On March 20, 2012, House Budget Committee Chairman Paul Ryan (R-WI) released the GOP budget proposal for 2013. As feared, it is a plan that would harm the middle class while providing a windfall for millionaires. Ryan‘s budget makes deep, lasting cuts to many domestic programs, including Medicare, Medicaid, nutrition and housing programs. Meanwhile, it increases defense spending by $228 billion through 2022. The Ryan budget would also repeal the Affordable Care Act (ACA), leaving 34 million people without health insurance coverage. While the budget gives the appearance of eliminating certain tax breaks for the wealthy, it then uses those very savings to fund other tax cuts. Most alarming perhaps are its proposals to end Medicare as we know it. And while his plans for Social Security are not as direct, don‘t be fooled: Ryan is still on a mission to privatize Social Security in ways that would leave the program and its critical TrustFund on life support. These proposals spell danger for the millions who rely on them and for the millions who are counting on them to be there in the future.
Ryan‘s Plan Ends Medicare As We Know It
Voucherizes Medicare: Ryan‘s 2013 budget replaces Medicare‘s guaranteed benefits with a —premium support“ payment that beneficiaries would use towards the cost of private insurance or traditional Medicare starting in 2023. The amount of this voucher would be based on the second cheapest available plan in the area. There is no guarantee that this payment would actually cover enough of a premium‘s cost to actually make health care affordable. In fact, it is more than likely that beneficiaries would be left with increased out of pocket costs, because Ryan‘s plan caps the amount of the voucher at GDP +0.5 percent, far below the growth in health insurance costs in recent years. In fact, the Congressional Budget Office has estimates that new beneficiaries could pay more than $1,200 more by 2030 and more than $5,900 more by 2050 under this scenario.
Threatens Medicare‘s Vitality: Medicare works for many reasons, one of them being that its volume of beneficiaries gives it better bargaining power when negotiating rates with providers. This feature keeps costs down for both the government and the beneficiary. Under the Ryan 2013 plan, private insurers would cherry pick the younger, healthier and less expensive beneficiaries. Leaving Medicare with a disproportionate share of the oldest, sickest and costliest beneficiaries would drive up costs for the program and set it on an unsustainable path.
MARCH 20, 2012 - Following is a statement by Alan W. Houseman, executive director of CLASP, The Center for Law and Social Policy, regarding the House FY 2013 Budget Resolution released today by Budget Committee Chairman Paul Ryan.
"House Republicans today released a budget that once again is strong on rhetoric but weak on reasonable ideas regarding how to restore prosperity to the economy, not to mention strengthen the nation's families and provide pathways to education, work, and economic security. The budget harkens back to the failed theory of trickle-down economics by providing tax cuts to those at the top, preserving special treatment for capital gains, cutting deductions for most workers and offering a vague hope that the benefits will eventually trickle down to ordinary Americans.
"The so-called Path to Prosperity explicitly notes its goal to reduce the size of the federal government and envisions a fundamentally flawed ‘path to prosperity' that slashes critical programs including Social Security, Medicare, Medicaid, food stamps, and Pell grants. These cuts would put the core elements of the American dream–access to education and training to get a good job, health care when you are sick, and economic security in retirement–out of reach for millions of families.
"The economy is still recovering. While unemployment has steadily declined in recent months, it remains historically high. Many families are getting back on their feet but others are still struggling. Demonizing government and vital safety net programs that help ordinary families without offering a realistic path forward is counterproductive.
"Lawmakers on both sides of the aisle have said over the past three years that deficit reduction should not come at the expense of vulnerable families and individuals. This budget proposal pays lip service to the idea of protecting the safety net and vulnerable families but then proposes that the poor, the disabled, and the elderly should carry the greatest burden for deficit reduction, while protecting millionaires and defense contractors. Congress and the American people should reject this doublespeak and misaligned vision of the nation's future and move forward with a realistic and shared pathway to prosperity that includes the most vulnerable among us."
March 20, 2012 – Washington, D.C. – The budget proposed today by House Budget Committee Chairman Paul Ryan (R-Wisc.) would abandon the many strengths of the Supplemental Nutrition Assistance Program (SNAP), increase hunger and joblessness, and harm the economy. Seventy-seven percent of voters, moreover, oppose cutting SNAP.
For decades, SNAP, the new name for food stamps, has enjoyed strong bipartisan support and has helped ensure the poorest and hungriest people in our nation can put food on the table. SNAP’s responsiveness to unemployment proved it to be one of the most effective safety net programs during the recent recession, providing families with a stable source of food. Households are facing impossible choices among food, home heating, gasoline, rent, medicine and other basic needs. FRAC’s most recent look at food hardship found that nearly one in five Americans said there were times they didn’t have enough money to buy food that they or their families needed in 2011. No state or urban area or congressional district is anywhere close to being hunger-free.
Destroying SNAP’s structure by converting it to a block grant would render it unable to respond swiftly in times of need. Under Chairman Ryan’s block grant structure for food assistance accompanied – according to a Budget Committee spokesperson – by a $122.5 billion funding cut, states would be faced with impossible choices as need increased: Do they cut benefits, or do they place children and seniors on waiting lists for food assistance? And this doesn’t even take into consideration the ability of states to administer the program. In commenting on a recent report regarding shortcomings in state administration by the Center for Public Integrity, the New York Times editorial page noted that states “generally have a poor record of taking care of their neediest citizens, and could not be relied on to maintain lifeline programs like food stamps if Washington just wrote them checks and stopped paying attention.”
FRAC has documented the remarkable decline in spending by low-income families over the last decade. The median family with income less than 185 percent of the federal poverty line fell from spending more than the government’s bare-bones “Thrifty Food Plan” diet in 2000 to spending five percent less in 2010. Chairman Ryan’s budget would accelerate this downward decline to a fall off a cliff.
Numerous studies, moveover, have shown that SNAP as currently structured not only reduces food insecurity but also reduces poverty, is a hugely cost-effective driver of economic growth, and creates jobs.
This is the time to strengthen, not weaken, our nation’s nutrition safety net. A January poll conducted by Hart Research for FRAC demonstrated broad support among Americans for the federal nutrition programs and opposition to cuts. Seven in 10 voters said the federal government should have a major role in ensuring that low-income families and children have the food and nutrition they need. Seventy-seven percent of voters said that cutting SNAP would be the wrong way to reduce government spending.
Chairman Ryan’s proposal to destroy the structure of the program and slash its funding is an old idea that has always been misconceived, and that places the burden of deficit reduction on the most vulnerable among us. Congress should oppose this misguided and harmful effort, as well as the other attempts to shred our nation’s safety net.