The Paul Ryan Plan
Congressman Paul Ryan (R-WI), the Republican Budget Committee Chairman, is being highlighted as a man of vision for the Republican Party. As Americans begin to learn about Ryan’s extreme vision, we wanted to make sure you had a quick reference guide to some of his vision’s core components.
Robin Hood in Reverse – Cutting Taxes for Millionaires, Raising them for Everyone Else, Increasing the Deficit.
The Republican budget drafted by Ryan, and supported overwhelmingly by Republicans in Congress, has been called “Robin Hood in reverse — on steroids.” It would permanently extend the Bush tax cuts, including the richest 2% of Americans, and add new tax breaks that overwhelmingly go to the richest in the country, while not balancing the budget until 2040:
- People with incomes above $1 million would receive a $265,000 average annual tax cut, on top of the $129,000 they receive from extending the Bush tax cuts. Their after-tax incomes would rise by 12.5 percent, on average — seven times more than the 1.8 percent average gain for middle-income households. [CBPP]
- The top 1 percent of taxpayers would receive 45 percent of the new tax cuts, or nearly as much as the rest of the nation combined. [CBPP]
- Middle-class and low-income working families would actually be hit with tax increases under the Ryan plan. To help pay for his tax cuts, Ryan would close middle class tax breaks like the mortgage interest deduction, leaving the typical family paying over $1,300 more a year [JEC] and by not extending President Obama’s tax cuts for working-poor households, people with incomes below $10,000 would see their after-tax incomes fall by 2 percent, on average. [CBPP]
Ending Medicare As We Know It – Shifting Increased Costs to Seniors
To cover the cost of tax breaks for the wealthiest Americans, the Ryan plan asks seniors to pay more for less. His plan:
- Ends the Medicare guarantee and ultimately doubles seniors’ out of pocket health care costs – forcing seniors to pay nearly $7,000 more per year compared to current law. [CBO]
- Reopens the Medicare “donut hole” and increases the cost of preventative care services – like screening for cancer. Reopening the donut hole alone will increase costs for Medicare beneficiaries with high prescription drug costs by over $10,000 on average over the next decade. [House Budget Committee Democrats]
- Raises the age of eligibility for Medicare to 67 and repeals the Affordable Care Act, forcing Americans aged 65 and 66 who don’t have employer-provided coverage to buy insurance that typically has extremely high premiums. If they have a pre-existing condition, they would be unable to buy coverage at any price. [CBO]
Killing Jobs and Failing to Invest in an America That’s Built to Last
Putting Americans back to work is the fastest and most effective way to reduce the short-term deficit. But the Republican budget turns its back on American workers, ignoring the President’s proposals for new jobs for teachers, first responders, construction workers, and veterans involved in building a better infrastructure that will boost our economy now and in the future.
- The Republican budget boosts tax incentives that encourage multinational companies to ship profits, intellectual property, and thousands of jobs overseas while costing the American economy billions of dollars. [House Budget Committee Democrats]
- Independent analysts have found that the Republican budget could lead to the loss of more than 4 million jobs over two years. [EPI]
- A CBO analysis, requested by Chairman Ryan himself, shows that, after several decades, the Ryan budget would shrink the federal government so dramatically that what it does outside of Social Security, health care, and defense would essentially disappear – leaving everything that helps American communities grow and succeed, from transportation and infrastructure, to scientific and medical research, to law enforcement and consumer safety with no funding. [CBPP]
Increasing the Cost of Health Care for Low- and Middle-Income Americans
Under the Ryan plan, families would see the cost of their health care skyrocket – or lose coverage all together.
- CBO found that the Ryan plan would cut programs to help low- and middle-income people afford health insurance — Medicaid, CHIP, and the Affordable Care Act’s subsidies — by more than 75 percent by 2050, with the bulk of the cuts coming from Medicaid. [CBPP]
- The magnitude of the cut in Medicaid and CHIP “means that states would need to increase their spending on these programs, make considerable cutbacks in them, or both. Cutbacks might 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.” [CBPP]
Limiting the Opportunity for Education for American Families
Under the Ryan budget, low- and middle-income students who have worked hard would have fewer educational opportunities. Ryan’s plan:
- Cuts Pell Grant benefits and eligibility – making fewer lower-income students eligible for the grants and reducing the size of the grants for students who still can receive them - eliminating grants to 400,000 students in 2013 alone. [CBPP]
- Allows federal student loan rates to double – from 3.4% to 6.8% – that would have cost over seven million students an additional $6 billion in loan repayment costs for the 2012-2013 school year alone. [Education Committee Democrats]
- Cuts over $100 billion from K-12 education, including reading and math help for low income-students, and would kick 200,000 students out of head start. [NEA]
Hurting the Most Vulnerable
Religious leaders across the nation have called the Ryan plan “immoral”, “unjustified and wrong” and the “height of hypocrisy” because it fails the basic moral test of helping those most in need. Under Ryan’s vision, the best way to ensure poor children get the food they need, and the unemployed get the help they need, is to give more tax breaks to millionaires, hoping some day that the money will trickle down.
- 62% of the budget cuts come from programs that help lower-income Americans. [CBPP]
- Funding for the SNAP food assistance program is gutted, putting tens of millions of Americans at risk of not being able to afford to put food on the table for their families. [CBPP]
- Over $700 billion would be cut from programs, like job training, that help struggling families get back on their feet and make ends meet. [CBPP]
- Millions of Americans would have lost much of their retirement savings during the 2008 financial crisis had Ryan’s plan to privatize Social Security become law. [CAP]
- The GOP continues to cut millions from Social Security operating funds – delaying services and costing the nation more money. This year alone, the GOP proposed “saving” $800 million from SSA funding which the Social Security Actuary says will cost taxpayers $6 billion in uncorrected waste, fraud, and abuse. [Rep. Becerra]