House Speaker John Boehner’s new budget proposal would essentially require, as the price of raising the debt ceiling again early next year, a choice between deep cuts in the years immediately ahead in Social Security and Medicare benefits for current retirees, repeal of health reform’s coverage expansions, or wholesale evisceration of basic assistance programs for vulnerable Americans.
The plan is, thus, tantamount to a form of “class warfare.” If enacted, it could well produce the greatest increase in poverty and hardship produced by any law in modern U.S. history.
This may sound hyperbolic, but it is not. Both the mathematics and the politics are clear.
- The Boehner plan calls for large cuts in discretionary programs of $1.2 trillion over the next ten years, and it then requires additional cuts that are large enough to produce another $1.8 trillion in savings to be enacted by the end of the year as a condition for raising the debt ceiling again at that time.
- The Boehner plan envisions no tax increases, with its entire $1.8 trillion in additional deficit reduction coming from budget cuts. Speaker Boehner gave documents to House Republican caucus members stating that the $1.8 trillion would come from “entitlement reforms and savings” and that the plan “includes no tax hikes.” In addition, Speaker Boehner told radio talk show host Rush Limbaugh that Republicans appointed to the special committee that will craft the $1.8 trillion in savings won’t support tax increases and, in the unlikely event that that committee proposed a plan with tax increases, House Republicans would vote it down anyway.[1] A House GOP aide told National Review more bluntly: “We appoint members to the committee, and we’re not appointing any Republicans who will vote for tax hikes.”[2]
- The first round of cuts under the Boehner plan would hit discretionary programs hard through austere discretionary caps that Congress will struggle to meet; discretionary cuts thus will largely or entirely be off the table when it comes to achieving the further $1.8 trillion in budget reductions. As Speaker Boehner’s documents make clear, virtually all of the $1.8 trillion would need to come from cuts in entitlement programs. (Cuts in entitlement spending totaling more than $1.5 trillion would produce sufficient interest savings to achieve $1.8 trillion in total savings.)
- To secure $1.5 trillion in entitlement savings over the next ten years would require draconian policy changes. Policymakers would essentially have three choices: 1) cut Social Security and Medicare benefits heavily for current retirees, something that all budget plans from both parties (including House Budget Committee Chairman Paul Ryan’s plan) have ruled out; 2) repeal the Affordable Care Act’s coverage expansions while retaining its measures that cut Medicare payments and raise tax revenues, even though Republicans seek to repeal many of those measures as well; or 3) eviscerate the safety net for low-income children, parents, senior citizens, and people with disabilities. There is no other plausible way to get $1.5 trillion in entitlement cuts in the next ten years.
The foregoing is excerpted from a Press Release from the CENTER on BUDGET & POLICY PRIORITIES (July 27, 2011). It was released for intended republication.
The Dissenting Democrat 