Paul Ryan believes his budget would generate substantial economic growth which, naturally, would be good for low-income Americans. But in concrete, specific terms Ryan's budget enacts very large cuts in programs that benefit poor people.
This is a basic mathematical necessity. Ryan doesn't want to cut programs for the currently elderly, he doesn't want to raise taxes, he doesn't want to reduce military spending and he does want to balance the budget. That requires large cuts in anti-poverty programs. There are also reductions in food stamp spending and in Pell Grants.
In other words, a clear majority of Ryan's cuts come out of the pockets of people in the bottom third of the income spectrum. Here's how net present value works: the government first determines the amount it expects to receive in the future from loan repayments. Under current accounting rules, all the federal credit programs together student loans, mortgage guarantees; loans and loan guarantees for farmers and small businesses; and loans and guarantees from the Export-Import Bank and Department of Energy make the government money.
Under fair-value accounting, they lose money, according to the CBO. The CBO argues fair-value accounting is more accurate. The Center for Budget and Policy Priorities disagrees. Either way, it's a technical switch that wouldn't lead to immediate changes in loan programs.
But it does mean members of Congress would look at them differently. Student loans for graduate students were expanded in to help reduce the deficit.
The projected revenue from that change would look a lot different under fair value. One major reform comes largely outside of the bill's year budget scoring timeline. The budget would change Medicare into a "premium support" program what's that? Though the Ryan budget says this is not a "voucher program," it bears striking similarity to one.
This program would create Medicare exchanges, on which seniors could pick either the traditional Medicare plan or a private plan. Seniors would receive a premium support payment, which they could use toward paying for whichever plan they choose. However, that change would only take effect for people who are 55 and older as of , and - importantly - after In addition, it's important to remember that Ryan's budget and President Obama's budget achieve their numbers in different ways.
Ryan's budget uses "dynamic scoring," a method of tallying up a bill's fiscal effects while including anticipated economic effects. Opponents of dynamic scoring say it is too hard to account for a bill's economic effects, and that doing so requires making assumptions about other economic policies.
His Medicare proposal would hurt seniors : Ryan proposes to transition Medicare away from a set benefit package program, toward a plan where seniors receive a voucher for a certain amount of money to cover health expenses.
Though the plan wouldn't change anything for people under age 55, Democrats argue that it is such a large change that it would "end Medicare as we know it. Also, critics say that Ryan's proposal sets the voucher level too low to cover the average senior's health expenses. Chris Van Hollen, the top Democrat on the House Budget Committee, said Ryan's plan would "see prices skyrocket, and it will mean the end of the current Medicare guarantee.
His Medicaid, food stamp, and Obamacare cuts hurt the poor, and there's no pain for the rich : Ryan would transition both Medicaid and food stamps to "block grant" programs, and he'd cut their overall funding levels pretty deeply.
Liberal think tanks like the Center for Budget and Policy Priorities estimate that Ryan's spending cuts come overwhelmingly from programs to help the poor and middle-class. Meanwhile, the Ryan plan advocates to cut the top individual tax rate down to 25 percent. Senate Majority Leader Harry Reid said that the budget would lead to a "Koch-topia," arguing that the budget is so slanted in favor of the wealthy that it's "protecting the Koch brothers. He's too vague in several areas, and his plan might not even balance the budget : Ryan avoids offering a specific tax reform plan, instead putting out principles that assume some sort of rate-cutting reform that also won't increase the deficit.
Also, to get his budget to balance, Ryan is forced to rely on "dynamic scoring" assumptions that his spending cuts will spur enough economic growth to produce a surplus. Democrats generally scorn dynamic scoring as a skewed metric. This is a running list of substantive updates, corrections, and additions to this card stack. These cards were last updated on April 10, Here is a summary of edits:.
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By choosing I Accept , you consent to our use of cookies and other tracking technologies. Reddit Pocket Flipboard Email. What is Paul Ryan's budget? How did Paul Ryan's balance the budget? The Committee for a Responsible Federal Budget has published a helpful list of Ryan's major cuts : Even with all these cuts, Ryan's budget doesn't quite balance over 10 years.
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Please fill out required fields. Thank You We appreciate your interest and we'll get back to you soon. We're Sorry! Ryan acknowledged on Fox News Sunday that his Medicare proposals over the past several years included vouchers, but he recommended premium support in his budget Tuesday. A premium support model could resemble the existing system for federal employees, said Gail Wilensky, who oversaw Medicare for President George H.
Bush and is now a senior fellow at Project Hope. Like vouchers, it limits government contributions, but also bases the amount on the premium costs of popular, participating health plans. Others counter that premium support and vouchers are the same thing.
A September poll conducted by Pew Research and National Journal found that 69 percent of people older than 65 opposed vouchers for Medicare. That opposition came from both Democrats and Republicans. Thomas Buchmueller, a health economist at the University of Michigan, said the plan sounds much like the Federal Employees Health Benefits Program but also like the exchanges being set up in the health law. Employees and retirees have a variety of options, from catastrophic coverage plans with high deductibles to health maintenance organizations to high-end plans with many choices of doctors.
Everyone has a choice of at least 10 fee-for-service plans, but the exact number varies by where an enrollee lives. FEHBP provides coverage without regard to pre-existing conditions or age. On average, the government pays 72 percent of premiums. But Michael Tanner, senior fellow with the libertarian Cato Institute in Washington, said the comparison is misleading because Medicare outsources some of its jobs to other parts of government such as the Internal Revenue Service, which collects Medicare taxes.
But in , its rates for the enrollee share of premiums increased by an average of 7. Tanner said FEHBP is not perfect but is preferable to the current system because it would reduce federal spending on Medicare. Buchmueller sees pros and cons to the Ryan plan. The risk is that many seniors are not that price sensitive. Oberlander said putting all Medicare beneficiaries in a system where they have to shop for coverage would be confusing for many of them.
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