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Meet Paul Ryan, Champion of the Rich and Anti-Poverty Fraud

November 20, 2013

On Monday, the Washington Post ("Paul Ryan, GOP's budget architect, sets his sights on fighting poverty and winning minds") published a glowing profile of failed 2012 Republican vice presidential candidate Paul Ryan. His extremist makeover, the Post suggests, can be summed up by Jesus Christ and Jack Kemp, the two names whose emphasis on charity and lower-class economic empowerment are at the center of Ryan's effort to project a friendlier face of the GOP.
Unfortunately for Ryan, most Americans will recall the two words he repeatedly used--"makers and takers" to divide the nation into those he and his GOP colleagues deem deserving and undeserving. And as his House GOP budget passed three years in a row by 95 percent of Congressional Republicans shows, Paul Ryan has left little doubt whose side he is on. With his massive tax cut for the wealthy, draconian cuts to social programs, the lowest level of non-defense discretionary spending since the 1950's and red ink as far as the eye can see, Paul Ryan's new words don't match his deeds.
In Matthew 19:24, Jesus said, "It is easier for a camel to go through the eye of a needle, than for a rich man to enter into the kingdom of God." But as this chart shows, under Paul Ryan's tax plan the rich will do very well here on earth:

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. March, 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 $330,000 (15.4 percent) a year. As TPC's Howard Gleickman summed up the math:

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.
While Ryan wants to deprive the U.S. Treasury of roughly $6 trillion over the next decade, his impact on the America's poor and elderly would be just as dramatic. His budget blueprint repeals Obamacare and cuts Medicaid funding by a third, leaving an estimated 38 million more people without health insurance that currently projected. His underfunded voucher scheme inevitably rations Medicare and significantly shifts costs onto future generations of American seniors. All told, the Economic Policy Institute concluded last year:

The current level of domestic discretionary spending is 4 percent of GDP, about equal to the historical average since the early 1960s. As the graph below shows, Wisconsin Rep. Paul Ryan's budget implements massive cuts to the domestic discretionary budget, bringing it to 2.1 percent of GDP, the lowest level in over 50 years.

Last December, the nonpartisan Congressional Budget Office CBO warned that "going over the fiscal 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. While that result was largely averted, Paul Ryan's House GOP budget for fiscal year 2014 would have proven 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.

Despite those savage cuts, Paul Ryan's House Republican budget would still produce more national debt than any budget proposal offered by the Obama White House for a very simple reason. Ryan's Treasury-draining tax cuts far exceed his spending reductions. As the Center for American Progress explained of the 2012, pre-sequester version of Ryan's budgetary road map:

But the House budget's entire claim to deficit reduction is built on the foundation of those fantasy revenue levels. Without them, the debt goes up, not down. In fact, with all the House budget's tax cuts properly accounted for, revenue would average just 15.3 percent of GDP from 2013 through 2022, not 18.3 percent. The result: deficits would never drop below 4.4 percent of GDP, and would rise to more than 5 percent of GDP by 2022. The national debt, measured as a share of GDP, would never decline, surpassing 80 percent by 2014, and 90 percent by 2022. By comparison, President Barack Obama's budget proposal, released in February, would stabilize the debt by 2015, and bring it down to 76 percent by 2022.

Now in Ryan's defense, the picture would be somewhat brighter if he would define what he means by the "base broadening" he claims will accompany his lower tax rates. But since he first unveiled his first Road Map for America's Future over three years ago, Congressman Ryan hasn't had the courage to name a single one of the tax breaks, deductions and loopholes that now Uncle Sam nearly $1.3 trillion a year. Without doing that, Ryan's budget will hemorrhage ever more red ink--forever.

So what will it be? Will Ryan call for limiting or ending the $99 billion per year home mortgage interest deduction? The $58 billion Earned Income Tax Credit Ronald Reagan called "the best anti-poverty, the best pro-family, the best job creation measure to come out of Congress?" The $52 billion lost annually to the deduction for charitable giving. All Ryan will say is that he wants to "'stop subsidizing the wealthy. 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." But when pressed on how he would do that, he decided discretion was the better part of valor. As he explained to Joe Scarborough two years ago:

"We want to do this in the light of day and in front of everybody. So the Ways and Means Committee, which is in charge of the tax system, sent us the plan here, which is a 10 and 25 percent bracket for individuals and small businesses, and then they want to have hearings and, in light of day, show how they would go about doing this."

During the 2012 presidential campaign, the Romney-Ryan ticket pulled the same stunt. Without naming a single tax break they would curb, Ryan's running mate promised only that the top "1 percent keeps paying the current share they're paying or more."
Even after assuming the closure of tax loopholes and deductions which disproportionately favor the rich, the Tax Policy Center forecast that President Romney would cut taxes for the richest five percent of earners while increasing the tax bill for the other 95 percent of Americans. It's no wonder Ezra Klein concluded that "'broadening the base and lowering the rates' is anti-family tax reform," adding:

"The size of the tax cut he's proposing for the rich is larger than all of the tax expenditures that go to the rich put together. As such, it is mathematically impossible for him to keep his promise to make sure the top one percent keeps paying the same or more."

Or to put it in a way the new Paul Ryan would understand, his budget means lower spending and higher taxes for "the least of these." As for the rich, they'll be riding even bigger camel through the eye of the needle.


About

Jon Perr
Jon Perr is a technology marketing consultant and product strategist who writes about American politics and public policy.

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