Nel's New Day

March 18, 2015

Congressional Budgets Separate GOP Legislators

The House budget blue-print for next year was unveiled yesterday, waiting to go through the sorry “sausage” process of legislating. Its usefulness lies in demonstrating the GOP disregard for most of the people in the United States. Rep. Paul Ryan (R-WI) is no longer chair of the House Budget Committee, but his replacement, Rep. Tom Price (R-GA) mouths the same unbelievable excuses for trashing the safety net of people in the United States. In Washington-speak, Price said, “When Washington forgets the limits of its own understanding and power … social and safety net programs stop being a bridge to a more secure future and rather become a barrier to success.” The translation is that the GOP excuses its stripping benefits for people by saying that it’s all for everyone’s own good, perhaps similar telling children they will be more independent if they are hungry.

The budget plans to move Medicaid and food stamps (SNAP) into “block grants” for states. In that way, states can use the money that they get for the poor and then transfer the funding into the general fund that has been depleted by giving huge tax subsidies to corporations and huge tax cuts for the wealthy. The Kaiser Family Foundation estimates that block grants for Medicaid would increase the uninsured numbers to between 14.3 million and 20.5 million by 2022. The same block grant process was used during the 1990s for Temporary Assistance for Needy Families Program (TANF), leaving spending for that program flat after far more people fell into poverty and should have been eligible for benefits. The Price budget also made a ten-year $165 billion cut in mandatory outside health and retirement programs; SNP is the biggest program in that area. Ryan’s budget cut of $137 billion last year was an 18-percent reduction.

Yesterday’s House budget plan also proposed repealing the Affordable Care Act. At this time, the number of uninsured people in the United States has dropped by 16 million people to 34 million because of expanded Medicaid in many states, cheaper insurance, and young adults’ ability to stay on their parents’ plan. Keeping the law would drop the number of uninsured to about 26 million. The GOP wants the number of uninsured to increase to 50 million people, as would happen without the ACA according to the CBO. This is 50 million uninsured people plus the 20 million who have lost Medicaid for a total of 70 million uninsured people by 2022. The GOP is talking about an Obamacare “replacement,” but legislators have no plans for one. Although the budget proposal included the ACA repeal, it kept the savings that the ACA brings to the federal government.

Without itemizing cuts, the budget cuts $400 billion from Ryan’s budget by cutting mandatory spending, consolidating programs, streamlining regulations, and eliminating waste, fraud and abuse, according to Price’s report. The $1.017 trillion ceiling on spending in the fiscal year beginning on October 1 would be divided between $493 billion for domestic discretionary programs and $523 billion for the Pentagon’s base budget with $90 billion added to the base in the overseas contingency operations (OCO) fund.

Today’s Senate release of their budget also repealed the ACA, created block grants for Medicaid and food stamps, and cut domestic programs. As Jonathan Weisman wrote in the NYT, “the first Senate Republican budget since 2006 is long on ambition but short on details. It foresees cutting $4.3 trillion from mandatory programs like Medicare, food stamps and Medicaid, but unlike the House budget, it does not make specific policy prescriptions, such as converting Medicare into a voucherlike program that would allow recipients to buy subsidized insurance on the private health care market.” The Senate also proposed gaining billions of dollars by reducing education programs, freezing Pell Grants, and stopping regulatory actions under the Dodd-Frank Wall Street law.

The budget has caused a war, according to Sen. Lindsey Graham (R-SC), within the GOP congressional members between the fiscal hawks and defense hawks. Congress cannot overturn the Budget Control Act of 2011—better known as the sequester—which established ten years of spending caps and across-the-board spending cuts without another act of Congress. The war is even more embarrassing because the GOP bitterly criticized the Democrats for their failure to pass budgets while they controlled Congress. President Obama has proposed raising spending caps for the next fiscal year by $80 billion with half going to domestic programs, but the GOP wants defense to get everything. Sen. Thom Tillis (R-NC) called the caps “a disaster” which “thematically” must go. This is his first year for the process.

Like the House,  GOP Senate defense hawks demand that the budget include the “deficit-neutral reserve fund,” allowing the Pentagon to break budget ceilings set by law almost four years ago. A deal in 2013 between then-House Budget Committee Chairman Paul Ryan (R-WI) and then-Senate Budget Committee Chairwoman Patty Murray (D-WA) gave two years of escape from the spending caps, but that deal has now disappeared for future budgets.

The fanatical GOP cry for more austerity will drive the economy back into the hole as it fails to create jobs and put money into workers’ pockets. Long-term economic growth could come from a strong surface transportation reauthorization bill, one which the GOP refuses to address. The $11 billion transportation funding expires on May 31, and lawmakers are making noises about a short-term extension blocking contractors from any long-term projects. Construction typically begins in the spring, and Rep. Peter DeFazio (D-OR) said, “States have already notified the federal government that they will be delaying or postponing or canceling projects.”

At the same time, GOP policy is to lower taxes and raise subsidies for the wealthy and corporation, putting more stress and probably higher taxes on the middle class and poor—again shrinking the economy.

In analyzing tax subsidies for different economic levels, the Corporation for Enterprise Development found that the top 1 percent received $95 billion in tax subsidies for housing, education, retirement and savings in 2013, $5 billion more than the $90 billion received by the bottom 80 percent. The top 0.1 percent, with an average annual income of $7.6 million, received an average of $33,391 in federal tax payouts in these areas compared with the $1,000 for the bottom 60 percent, who earn less than $65,000. President Obama met a firestorm when he proposed doing away with tax benefits for 529 college savings plans in which families can contribute up to $14,000 a year. Households with incomes above $150,000 received 80 percent of that program’s tax benefit. Seventy percent of deductions for mortgage interest payments and property taxes, a total of $98.5 billion cost to the government in 2014, went to the top 20 percent of earners; the average gain for a household in the bottom 20 percent, earning less than $21,000 a year, was $3.

Meanwhile the nation reached its statutory debt limit last Monday. The Treasury Department is hunting for money to keep paying bills with a catastrophic default about the same time this fall that the GOP needs to stop—or start—another government shutdown. The GOP has the majority in both chambers, but neither leader has shown much ability in managing their caucuses. Some GOP senators such as Jeff Flake (AZ) and Orrin Hatch (UT) have expressed no enthusiasm for using the debt limit as leverage for immigration. Hatch even understands that blocking the limit doesn’t stop spending already authorized. On the other hand, Sen. Mike Crapo (R-ID) wants the debt ceiling as leverage for “further reforms,” and Price wants the “Boehner Rule,” demanding one dollar in spending cuts for every dollar in extra borrowing.

Both budgets rely on the GOP’s euphemistic term “economic feedback.” The term used by the nonpartisan Congressional Budget Office of “dynamic scoring” isn’t any better. That means that increased revenue in the budget is based on a guess of increase in such areas as tax cuts that the GOP think will occur—no substance, just assumption. In other words, Congress claims that tax cuts for corporations will provide more revenue so it put their guess into their budgets.

Dana Milbank described the House budget—rolled out on St. Patrick’s Day—as a “gimmick” in which the creators “employed lucky charms and mystical pots of gold to make them appear more sober about balancing the budget than they actually are.” His analysis of the budget:

  • It pretends to keep strict limits on defense spending — so-called “sequestration”–but then pumps tens of billions of extra dollars into a slush fund called “Overseas Contingency Operations.”
  • It assumes that current tax cuts will be allowed to expire as scheduled — which would amount to a $900 billion tax increase that nobody believes would be allowed to go into effect.
  • It proposes to repeal Obamacare but then counts revenues and savings from Obamacare as if the law remained in effect.
  • It claims to save $5.5 trillion over 10 years, but in the fine print—the budget plan’s instructions to committees—it asks them to identify only about $5 billion in savings over that time.
  • It assumes more than $1 trillion in cuts to a category known as “other mandatory” programs—but doesn’t specify what those cuts would be.
  • It relies on $147 billion in additional revenue from “dynamic scoring,” a more generous accounting method.
  • It doesn’t account for the $200 billion plan now being negotiated to increase doctor payments under Medicare and to extend a children’s health care program.

As Milbanks concluded, “[The budget] was the latest instance of the Republicans discovering how difficult it is to govern now that they have unified control of Congress.” When asked about specifics at the press conference rolling out the budget, Price answered questions with this statement: “Because we believe in the American people, and we believe in growth.” replied Price, predicting that higher-than-expected economic growth would boost tax revenues.

Again, the GOP has shown that they aren’t ready for prime time; they just show that their priorities aren’t most of the people in the United States.

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2 Comments »

  1. Dismal, dismal.

    Like

    Comment by Lee Lynch — March 19, 2015 @ 8:38 PM | Reply

  2. Hi, Nel, Did you ever watch the political drama, HOUSE OF CARDS, starring Kevin Spacey? Wow – it really shows a lot of the wheeling and dealing and lying and shuckin’ and jivin’ and hijinks done by our elected “sausage” makers. It’s in the third season now via Netflix. Lori

    Like

    Comment by Lori L. Lake — March 19, 2015 @ 6:32 PM | Reply


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