room for every homeless person in the U.S. for the entire year. These ten rich men together made more than our entire housing budget.

For anyone still believing "they earned it," it should be noted that most of the Forbes 400 earnings came from minimally-taxed, non-job-creating capital gains.

3. The poorest 47% of Americans have no wealth

In 1983 the poorest 47% of America had $15,000 per family, 2.5 percent of the nation's wealth.
In 2009 the poorest 47% of America owned ZERO PERCENT of the nation's wealth (their debt exceeded their assets).

At the other extreme, the 400 wealthiest Americans own as much wealth as 80 million families -- 62% of America. The reason, once again, is the stock market. Since 1980 the American GDP has approximately doubled. Inflation-adjusted wages have gone down. But the stock market has increased by over ten times, and the richest quintile of Americans owns 93% of it.

4. The U.S. is nearly the most wealth-unequal country in the entire world

Out of 141 countries, the U.S. has the 4th-highest degree of wealth inequality in the world, trailing only Russia, Ukraine, and Lebanon.

Yet the financial industry keeps creating new wealth for its millionaires. According to the authors of the Global Wealth Report, the world's wealth has doubled in ten years, from $113 trillion to $223 trillion, and is expected to reach $330 trillion by 2017.

5. A can of soup for a black or Hispanic woman, a mansion and yacht for the businessman

That's literally true. For every one dollar of assets owned by a single black or Hispanic woman, a member of the Forbes 400 has over forty million dollars.

Minority families once had substantial equity in their homes, but after Wall Street caused the housing crash, median wealth fell 66% for Hispanic households and 53% for black households. Now the average single black or Hispanic woman has about $100 in net worth.

What to do?

End the capital gains giveaway, which benefits the wealthy almost exclusively.
Institute a Financial Speculation Tax, both to raise needed funds from a currently untaxed subsidy on stock purchases, and to reduce the risk of the irresponsible trading that nearly brought down the economy.

Perhaps above all, we progressives have to choose one strategy and pursue it in a cohesive, unrelenting attack on greed. Only this will heal the ugly gash of inequality that has split our country in two.

Iraq war costs U.S. more than $2 trillion: study

Original Link:

By Daniel Trotta, Reuters
The U.S. war in Iraq has cost $1.7 trillion with an additional $490 billion in benefits owed to war veterans, expenses that could grow to more than $6 trillion over the next four decades counting interest, a study released on Thursday said.

The war has killed at least 134,000 Iraqi civilians and may have contributed to the deaths of as many as four times that number, according to the Costs of War Project by the Watson Institute for International Studies at Brown University.

When security forces, insurgents, journalists and humanitarian workers were included, the war's death toll rose to an estimated 176,000 to 189,000, the study said.

The report, the work of about 30 academics and experts, was published in advance of the 10th anniversary of the U.S.-led invasion of Iraq on March 19, 2003.

It was also an update of a 2011 report the Watson Institute produced ahead of the 10th anniversary of the September 11 attacks that assessed the cost in dollars and lives from the resulting wars in Afghanistan,Pakistan and Iraq.

The 2011 study said the combined cost of the wars was at least $3.7 trillion, based on actual expenditures from the U.S. Treasury and future commitments, such as the medical and disability claims of U.S. war veterans.

That estimate climbed to nearly $4 trillion in the update.

The estimated death toll from the three wars, previously at 224,000 to 258,000, increased to a range of 272,000 to 329,000 two years later.

Excluded were indirect deaths caused by the mass exodus of doctors and a devastated infrastructure, for example, while the costs left out trillions of dollars in interest the United States could pay over the next 40 years.

The interest on expenses for the Iraq war could amount to about $4 trillion during that period, the report said.

The report also examined the burden on U.S. veterans and their families, showing a deep social cost as well as an increase in spending on veterans. The 2011 study found U.S. medical and disability claims for veterans after a decade of war totaled $33 billion. Two years later, that number had risen to $134.7 billion.


The report concluded the United States gained little from the war while Iraq was traumatized by it.
The war reinvigorated radical Islamist militants in the region, set back women's rights, and weakened an already precarious healthcare system, the report said. Meanwhile, the $212 billion reconstruction effort was largely a failure with most of that money spent on security or lost to waste and fraud, it said.

Former President George W. Bush's administration cited its belief that Iraqi dictator Saddam Hussein's government held weapons of mass destruction to justify the decision to go to war. U.S. and allied forces later found that such stockpiles did not exist.

Supporters of the war argued that intelligence available at the time concluded Iraq held the banned weapons and noted that even some countries that opposed the invasion agreed with the assessment.
"Action needed to be taken," said Steven Bucci, the military assistant to former Defense Secretary Donald Rumsfeld in the run-up to the war and today a senior fellow at the Heritage Foundation, a conservative Washington-based think-tank.

Bucci, who was unconnected to the Watson study, agreed with its observation that the forecasts for the cost and duration of the war proved to be a tiny fraction of the real costs.

"If we had had the foresight to see how long it would last and even if it would have cost half the lives, we would not have gone in," Bucci said. "Just the time alone would have been enough to stop us.

Everyone thought it would be short."

Bucci said the toppling of Saddam and the results of an unforeseen conflict between U.S.-led forces and al Qaeda militants drawn to Iraq were positive outcomes of the war.

"It was really in Iraq that 'al Qaeda central' died," Bucci said. "They got waxed."

Saturday, March 30, 2013

Analysis: GOP fiscal vision prioritizes enormous tax cuts for rich over deficit

Original Link:

By Greg Sargent

The nonpartisan Tax Policy Center has just completed its analysis of the Paul Ryan budget, and it confirms once again just how regressive the GOP fiscal vision really is — and how absurd GOP intransigence on revenues remains. The key finding:
The Tax Policy Center estimates that cutting individual rates to 10 percent and 25 percent, repealing the Alternative Minimum Tax and the tax increases included in the Affordable Care Act, and cutting the corporate rate from 35 percent to 25 percent would add $5.7 trillion to the deficit over the next decade. Thus, if House Republicans want to cut these taxes and still collect the revenues they promise, they’d have to raise other taxes by $5.7 trillion.
In other words, to pay for these tax cuts, the Ryan plan would require nearly $6 trillion in new revenues generated by closing loopholes and deductions. TPC’s Howard Gleckman says it is “hard to imagine” how that sum could be generated, which is to say, it is “hard to imagine” how tax cuts of this size would be paid for.

But there’s another point to be made here. The Ryan plan requires Republicans to find $5.7 trillion in new revenues via loophole closing to pay for these enormous tax cuts, which would hugely and disproportionately benefit the wealthy. But Republican are not willing to agree to cede one-tenth that amount in new revenues to reduce the deficit, to get some of the entitlement cuts they say they want, and to stop the sequester. Remember, Obama’s deficit reduction plan asks for $580 billion in new revenues in exchange for over $900 billion in spending cuts. Obama’s revenue ask is one-tenth the $5.7 trillion Republicans are willing to scrounge up in new revenues to pay for the Ryan plan’s tax cuts. But that one-tenth is too much, even though it would give Republicans the spending cuts they want and would stop the sequester Republicans have said is a threat to the country’s military and economy.

Or consider the budget just offered by Senate Democrats, which calls for $975 billion in new revenues in exchange for $975 billion in spending cuts — which would also stop the sequester. That revenue ask is one-fifth the amount Ryan is calling for in loopholes and deductions in order to pay for his plan’s huge tax cuts. Obviously that, too, is unacceptable to Republicans — again, even though this would stop the sequester they say is a threat to the country’s military and economy.
Oh, and to what extent do the Ryan tax cuts benefit the rich? To this extent:
The tax cuts described in Ryan’s budget would generate a huge windfall for high-income taxpayers. On average, households would get a cut of $3,000. But those in the top 0.1 percent of income, who make $3.3 million or more, would get a whopping $1.2 million on average — a 20 percent increase in their after-tax income.
By contrast, middle-income households would get an average tax cut of about $900. Those in the bottom 20 percent (who make $22,000 or less) would get $40 and one-third of them would get no tax cut at all. 
An average of more than $1 million in tax rate cuts — a 20 percent increase in after tax income — for those in the top 0.1 percent who make over $3.3 million a year! That illustrates just how regressive this plan really is.

Remember, according to the Center on Budget and Policy Priorities, Ryan’s tax rate cut for the richest is twice the size of the one proposed by Mitt Romney. That’s because the baseline now — current law — is the 39.6 percent rate the top earners pay, thanks to the tax hike in the fiscal cliff deal. Ryan’s plan would cut that rate from 39.6 percent to 25 percent. In the process, it would require a truly enormous amount of revenues to be generated elsewhere to pay for it.

If Republicans agreed to turn over a small fraction of that sum towards deficit reduction, that would enable scenarios that would turn off the sequester. But since Republicans have adamantly declared that no new revenue must be raised, no matter what, this is a nonstarter. Everything that’s raised from closing loopholes has to go only to cutting tax rates, including a huge tax rate cut for the super rich, and not to paying down the deficit or ending destructive sequestration. I don’t know if there’s any way to illustrate more clearly than this what’s really going on here.

Does Paul Ryan Know His Side Lost in 2012?

Original Link:

By Brad Bannon

If you're the parent of young children, batten down the hatches. Under the budget proposed by Rep. Paul Ryan, R-Wis., fewer children will get the head start in life they need in order to compete in the new global marketplace.

Ryan this week released a budget plan almost identical to the one he proposed last year which was the fiscal plan at the center of the losing Republican cause. Last year Americans had a clear choice between economic and budget philosophies and they voted Democratic. Does Ryan know that Democrats won the election last year? He should because he was half of the losing GOP presidential ticket.

In case Ryan and other Republicans missed the news, Americans re-elected President Obama to another four-year term and Democrats picked up two—count 'em, two—seats in the U.S. Senate. Democratic candidates actually won more votes in races for U.S. House of Representatives than Republicans but the GOP's creation of safe districts—the British call them rotten boroughs—artificially protected the party's majority in the lower house.

Elections have consequences. Last year Americans had a clear choice between two presidential candidates and two different economic and budget philosophies. The former Massachusetts moderate Mitt Romney called for deep cuts in programs like education and Medicaid, increases in the Pentagon budget and no new taxes. The president offered a balanced plan of cuts in domestic and Pentagon spending and higher taxes on corporate America and rich people. Last year, there were almost 5 million more Americans who went with the president and his program than there were who voted for Romney, Ryan and their brand of trickle-down economics. Please alert Ryan because he apparently did not get the memo.

The Ryan budget is an accounting of mistaken priorities. If you're the parents of a four- year-old kid who wants a head start in life, you're on your own. But if you're an oil company executive you're standing in high cotton. The Ryan budget rips the education programs that are investments in the future of our sons and daughters who need to compete in the global economic struggle. Some of these cuts have already kicked in because of the sequester so don't be surprised in September if your kid can't get into a preschool program, is in larger elementary or high school class or has a harder time getting a college loan. But not to worry because the Ryan budget protects the $4 billion dollars in freebies that big oil gets from the feds every year. Shelling out big bucks to big oil is like bringing coal to Newcastle or scheduling new reality shows in prime time television.

The Ryan budget is also full of cheap budget tricks and double accounting. A healthy part of the programs cuts in the Ryan plan assumes that he will get his way and that Obamacare will be completely repealed. But Ryan knows damn well that it won't be repealed. First of all, only 1 in 4 Americans who voted last year favored a complete repeal of the president's health care reform plan. To end Obamacare, the Tea Party types would need 60 votes in the U.S. Senate. Even if all 44 GOP senators and a few Democrats vote to repeal Obamacare, Ryan is still short a dozen or more votes. In the very unlikely case the Senate does vote to kill health care reform, President Obama would have to sign the repeal into law. The president is more likely to give up smoking than end the crowning achievement of his first term.

Ryan also wants to have his cake and eat it too. The Congressional Budget Office has estimated that Obamacare reforms will save the taxpayers billions of dollars over the next 10 years, But even though Ryan's budget assumes Obamacare will die, his fiscal plan includes the savings from health care reform anyway. Don't ask me, the GOP budget gimmicks don't make sense to me either.

Then there's the Ryan flip-flop on Medicaid. The president proposed $700 million in Medicaid cuts last year. Republicans including their budget guru, Paul Ryan criticized the president for making the cuts. During the presidential race last year, Ryan and Romney said they would restore the money to Medicaid if they were elected. Guess what is in the budget that Ryan proposed last week? Yes you guessed right, $700 million in Medicaid spending cuts.

A recent national survey by CBS News shows that a majority (56 percent) of Americans favors the president's plan for spending cuts and corporate tax increases to reduce the deficit. Only 1 in 3 (35 percent) Americans support the Ryan cut and run budget which severely cuts education and runs away from the responsibly we have to prepare our children for the new cutthroat world economic order. Kids you're on your own.

Ryan’s tax reforms cost more than all his spending cuts combined

Original Link:

By Ezra Klein

Here’s an amazing fact: Ryan’s tax reform plan costs more than all his spending cuts combined.

ryan tax cuts spending cuts

So how will he pay for his much, much lower rates? Well, he doesn’t say. In fact, he doesn’t even begin to say. His budget doesn’t name even one tax deduction, exclusion, credit, or loophole that will be closed. All he says is that he will pay for his lower rates, or at least the House Ways and Means Committee, which is in charge of writing any tax reform bill, will pay for them.

But he doesn’t say that they’ll pay for them while keeping the tax code as progressive as it is today.
Ryan’s budget is very clear in its instructions to the House Ways and Means Committee. They can only submit a tax reform bill that “simplifies the tax code to make it fairer to American families and businesses and reduces the amount of time and resources necessary to comply with tax laws,” “substantially lowers tax rates for individuals,” “repeals the alternative minimum tax,” “reduces the corporate rate to 25 percent,” “transitions the tax code to a more competitive system of international taxation,” and is “revenue-neutral”.

Nowhere does it say the final bill needs to retain the current progressivity of the code.
That’s likely because it would be impossible to enact the kind of reform Ryan’s previewing while retaining the progressivity of the tax code.

You’ve watched this debate play out before. During the election, Mitt Romney had an ambitious tax reform plan, a promise to pay for it, and no details. So the Tax Policy Center undertook an incredibly generous analysis in which they assumed that Romney would wipe out every single deduction for the rich before touching any tax breaks for the non-rich. It still wasn’t enough. And Ryan’s plan, as the Center on Budget and Policy Priorities notes, would be even tougher to balance:
Even with the same dramatic scaling back of tax expenditures for filers with incomes above $200,000 that TPC examined in its Romney analysis — including entirely wiping out their deductions for mortgage interest and charitable giving — families with children that have incomes below $200,000 would have to face tax increases averaging more than $3,000 a year, if policymakers were to avoid increasing the deficit while reaching Chairman Ryan’s 25-percent top-tax-rate goal.
Now, Ryan has a bit of wiggle room here. As mentioned above, any tax reform that qualifies for his budget “substantially lowers rates for individuals,” but it doesn’t necessarily lower them all the way to 10 percent and 25 percent. That’s just “a goal.” Here’s the full section:
Substantially lowers tax rates for individuals, with a goal of achieving a top individual rate of 25 percent and consolidating the current seven individual income tax brackets into two brackets with a first bracket of 10 percent
Compare that to the language on corporate taxes:
reduces the corporate tax rate to 25 percent See the difference?
Ways and Means could, in theory, decide the 10/25 goal is too hard to meet, and their tax reform bill will end with a 20 percent rate and a 32 percent rate. That would be considerably easier to pay for. But Ryan is in touch with Rep. Dave Camp, the chairman of the House Ways and Means Committee. It’s unlikely he’s committing Republicans to goals that Camp doesn’t intend to come anywhere near reaching. And if Ryan and the Republican Party wanted to assure the country that their tax reform proposal would keep the code’s current progressivity, they could have said so.

The critique right now of Ryan’s tax reforms is that they’re a huge tax cut for everybody. As I wrote on Friday, I don’t think that’s a fair read of what he’s promised. Rather, the eventual tax reforms are likely to include a significant tax increase on many Americans, and significant tax cuts for those at the very top.

Sunday, March 24, 2013

Ryan Budget 101: The 10 Worst Things About the House Republican Budget

Original Link:

By Sarah Ayres

Republicans in the House of Representatives today released a budget proposal that asks the middle class to bear the entire burden of deficit reduction while simultaneously giving away huge tax breaks for the rich. The plan is nearly identical to the budget plan put forth by the GOP presidential ticket of former Massachusetts Gov. Mitt Romney and his running mate Rep. Paul Ryan (R-WI) that voters rejected last fall for putting the screws to the middle class while exacerbating income inequality.

This year’s proposed House budget for fiscal year 2014 would undermine the nation’s economic recovery in the short term and hamstring America’s future economic growth and global competitiveness. It would end the Medicare guarantee of decent health care for senior citizens and harm our most vulnerable citizens with deep cuts to essential programs such as Medicaid and nutrition assistance. It would make it harder for Americans to go to college and buy a home. And it would once again offer lucrative tax breaks to the rich and oil companies while sticking the middle class with the tab.

What’s more, the Ryan budget proposal doesn’t even add up. The plan only achieves its objective of balancing the budget in 10 years by ignoring a $7 trillion tax hole, and by depending on unrealistically low levels of federal spending. Without specifying how he will pay for his massive tax cuts for the rich or what he will cut to bring spending down the level he proposes, Rep. Ryan’s plan is nothing more than a fantasy.
The new House budget:
  • Weakens the middle class
  • Gives tax breaks to the rich
  • Ends the Medicare guarantee
  • Stifles the economic recovery
  • Undermines America’s global competitiveness
  • Puts college out of reach for low-income students
  • Harms our most vulnerable citizens
  • Doesn’t add up
  • Keeps Big Oil tax breaks and gives them new ones
  • Jeopardizes homeownership for American families
Let’s take a look at each of these 10 key points.

The new budget weakens the middle class

Just about every aspect of Rep. Ryan’s budget proposal hurts the middle class. The plan would end the Medicare guarantee, which ensures that all Americans have access to adequate health care in retirement. It makes huge cuts to investments in schools and worker-training programs that help Americans find well-paying, middle-class jobs. It also slashes infrastructure investments in crucial roads, bridges, and waterways. It would make it harder for middle-class families to buy a home and send their children to college. The plan doesn’t include a single measure that would help our nation’s 12 million unemployed workers get back to work. And if that’s not bad enough, the Ryan budget would likely leave middle-class Americans paying higher taxes for these diminished services.

The new budget gives tax breaks to the rich

Like a reverse Robin Hood, what Rep. Ryan takes from the poor and middle class in his budget, he gives to the rich—and then some. The House Republican budget is chock full of goodies for the wealthiest Americans, in the form of trillions of dollars in tax breaks and cuts. Rep. Ryan and his GOP colleagues insist that all these tax boons for the rich won’t reduce overall revenue levels, but they are deliberately vague on the math. The truth is there is only one way House Republicans could possibly pay for all their proposed tax breaks for the rich, and that’s by sticking the middle class with the bill.

The new budget ends the Medicare guarantee

Once again, this year’s House Republican budget would end the Medicare guarantee of decent insurance for senior citizens and raise health care costs for seniors. The plan would replace the system we currently have with a voucher that seniors can then use to buy health insurance on the private market. As a consequence, tens of millions of seniors would be forced to pay higher premiums to stay in traditional Medicare and keep their current choice of doctors. Hundreds of thousands more would become uninsured.

The new budget stifles the economic recovery

With nearly 250,000 new jobs created in February 2013, the U.S. economy is showing promising signs of growth, but the House Republican budget would stop growth in its tracks. Not only does the plan fail to propose a single job creation measure, it would implement drastic austerity. Sequestration is already shrinking the economy to the tune of $287 billion in lost economic output in 2013, and the House GOP’s push for fiscal austerity could send the economy tumbling back into a recession.

The new budget undermines America’s global competitiveness

Not only would the House Republican budget cripple economic recovery in the short term, but it would also cut us off at the knees when it comes to investments in America’s future economic growth and global competitiveness. The plan would slash hundreds of billions of dollars from investments in transportation infrastructure, education and training, and science and technology research and development. By cutting the investments economists agree are necessary to create long-term economic growth, the House GOP would endanger America’s ability to innovate and compete in the world market for decades to come.

The new budget puts college out of reach for low-income students

In his latest budget blueprint, Rep. Ryan once again proposes massive cuts to Pell Grants, which would hurt low-income students who count on federal financial aid to go to college. The plan would cut Pell benefits and eligibility, freeze the maximum grant at $5,645 annually, and eliminate nearly $100 billion in mandatory funding for Pell. When Rep. Ryan proposed the same plan last year, an analysis by the Center for American Progress found that it would eliminate Pell Grants for more than 1 million students, reduce remaining Pell Grants by more than $1,500 per year, and add thousands of dollars in loan debt to low-income college students and their families.

The new budget harms our most vulnerable citizens

The House GOP budget would gut essential elements of the social safety net, including food assistance and health care for the poor, elderly, and disabled. The plan would convert the Supplemental Nutrition Assistance Program, or SNAP, into a block grant, which would shift the burden to state budgets and make it harder for struggling families to put food on the table. It would do the same for Medicaid, forcing cash-strapped states to choose between cutting benefits or reducing eligibility. These cuts would leave our most vulnerable citizens, including nursing-home patients and disabled children, to fend for themselves.

The new budget doesn’t add up

Rep. Ryan’s big claim that his plan will balance the budget in 10 years is more fantasy than reality. To believe it, you would have to ignore $7 trillion in unspecified tax expenditure savings and impossibly low levels of nondefense discretionary spending. Rep. Ryan’s hand waving aside, these gimmicks mean it is likely that the plan will actually increase the deficit and debt, rather than reduce it.

The new budget keeps Big Oil tax breaks and gives them new ones

The House Republican budget proposal would not only keep $40 billion in tax breaks for oil-and-gas companies, but it would actually give the five biggest oil companies an additional multibillion-dollar tax cut by slashing the corporate income tax. Last year Big Oil companies raked in record profits while increasing oil and gasoline prices threatened to break middle-class family budgets. In this budget proposal, House Republicans choose to enrich oil-and-gas companies with billions of dollars in special tax giveaways at the expense of struggling American families.

The new budget jeopardizes homeownership for American families

The House GOP budget proposes to wind down Fannie Mae and Freddie Mac, eliminating the federal guarantee for mortgage-backed securities issued by the mortgage giants. This would hurt homebuyers because most analysts agree that without the government guarantee, the 30-year fixed-rate mortgage will no longer be available. Moreover, it proposes fair value scoring for the Federal Housing Administration, or FHA, which would unnecessarily raise the cost of FHA mortgages, hitting first-time homebuyers and homebuyers of color especially hard.


For the third time, Rep. Paul Ryan has produced a budget proposal that asks the middle class to make significant sacrifices so that the rich can enjoy enormous tax cuts. Many elements of his plan for FY 2014 are identical to those he’s advocated in the past.

Like previous plans, it would weaken the American middle class while expanding economic inequality. It would cut essential programs and services that benefit low- and middle-income families while promising massive tax breaks for the rich and Big Oil companies. It would eliminate the Medicare guarantee, make it harder for kids to go to college, and crush families’ dreams of homeownership. And if that’s not bad enough, the budget plan would hurt the economic recovery in the short term while also slashing investments crucial to America’s future economic competitiveness. In short, the Ryan budget is the last thing our economy needs.

But there is one important difference between Rep. Ryan’s newest budget and the two he’s offered previously. This time, Americans have had a chance to decide for themselves whether Rep. Ryan’s plan represents the future they want for themselves and their children. They said no. Unfortunately, this budget is nothing more than the same failed approach to economics that Americans rejected at the polls last November.

Paul Ryan's GOP Budget vs. the Senate Democrats' Budget—in 1 Graph

Original Link:


It's Budget Week in America. First, Paul Ryan released an update to his conservative vision of America, proposing trillions in spending cuts, mostly to health care. Yesterday, Senate Democrat responded with their own budget, which cuts about $1 trillion, raises about $1 trillion in taxes mostly by limiting deductions for richer families, and throws in a $100 billion stimulus.
How do these plans compare? Here's how:
Screen Shot 2013-03-14 at 12.41.58 PM.png
Four key takeaways:
(1) Ryan is most famous for his plan to reform Medicare. But in the next ten years, his budget is first and foremost a sledgehammer to everything except Medicare (and defense and Social Security).
(2) What's "other mandatory" spending? It's mostly income security programs (unemployment insurance, food stamps) and retirement and health benefits for the veterans and federal employees.
(3) Remember that half of the Senate's savings come from new revenue. Even so, Ryan's cuts are far deeper because he intends to balance the budget by the early 2020s, a goal that is arbitrary and almost certainly unnecessary, since we can run small deficits forever (and have).
(4) Zero cuts for Social Security in both plans. Who's afraid of senior citizens? The representatives elected by them, evidently.
Boring (but important, and necessary, etc) methodology note: If you're asking yourself simply, What do these cuts represent? they represent cuts in a world without a sequester.
But comparing these budgets isn't like comparing apples to apples. It's not even like comparing apples to oranges. It's more like comparing an apple to something that looks like an apple, but later you learn is not really an apple.
Let me explain plainly as I can. The Senate Democrats' plan assumes no sequester. The Ryan budgets assumes a sequester in which practically all of the cuts occur in non-defense spending, according to Michael Linden at the Center for American Progress and Loren Adler at the Bipartisan Policy Center. In the nitty-gritty breakdown of spending by function (Defense, Agriculture, Education, etc), Ryan's budget assumes that defense spending in 2023 is practically the same as the CBO projected before the sequester became law. But he also includes total discretionary spending (defense and non-defense) that reflects the sequester.
In short, he dreams a little conservative dream: America keeps the sequester, but moves practically all the defense cuts over into non-defense cuts. Another bit of magic.

March Madness: The 5th Straight Year of Extreme Corporate Tax Avoidance

Original Link:

By Paul Buchheit

The brackets are set for the big dance -- the dance around tax responsibility. Most of the teams are in the bottom bracket. In this league, the lowest score wins.

Outside the stadium our nation's kids and seniors and low-income mothers may be dealing with food and housing cuts, but on the corporate playing floor new low-tax records are being set again this year. Just as this is a golden age for sports, this is also, as noted by the New York Times, "a golden age for corporate profits."

Corporations have simply stopped paying their taxes, perhaps using the 2008 recession as an excuse to plead hardship, but then never restoring their tax obligations when business got better. The facts are indisputable. For over 20 years, from 1987 to 2008, corporations paid an average of 22.5% in federal taxes. Since the recession, this has dropped to 10% -- even though their profits have doubled in less than ten years.

Pay Up Now just completed a compilation of corporate tax payments over the past five years, using SEC data as reported by the companies themselves. The firms chosen are top-earners who have filed 10-K reports through 2012. Their US Tax figures represent the five-year total of "current" payments.

The 64 corporate teams paid just over 8% in taxes over the five-year period.

The Slink Sixteen
General Electric: The worst tax record over five years, with $81 billion in profits and a $3 billion refund.

Boeing: In addition to receiving a refund despite $21.5 billion in profits, the company ranked high in job cutting, underfunded pensions, and contractor misconduct.

Exxon Mobil: Made by far the largest profits in the group, but paid less than 1% in U.S. taxes, and yet received oil subsidies along with their tax breaks. Unabashedly reports a 2012 "theoretical tax" of over $27 billion, almost 90% of its total income tax expense. The company was also near the top in contractor misconduct.

Verizon: Second worst tax record, with a refund despite $48 billion in profits.

Kraft Foods: Received a refund from the public despite $13.5 billion in profits. Also a leading job-cutter.

Citigroup: One of the five big banks who are estimated to get a bailout/refund from the American public amounting to three cents from every tax dollar.

Dow Chemical: Received a refund despite almost $10 billion in profits.

IBM: Paid less than 3% in taxes while ranking as one of the leading job cutters, and near the top in contractor misconduct.

Chevron: In addition to a meager 4.3% tax rate and a share of oil subsidies, the company has been the main beneficiary of tax-exempt government bonds.

FedEx: The company paid less than 5% in federal taxes while relying on the publicly-funded Post Office to deliver thirty percent of its ground packages.

Honeywell: Less than 6% in taxes, a leading job cutter, near the top in instances of contractor misconduct, and run by the "Fix the Debt" CEO with the largest pension fund.

AT&T: An 8% tax rate, a leader in job cuts and underfunded pensions, and in the top 20 of contractor misconduct instances.

Merck: Notable for an 8.4% tax rate, job cuts, offshore holdings, and the top U.S. spot on the contractor misconduct dollar list.

Apple: Where to begin? Avoiding federal taxes, avoiding state taxes, hiding overseas earnings, engaging in intellectual property schemes, using the "Double Irish" to transfer profits from Europe to Bermuda, and underpaying its store workers despite conducting most of its product and research development in the United States.

Pfizer: One of the leaders in stockpiling untaxed profits overseas, and right behind Merck in contractor misconduct dollars.

Google: A master at the "Double Irish" revenue shift to Bermuda tax havens, while using tax loopholes to bring a lot of the money back to the U.S. without paying taxes on it. Recognized as one of the world's biggest tax avoiders.

Microsoft: Named as one of the biggest offshore hoarders while using tax strategies to bring much of their untaxed money back to the U.S., where it also avoids state taxes.
The Fouling Four

GE, Boeing, Exxon, and Apple. Merck almost crashed the party, but the competition was too stiff.

The Winner?

No one wins this game. In a financial sense they do, but the gains are outweighed by the greed and irresponsibility of tax avoidance.

All these companies, after using our infrastructure and technology and research facilities and higher education and national defense to build incomparably successful businesses, are now doing everything in their power to avoid paying anything back, while instead using a carefully manipulated set of "legal" business writeoffs and exemptions and loopholes to cut their tax bills to almost nothing. And all the while they rant about the unfairness of the U.S. tax code.

The real madness is that human beings are suffering because of the tax games corporations play.

Saturday, March 23, 2013

Koch Brothers Are Spending Millions to Deny Poor Americans Healthcare

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One should be wary of assigning the word evil to another human being because it means they are profoundly immoral and guilty of not conforming to conduct established as consistent with principles of personal and social ethics. Evil, or immoral, people would likely cause pain, suffering, and even death to another human being for pleasure, or withhold assistance to a person in distress regardless it would be of no consequence or cost to them. Unfortunately, America is home to two of the most evil men on the planet. It is difficult to imagine any American spending their money to deny medical care to an infirm American they have no connection to or personal hatred for, but Charles and David Koch are spending money to deny poor Americans healthcare for no readily apparent reason except the Kochs are genuinely evil, immoral men devoid of personal or social ethics.

Recently there has been encouraging news for residents of states with Republican governors because they are accepting the Affordable Care Acts’ Medicaid expansion provisions to provide the poorest Americans with healthcare. Arizona Governor Jan Brewer is the latest Republican to accept the Medicaid expansion plan that takes effect on January 1, 2014 and is fully funded by the federal government for three years. After three years federal funding begins phasing down to no less than 90% by 2020. States would be left with a minimal investment (10%) after 2020 to provide healthcare for hundreds-of-thousands of poor Americans who would be without medical care without the expansion.

Brewer, who is not normally recognized for her compassion, spoke at a rally to garner support for her decision and cited her reasons for embracing expansion that include, broadening eligibility for the poor saves taxpayer money, saves lives, and eases the burden on hospitals caring for uninsured patients. She warned that without expansion, 50,000 Arizonans would lose healthcare coverage after January 1 “even if they’re in the middle of their treatment; the human cost of this tragedy can’t be calculated.” Despite the cost to the state of not expanding Medicaid, one might wonder why Brewer had to rally support to avert an incalculable human tragedy, because any Arizona resident with a modicum of morality would embrace a program providing healthcare to 50,000 poor Arizonans.

Regardless there is no cost to Arizona until at least 2017, and no cost to Charles and David Koch ever, they instructed their front group, Americans for Prosperity, to organize a campaign to oppose Brewer’s attempt at Medicaid expansion. Apparently, the Kochs are not amused when their Republican surrogates oppose their agenda, and especially when they have spent millions to eliminate the ACA and defeat its main proponent, President Obama. The Kochs’ front group Americans for Prosperity organized a campaign to enlist Arizona citizens to fight against their own self-interests to defeat Medicaid expansion, which is also underway in Pennsylvania and Florida courtesy of Americans for Prosperity. In Pennsylvania, for example, AFP intends to deny 542,000 uninsured and poor residents health care coverage, and in Florida, AFP convinced a Republican subcommittee to block Governor Rick Scott’s decision to expand Medicaid leaving Scott with a decision to either obey the Koch brothers, or provide poor Floridians with healthcare using his veto power.

Americans for Prosperity supplied Arizona residents with a typical screed decrying the benefits of providing healthcare to the poor such as “Governor Brewer and powerful lobbyists are pushing Arizona to impose statewide taxes to fund an expansion of Medicaid (AHCCCS) under ObamaCare. It is vitally important for Arizona to stop the proposed Medicaid expansion, because the human and fiscal costs of that expansion would be enormous;” the cost to Arizona is zero for three years and only 10% after 2020. The letter also cited the human costs they claim will “railroad at least 250,000 Arizonans into a low-quality, government-managed health insurance system. Medicaid patients not only have worse medical outcomes than patients with private insurance, but often have worse medical outcomes than low-income persons without insurance.” So, according to Americans for Prosperity, a poor person with no healthcare insurance has better outcomes than patients with medical coverage, and Arizonans who can afford private healthcare insurance will be “railroaded” into Medicaid coverage? These are the same scare tactics opponents of the Affordable Care Act have parroted since 2009, and they are as illogical and false in 2013, as they were nearly four years ago.

A prescient question is; what benefit do the Koch brothers get from preventing Arizona, Pennsylvania, and Florida (among others) from participating in the Medicaid expansion program? Poor people cannot afford private healthcare insurance, so the insurance industry is not losing potential policy holders, and people with private coverage will not qualify for Medicaid coverage so they will not abandon their private policies for no coverage. With no apparent profit motive, it is possible the Kochs are nervous that another government program like Social Security and Medicare will be popular with the people making their “government is a failure” propaganda hard to sell to voters, but it is most likely the Koch brothers are just sheer evil; and greedy. The Koch philosophy is that if government spends any money at all, it should be to enrich the wealthy whether it is in the form of tax breaks for the one-percent, or direct payments to Koch Industries.

It is impossible to find any socially redeeming value in the Koch brothers’ existence, and the damage they wreaked on this nation and its people is immeasurable. They were the driving force behind the Citizens United decision, spend millions promoting climate change denial, celebrated and congratulated Republicans for enacting sequestration cuts, fund the American Legislative Exchange Council (ALEC), and fund anti-union efforts in all fifty states. They are connected to every anti-American and anti-democracy effort in the nation, and are hell-bent on controlling and profiting from every aspect of American society whether it is education or politics, and by any measure are evil incarnate. That they actively deny poor Americans basic healthcare, although despicable, is just another aspect of their malicious existence.

The Ryan Plan: Cutting Benefits For Poor Women To Protect Millionaires

Original Link:

By Katie Wright, Guest Blogger and Adam Peck

Despite the fact that women voted en masse to reject Rep. Paul Ryan’s (R-WI) budget plan in the November election, this week’s unveiling of the latest House Republican budget shows that Rep. Ryan still doesn’t get it when it comes to standing with women and promoting the economic security of their families.

The latest Ryan budget puts a tight cap on the area of the budget that funds vital supports for low-income girls and young adults, like nutrition assistance for expectant mothers and their children, child development, childcare, and education assistance. Adult women struggling to feed their families would see their food stamp (or SNAP) benefits cut. Changes to Medicaid would jeopardize women’s access to affordable health care and long-term care — making matters worse for women doing their best to care for themselves, their children, and their aging parents — and turning Medicare into a voucher program would shift costs onto senior women, jeopardizing their future economic security.

Unfortunately, just as in past years, the former vice presidential candidate has put forth a budget that rewards the rich with a huge tax break while cutting off opportunity and pathways out of poverty for women at every critical juncture in their lives:


Ten signs Paul Ryan is dropping acid

Original Link:

By Jon Perr

Back in the 1990s, the CEO of my former company had a simple way of questioning the wisdom of some of our more dubious business strategies. "Are we," he would ask, "smoking the drapes?" By that standard, House Budget Committee Chairman Paul Ryan must be dropping acid. Because as a quick glance at his job-killing, Medicare-rationing, health care-gutting, tax cut windfall for the wealthy-giving and hopelessly unbalanced budget shows, Ryan was apparently hallucinating when he wrote it.
Here are 10 signs that suggest Paul Ryan is now following Timothy Leary as well as Ayn Rand.
  1. Two Million Jobs Lost in 2014 Alone
  2. $5.7 Trillion Tax Cut, Mostly for the Wealthy
  3. Zero Tax Breaks Ended
  4. Tax Hikes for the Middle Class
  5. Medicare Rationing Boosts Annual Premiums for Seniors by $2,200 in 2030
  6. 38 Million More Uninsured
  7. Slashing Medicare and Medicaid Benefits, But Keeping the Tax Revenue
  8. Non-Defense Discretionary Spending at Lowest Level in Decades
  9. Two Trillion Dollar Flip-Flop on Defense Spending
  10. Cutting Historically Small Federal Workforce by 10 Percent
Join me below the fold to learn more.
1. Two Million Jobs Lost in 2014 Alone
The entire point of the "fiscal cliff" showdown in December wasn't that the triple of whammy of tax increases, termination of the payroll tax holiday and the automatic spending cuts from the sequester would increase the national debt, but instead reduce it too quickly and thus deal a body blow to the economy. The nonpartisan CBO warned that "going over the cliff" could have reduced gross domestic product by 2.9 percent and driven the unemployment rate to 9.1 percent by the end of this year.
But while that result was largely averted, Paul Ryan's House GOP budget for fiscal year 2014 could prove even more painful. An assessment by the Economic Policy Institute (EPI) found that Ryan's blueprint would cut spending by $121 billion in FY 2014 and by another $343 billion in 2015. The result?
On net, we estimate that the Ryan budget would decrease gross domestic product (GDP) by 1.7 percent and decrease nonfarm payroll employment by 2.0 million jobs in calendar year 2014 relative to current policy. We estimate that the Ryan budget would increase the unemployment rate by between 0.6 percentage points and 0.8 percentage points.
2. $5.7 Trillion Tax Cut, Mostly for the Wealthy
Over the next decade, the Ryan “Path to Prosperity” cuts spending by $4.6 trillion (or about 10 percent) compared to current projections. But thanks to its call for the largest tax cut in U.S. history, the Ryan budget creates an even larger, multi-trillion dollar hole for the U.S. Treasury.
According to the nonpartisan Tax Policy Center, Ryan’s plan to reduce the top tax rate from 39.6 to 25 percent, to shift from seven income brackets to two (10 and 25 percent), to cut the corporate tax from 35 to 25 percent and other changes will cost Uncle Sam $5.7 trillion over the next 10 years. Last year, the Center on Budget and Policy Priorities (CBPP) forecast that Ryan’s payday for the gilded class would slash the average tax bill for millionaires by $265,000 (12 percent) a year.
As TPC’s Howard Gleickman put it this week:
The tax cuts described in Ryan’s budget would generate a huge windfall for high-income taxpayers. On average, households would get a cut of $3,000. But those in the top 0.1 percent of income, who make $3.3 million or more, would get a whopping $1.2 million on average–a 20 percent increase in their after-tax income.
And Ryan wants to do all of this, it turns out, after years of the total federal tax bite as a share of the U.S. economy hitting its lowest level since the early 1950's and income inequality at its highest since 1929.
3. Zero Tax Breaks Ended
As with every “roadmap” he’s authored since 2010, Paul Ryan has promised to deliver a “revenue-neutral” budget. To make up the trillions he gives away in new tax cuts, Ryan as ever promises to close some of the loopholes, breaks and other “tax expenditures” that now drain over $1 trillion a year from the U.S. Treasury. (That figure is forecast to hit $1.8 trillion by 2017.) But in three years, Paul Ryan predictably hasn’t had the courage to name a single loophole he would close in order to find almost $6 trillion in new revenue he needs to offset his gargantuan tax cut giveaway. As Dana Milbank summed it up, Ryan's magical budget is more like a Mad Lib:
The former Republican vice presidential candidate's budget eliminates _ loopholes in the tax code, cutting the _ and the __ deductions.
Will the self-proclaimed "courageous" Paul Ryan call for ending the Earned Income Tax Credit? The mortgage interest deduction? The supposed tax reformer won't say, so we won't know. As he's been insisting for over a year, "That's what the Ways & Means Committee is supposed to do. That's not the job of the Budget Committee." Unless and until he fills in those blanks, Americans can only assume Paul Ryan's will deliver trillions more in red ink over the next decade:
4. Tax Hikes for the Middle Class
Paul Ryan's silence on the trillion-dollar question of tax breaks doesn't just mean his budget blueprint has no hope of balancing by 2023. As Greg Sargent warned Thursday, Ryan's "Path to Prosperity" almost certainly means higher tax bills for middle and lower income Americans. The reason, as we learned during the 2012 campaign, is simple enough: there simply aren't enough tax expenditures that only affect the rich.
A year ago, Ryan claimed his budget would "stop subsidizing the wealthy" [and] close the tax shelters and loopholes that are disproportionately used by the wealthy so that we can get more tax revenue by having a broader tax base with lower rates." His running mate Mitt Romney boasted of his own, similar tax scheme that "we make sure that the top 1 percent keeps paying the current share they're paying or more."
But as the CBPP and the Tax Policy Center found in reviewing last year's similar Ryan and Romney proposals, not so much. Even after assuming the closure of tax loopholes and deductions which disproportionately favor the rich, TPC forecast that a President Romney would cut taxes for the richest five percent of earners while increasing the tax bill for the other 95 percent of Americans. As CBPP found in its analysis of the 2012 edition of Ryan's budget, there's no way to cut the needed $500 billion a year in tax breaks without helping the rich and hurting everyone else, especially if further raising capital gains and dividend tax rates is off the table:
It's no wonder Ezra Klein concluded last year that "'broadening the base and lowering the rates' is anti-family tax reform." And that's why it's even less surprising that Ryan got weak in the knees and tried to skirt the issue in his new budget. As Sargent explained:
But the key here is that the plan does not say definitively that the top rate would be 25 percent; it only says that this is a "goal." What's more, the plan says nothing about what it would do with rates on capital gains and dividends. During the campaign, Mitt Romney and Ryan suggested they would not raise rates on those. The new Ryan plan doesn't specify one way or the other.
5. Medicare Rationing Boosts Annual Premiums for Seniors by $2,200 in 2030
For years, the centerpiece of Paul Ryan's "Roadmap for America" has been the privatization of the Medicare system now serving almost 50 million American seniors. But even in its latest incarnation keeping traditional government-run Medicare as a "public option," Ryan's "premium support" scheme still dramatically shifts costs to seniors as the value of his voucher invariably fails to keep pace with inflation and increasing prices from private insurers. As ThinkProgress summarized the CBO's April 2012 assessment of Ryan's little-changed plan:
Beginning in 2023, the guaranteed Medicare benefit would be transformed into a government-financed "premium support" system. Seniors currently under the age of 55 could use their government contribution to purchase insurance from an exchange of private plans or--unlike Ryan's original budget--traditional fee-for-service Medicare...But the budget does not take sufficient precautions to prevent insurers from cherry-picking the healthiest beneficiaries from traditional Medicare and leaving sicker applicants to the government. As a result, traditional Medicare costs could skyrocket, forcing even more seniors out of the government program. The budget also adopts a per capita cost cap of GDP growth plus 0.5 percent, without specifying how it would enforce it. This makes it likely that the cap would limit the government contribution provided to beneficiaries and since the proposed growth rate is much slower than the projected growth in health care costs, CBO estimates that new beneficiaries could pay up to $2,200 more by 2030 and up to $8,000 more by 2050.
Back in 2010, Rep. Ryan protested when his plan was rightly described as rationing. "Rationing happens today!" Ryan protested, "The question is who will do it? The government? Or you, your doctor and your family?" But then as now, he omits the real culprit: private insurers who can deny coverage, jack up premiums and cherry-pick healthier customers. Three years, three budget plans and two name changes later, Paul Ryan's Medicare privatization scheme will still lead to de facto rationing of health care for tens of millions of future elderly Americans.
6. 38 Million More Uninsured
Despite the Republicans' twin defeats by American voters and the U.S. Supreme Court, Paul Ryan is nevertheless still calling for the repeal of Obamacare. Ryan's budget slashes Medicaid by 44 percent over the next decade and hands over the funds as block grants to the states. By undoing both Uncle Sam's subsidies for Americans purchasing insurance in the private health care exchanges and the Medicaid expansion increasingly supported by many Republican governors, the House GOP plan would leave an estimated 38 million more people without health coverage.
That figure is even larger than the 27 million Americans forecast to gain insurance by 2020 as a result of Obamacare. The reason is straightforward: states will continue to reduce eligibility and slash benefits for the $350 billion a year Medicaid program that currently serves 60 million Americans. As the CBO warned, state block grants that won't keep up with the growing cost of health care would invariably lead to cutbacks that "involve reduced eligibility for Medicaid and CHIP, coverage of fewer services, lower payments to providers, or increased cost sharing by beneficiaries—all of which would reduce access to care." The result, as Huffington Post reported this week:
According to one evaluation of the budget Ryan introduced last year, his block-grant plan would reduce Medicaid enrollment by half. Combined with his proposed repeal of Obamacare, that would mean 37.5 million fewer people would have Medicaid coverage were Ryan's 2012 proposals made law, the Urban Institute and the Henry J. Kaiser Family Foundation concluded last October. The Medicaid cut in Ryan's new budget plan is $54 billion smaller than the proposal analyzed in the 2012 report.
All of which means Paul Ryan's supposed "patient-centered" health care philosophy will have a real life body count. As one Harvard Medical School study revealed, an estimated 45,000 people die each year due to lack of health insurance.
7. Slashing Medicare and Medicaid Benefits, But Keeping the Tax Revenue
From the beginning, Republican opponents of the Affordable Care Act have lied to the American people about its deficit-cutting benefits. When the nonpartisan CBO reported that the Obamacare would not only pay for itself but in fact reduce the national debt, House Majority Leader Eric Cantordecried the agency's "budget gimmickry." But with Paul Ryan's new budget, the House GOP is tacitly acknowledging the savings Obamacare will produce.
For starters, Ryan once again is pocketing the $760 billion in Medicare savings from the Affordable Care Act to help pay for his gilded-class tax cut windfall. But the House Budget boss doesn't stop there. His budget keeps the new Medicare payroll and capital gains tax surcharges for households earning over $250,000 a year. In addition, the GOP plan also maintains the $600 billion in new tax revenue from the recently concluded "fiscal cliff" deal. All told, Ryan's Republicans are counting on roughly $2.2 trillion in funding they opposed.
8. Non-Defense Discretionary Spending at Lowest Level in Decades
On Thursday, House Appropriations Committee Chairman Hal Rogers (R-KY) acknowledged he would vote for Ryan's budget even though "it's not to my liking."
"It cuts too much spending, frankly, from the discretionary side of the budget. Most people don't realize that we only appropriate 1/3 of federal spending ... and we've cut that by $100 billion over the last two years."
Rogers' is a case study in understatement. Non-defense discretionary spending (that is, the part of the budget outside of the Pentagon, Medicare, Medicaid, Social Security and the interest on the national debt) is smaller now than in 2008. And the Center on Budget Policy and Priorities explained, Ryan's roadmap would reduce combined education, R&D, infrastructure, food stamps, college loans and discretionary domestic programs to levels not seen in decades. (Last year, CBPP found that 62 percent of Ryan's $5 trillion in spending cuts comes from programs for lower income Americans.)) With over $700 billion in cuts in addition to the sequester reductions, "funding for those programs will shrink by 2017 to its lowest level on record as a share of the economy, in data that go back to 1962, and fall further thereafter."
This chart of Ryan's previous budget proposal from the Economic Policy Institute tells the tale:
To put that in perspective, Jed Graham took us back to 1948:
By 2023, under Paul Ryan's budget, the entirety of federal spending outside of Social Security and interest on the debt (16.4% of GDP in 2012) would shrink to 11.2% of GDP, a level not seen since 1948 -- before ObamaCare, Medicare, Medicaid, NASA, the interstate highway system and almost before the first baby boomers were born.
Americans may claim that they want government spending cut. As it turns out, just not on any of the programs facing Paul Ryan's budget ax.
9. Two Trillion Dollar Flip-Flop on Defense Spending
Paul Ryan's flip-flop on Obamcare's Medicare savings (he was for it before he was against before he was for it again) isn't the only one contained in the latest version of his budget encyclical. He is now calling for caps on defense spending in keeping with the 2011 Budget Control Act. As the Wall Street Journal pointed out, that's a complete turnaround from the platform of GOP vice presidential candidate Paul Ryan just six months ago:
The House Budget Committee chairman's proposal marks a significant reversal for the GOP since just last fall. Mitt Romney, the party's 2012 presidential nominee, who made Mr. Ryan his running mate, campaigned on a plan to markedly increase the Pentagon budget, saying it should represent no less than 4% of gross domestic product.Mr. Ryan's budget calls for $560.2 billion in defense spending in 2014, roughly $100 billion less than the 4% formula. Over 10 years, he would spend at least $2.3 trillion less on defense than he and Mr. Romney advocated.
10. Cutting Historically Small Federal Workforce by 10 Percent
Like his running mate Mitt Romney, Paul Ryan is targeting federal government workers in his new budget. He not only wants to slash the ranks of the workforce by 10 percent through attribution, but wants to freeze their pay as well. As his budget document states:
"Immune from the effects of the recession, federal employees have received regular salary bumps regardless of productivity or economic realities."
In reality, federal workers have had their pay frozen for two years. But more importantly, as a percentage of the U.S. population Uncle Sam's workforce is near the lowest level in 50 years:
As Ezra Klein explained the OMB chart above two years ago:
The long view is that federal employees are plummeting as a total share of the workforce. "In 1953, there was one Federal worker for every 78 residents. In 1989, there was one Federal employee for every 110 residents. By 2009, the ratio had dropped to one Federal employee for every 147 residents." You can see that in the graph atop this post, which comes from the same report.The personnel gains that are happening are happening on the "security" side -- which includes, in this data, the Departments of Treasury, State and Justice, in addition to Veterans Affairs and the Department of Defense. According to OMB, "Overall, security agency employment grew by 22 percent from 2001 to 2010. During the same period, employment in non-security agencies as a percent of population fell by 4 percent."
As a quick glance at the numbers from the Office of Personnel Management show, total executive branch employment was slightly higher in 2011 under President Obama (2.76 million workers) than in 2008 (2.70 million). But the federal workforce contracted significantly under the Clinton-Gore "reinventing government" initiatives in 1990's, declining from its Reagan-Bush peak of almost 3.1 million.
(It should be noted that while federal employment has been basically flat during President Obama's tenure, state and local governments have shed over 600,000 workers just since the summer of 2009. Those jobs losses and the loss of consumer spending power they entail undermined U.S. economic growth while adding a full point to the American unemployment rate.)
Speaking to an adoring audience at the Conservative Political Action Conference (CPAC) on Friday, Congressman Paul Ryan warned that the national debt is a "moral failure" that could also lead to interest rates quadrupling. Warning that "chaos is fertile soil for liberalism," Ryan tried to poke fun at President Obama and his Democratic allies:
"The Vatican is not the only place blowing smoke this week."
Of course, the joke should be on him. After all, anyone who reads Paul Ryan's budget and believes its claims that it will balance the budget, help the middle class, preserve the social safety net and drive economic growth must be smoking something, all right. Then again, Ryan must have been dropping acid when he wrote it.