Programs that provide affordable health coverage for the middle class (Obamacare, which they repeal) and the poor (Medicaid, which is “block granted”) face large spending cuts. Future elderly persons do not escape unscathed, either, as Medicare is “voucherized” beginning in 2024. The budget includes more than $1 trillion in unspecified cuts that would appear to fall on nutritional support for the poor and tax credits for low-income, working families.
These cuts are inevitable in the following sense. The budget plan purports to balance spending and tax revenue in 10 years. Meanwhile, the Republican caucus will not raise any tax revenue, though it does, as I’ll show in a moment, propose tax cuts (or at least such cuts are implicit in the plan). The one area where the Republicans boost spending is defense (though through a gimmick they once called “a backdoor loophole”— adding in money for overseas wars, which doesn’t count against the defense spending cap), and, as noted, they won’t go after near-term entitlements: Any Medicare cuts occur outside of the 10-year budget window.
What’s left to cut? All the low- and middle-income programs noted so far, along with “non-defense discretionary” spending: the annual appropriations for many education and training programs, research, infrastructure, and investments in less advantaged kids.
Though cuts in top tax rates are largely unspecified — Republican budget writers have learned over the years to leave out specifics — the budget does include cuts in taxes on capital gains and stock dividends (through the repeal of Obamacare), along with cuts for business income and the foreign earnings of multinational corporations.
Now, think about the math here. To get to balance, all those spending cuts have to cover all those tax cuts, and then, above and beyond that, take the budget deficit down to zero by 2024 (all this while raising defense spending). The only way to get there — and we’ve seen this in all the previous House budgets written by Paul Ryan — is the magic asterisk that assumes extra revenue comes from somewhere (i.e., somewhere other than higher tax rates): Don’t ask, they won’t tell.
Based on demographics alone, the plan departs from reality:The share of elderly Americans is expected to rise from about 15 to about 20 percent over the next 20 years. According to economist Larry Summers, about a third of the federal budget is spent on those above age 65. When a group whose income and health security depends in no small part on about a third of the budget is growing quickly, we either must devote more revenue to their health and retirement security or do less for them.
Similarly, income inequality, poverty, economic immobility, the absence of full employment, rising health and education costs, the need to respond to cyclical downturns like the deep recession from which we’re finally recovering — all of these argue for stronger investments in people and public goods.
And I didn’t even mention environmental pressure, though I should add that under the heading “eliminating waste” the Republican budget plan notes with disgust that the DoD and the CIA “currently spend part of their budget studying climate change.” What are they thinking?!
So that’s the “strange” part, as in a serious departure from reality. But I also called the budget “unrepresentative.” In what sense?
I don’t believe you could find majoritarian support for this sort of a budget in America. In fact, I doubt you’ll see much support for it even among partisans on Capitol Hill. We’ve already seen Senate Republicans, particularly those running for office in swing states, expressing discomfort with the non-reality of the plan. Other conservatives who want more defense spending recognize they’ll never get it through this White House at the expense of non-defense spending and programs for the least advantaged. Even if I’m wrong that the Republicans themselves won’t be able to pass this budget and reconcile it with their Senate colleagues, it is inconceivable that there would be a veto-proof majority for it.
In other words, this budget is deeply unrealistic not just in economic terms but in political terms. It’s going nowhere.
Which leads to the very important question of how we got to where we are. How has our government become so deeply unrepresentative of economic and even political realities?
Surely increased money in politics is playing a role, but while that’s gotten worse in recent years, it’s a very old problem. There’s something else behind this dysfunction.
I’m increasingly moved by analysis of the type at the end of this recent New Yorker article on income inequality by Jill Lapore. She cites comparative research across democracies suggesting that policies to push back on inequality are less likely to be enacted here because political power itself is malapportioned in the United States relative to more parliamentary systems wherein it’s far harder for a minority to hijack the process.
If she’s right, that’s not something we’re going to fix soon. It is therefore up to all of us to fix it ourselves. I’m not suggesting for a moment that everyone reading this post would write the same budget I would. But perhaps there are enough reasonable people who are fed up with round-the-clock dysfunction and such vast departures from reality as this budget plan.
If we’re ever to once again meet the challenges we face, then the battle cry “Washington’s broken. Send me there and I’ll make sure it stays that way!” must cease to inspire.