The 2013 House Budget Proposal
http://thedianerehmshow.org/shows/2012-03-20/2013-house-budget-proposal
Later this morning Republican Congressman Paul Ryan announces the House 2013 budget proposal. The plan will likely include reduced and simplified tax rates and also a premium support program for Medicare. No one expects this version to pass, but it will establish key markers in the budget battles ahead both with Democrats and Republicans. Some conservatives support seeking spending cuts beyond the cap established after months of negotiation with Democrats, and many hope the plan will scale back major cuts currently slated for the Defense Department: Please join us for a conversation on the House budget plan and election year politics.
Guests
Jared Bernstein
senior fellow, Center on Budget and Policy Priorities; former chief economist and economic policy adviser for Vice President Biden.
Vin Weber
Republican consultant, former member of Congress representing Minnesota's 2nd district (1981-93).
Rep. Chris Van Hollen
Democrat of Maryland, member of the 12-person Joint Select Committee on Deficit Reduction.
Alice Rivlin
senior fellow, Brookings Institution, vice chair, Board of Governors, Federal Reserve System (1996-99); director, White House Office of Management and Budget (1994-96); and founding director, Congressional Budget Office (1975-83).
Congressman Michael Burgess
Republican,Texas, 26th District
Comments
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The amazing thing about Ryan's Medicare proposal wasn't that it seemed to shift a substantial amount of burden onto the individual senior citizen but that he and his co-authors seem to be terrifyingly blind to the prospect of tens of millions of senior citizens "shopping" for health insurance and the myriad opportunities for fraud and malfeasance at the expense of senior citizens.
Looking forward to the show.
The idea is that a voucher system would create an atmosphere of personal responsibility, in other words the patient would have an interest that the funds were used as intended. Not just walking into a doctors office sign on the dotted line and be oblivious to the charges for services involved with their care as is happening now. What you suggest exists now in medicare "the myriad opportunities for fraud and malfeasance" at least with Ryans plan patients would by necessity demand accountability. Were either going to come to grips with the fact that Medicare is in the red for two out of every three dollars spent and do something, or the system is going to collapse.
If Paul Ryan had repudiated his votes for the Bush fiscal policies, Medicare Part D, and the invasion and occupation of Iraq, it would be a lot easier to believe that he cares about the deficit.
But, we know about his record, and we know about his priorities.
If Paul Ryan wants to shift health care costs onto seniors, it's simply because Paul Ryan wants to shift health care costs onto seniors.
We can be certain that the deficit that he worked to create has nothing to do with his rationale.
That's fine if you don't like the messenger, but we need to hear the message.
Local, state and federal budgets are out of control and demographic shifts that we can see coming are going to put considerably more pressure on those budgets.
Tough choices have to be made. Taxes will go up and benefits will be cut. We need somebody to have the courage to tell us like it is and we need our politicians to plan for the next 10, 20, ... years not just for the next two.
In Paul Ryan's op-ed in today's Wall Street Journal, he refers to the 1986 tax law changes as a model for tax simplification. In fact, there were so many changes that they renamed the 1954 tax code to the 1986 tax code. You will probably hear that the changes resulted in increased tax revenue in the next couple of years, but what they won't mention is the dramatic decrease in 1986 revenues as the result of companies holding off December 1986 bonuses until January 1987 to take advantage of the new lower rates. The economist Martin Feldstein (see Wall Street Journal op-ed 10/24/11) uses this tax law rationalize more tax cuts instead of the dramatically higher 1981 tax cuts. Why? The 1986 tax law changes were filled with gimmicks to raise revenue right away and gave affluent taxpayers the opportunity to defer income from 1986 into 1987 to take advantage of the rate cuts while the 1981 changes did not. The result - 1981 did not produce the results that the current tax reformers want, even though the prime rate had peaked at over 20% and the economy was poised for recovery.
No matter what poilitical party you are affiliated with, all of the problems stem from a lack of understanding of how the economy should be working to benefit the citizenry. Taxes should be low, wages should be higher for the lower and middle classes, and government should be spending less than what it takes in. The problem is that democrats and republicans each take myopic stances on opposite ends of the spectrum. Republicans don't care about workers making a livable wage (because they believe that somehow lowering taxes will help everyone; even though the lowest wage earners get most of their taxes paid returned to them; and democrats are willing to spend without putting forth viable long-term debt reduction strategies. I'm almost 40 and I have been watching this downward spiral since my first civics class in high school at the age of 15. The economy is a 3 legged stool: wages, taxes, and spending.
By the way, as preparation for my response to Mr. Feldstein's contentions, I reviewed all of the tax returns I prepared for the period Mr. Feldstein referred to and, in every case, not most cases, my high income taxpayers taxable income dropped by at least 20% in 1986 compared to 1985 and in 1987 increased by 20% compared to 1985.
I`m beginning to feel PTSD from the constant attacks on America by the T-Party. Who will be in the cross hairs today?Not only the Washington D.C. attacks,but the Columbus Ohio ones as well. Wherever the T-Party is successful in getting the Government to stand down,a Corporation sends me a bill raising my bill.
Remind me again - why is Grover Norquist, the unelected tax zealot and GOP lobbyist, allowed to play such an influential role in this? Why doesn't everyone simply ignore his pledge not to raise taxes? Is he that powerful in defeating people who go against him?
Maggie in Fort Worth
Many of the partisan views expressed on this show by the spokespeople are a supreme example of why nothing gets done in the congress. I do agree with the comment that this is a starting place and should be received as such instead of tearing it down before it is discussed, and in fact we don't even know the details yet. One thing I did hear was that it would allow seniors to receive a voucher to obtain private insurance and give some much needed competition to the bloated medicare model.
The American people do NOT want any cuts to Medicare, and there is NO reason they should have to suffer any. Under Ryan's plan, the seniors in this country would suffer greatly. Surely the people in his district would not be supporting this travesty of a bill? Where is his head at, and the heads of the rest of the GOP?
A quick note about revenues of 18% of GDP just mentioned: The Wall Street Journal pointed out, accidentally of course, in an op-ed on February 14, 2012, that the current level of tax rates are unsustainable. Only two years during Mr. Bush's administration did revenues ever reach 18% of GDP - 2001 before the cuts took effect and 2006.
For argument sake if the Ryan plan were implemented how much actual revenue would be raised?
Until Medicare was passed, seniors were the group at greatest risk of becoming impoverished due to medical bills. Ryan's proposal to make Medicare a premium support program instead of guaranteed health care will put seniors at risk once again of becoming impoverished if they become ill. The Medicare Advantage programs have been a cash cow for private, for-profit health insurance companies (they get an extra 12% - 20% more per subscriber than traditional Medicare) yet the health outcomes of seniors are worse for those who go into Medicare Advantage programs. Now, seniors can dis-enroll if they are unhappy with a Medicare Advantage program and return to traditional Medicare. So the private plans "cherry pick" the healthy seniors then dump them when they get sick and costly." Seniors will be stuck with too much risk if we adopt the Ryan proposal. The best way to save Medicare is to move to a single-payer national health program where all of us are in the same risk pool and the healthy (and therefore cheap) balance out the sick and expensive. To give more money to private health insurance companies when they have shown that they are not in the health care business but in the profit making business is the wrong direction for our health care system to go in. Private business is not more efficient - they are just not publicly accountable so they can shield their inefficiencies from public scrutiny unless they have a royal meltdown - like Enron. Even the ACA (e.g., Obamacare) is greatly flawed because it will still be a huge giveaway to private for-profit health insurance companies who get the govt. subsidy to insure the lower income people who qualify. We don't need these insurance company middle-men - they don't provide the health care and they don't create revenue independent of our premiums. They add nothing to health care and take out far too much in resources thus weakening our entire health care system.
The Republicans need to revoke their pledge to Grover Norquist. He said himself the pledge was not to HIM, but to the American people! So the people need to be saying loud and clear NO PLEDGE to all their members of Congress!!!!!
Personally I think the left and right have a well deserved beating coming, insane nanny state spending and insane foreign policy war making in the name of the war on terror. If I did not live in this country I would enjoy seeing those who demand these big government programs get what they deserve.
kathleen, however much they think they would save with this plan would be offset many times by the harm it will do to the people because of poorer health and the strain that will put on the economy, not to mention the increased suffering.
I recently saw the movie The Inside Job. If the movie is based on truth, namely wealthy people who have high stakes in Wall Street and other top financial institutions hold high level government positions, then how can we ever expect change? No matter whether we have a democrat or republican president, it seems like real change for the good of all people is impossible.
Well, what can we expect when we have a political system which has been corrupted by money? The politicians can't vote for those things that would benefit ALL Americans; just those things that can benefit the select few. Our current political system, should it continue as it is, will be the ultimate destruction of our nation.
Gary
Asheville, NC
If there were NO Social Security Trust Fund.NO Medicare Trust Fund,nada,zip. The government`s 1st priority should be to it`s people. NOT BOMBS,AND THE PROFIT FROM BOMBS. For every dollar spent on bombs,a dollar must go toward the people.
The projected cost of "the affordable care act" just doubled according to the CBO.
Another lopsided liberal spun show full of left wing propaganda.
NO COMPROMISE!!!!!
Seems to me that the conservatives, Rivlin included, have very short term and selective memories. We have Medicaire Advantage which conservatives claimed would lower costs - it did the opposite and increased costs by a large margin. Why don't we start basing our policies and legislation on the facts instead of belief? Ideology should guide our decisions but should never create facts and I think we've crossed the boundary where fact is created by ideology.
Is the House poised to double the interest on federal student loans? Is there anything in the Ryan plan having to do with federal student loans?
Let's remember that federal income taxes amount to only 25% of taxes paid in this country. Property and sales taxes shift the tax burden onto the working-poor and middle-class.
All talk about deficit reduction and tax reform misses the mark unless it addresses this shameful fact: In this country billionaire Warren Buffett pays 11% total (federal, state, local, corporate) taxes on $8 billion annual investment gains while a single minimum wage worker pays over 30% in total taxes on her $14,500 annual salary. See http://fairsharetaxes.org for details.
Don't we need a balanced budget act? Everyone should agree budgets need to be balanced. That takes the personal control out of the equation. Then you have no choice but to cut services or raise taxes, and if people won't accept raising taxes then they have to accept the cuts. Nobody wants anything cut. Everybody is totally selfish. If you try to close little Post Offices, the congressman says he will save it. If you were a business CEO you would cut where you weren't making money or you would turn it into a profit.
Regarding the discussion on rationing healthcare: one of the panelists stated that his father died after being diagnosed with cancer 3 months earlier, and his parents rationed their healthcare by opting out of any extraordinary measures taken.
That is not healthcare rationing. They chose what they wanted; no one limited or decided for them.
Rationing (of any item, product, service, etc.) is when an entity determines or limits what is allowed for others, e.g., what the individual can have, and/or how much the individual can get, and/or where the individual can obtain it.
The concept of rationing healthcare is very inflammatory. Elements of the discussion need to be accurate rather than distorted.
I wish Diane would ask Alice how much money the Insurance companies have paid her.
As to rationing. Currently, we have insurance companies rationing care, and we have no say. I'd rather have a bureaucrat doing the rationing, as I can at least vote against them.
What all politicians and most of the media are afraid to say is that much of the American public has an intelligence level and an attention span which is insufficient to understand the tax situation, and yet they vote. This results in politicians and pundits who appeal to them in overly simplified terms, which is what Grover Norquist does. He gets people to follow by just saying "taxes are bad," and that's enough to sway the vote.
When people talk about "premium support" they seldom discuss what insurance costs for someone aged 70 in good health, I recently heard a report that is costs $18,000/yr. Ryan's last proposal would've given less than $10K.
Weber, The reason we are where we are is because George Bush ruined the economy. He left us no room to deal with this financial crisis and here we are. The right has branded the left as tax-and-spend liberals but that is preferable to the borrow-and-spend right. We are witnessing the right approaching the end-game of the "starve the beast" strategy that the right has had since Reagan's days. They seem very close to winning and dismantling any social gains of the 20th century and replacing it with an oligarchy of unprecedented proportions.