(Original Post)
I don't understand Republican math.
The budget proposed by Republican Rep. Paul Ryan eliminates Medicare as we know it, gives hundreds of billions of dollars in tax cuts to the wealthiest Americans and claims to balance the budget by 2040. This so-called balanced budget, so-called Medicare reform is a actually neither.
The Bush tax cuts and the wars in Iraq and Afghanistan will account for almost half of the $20 trillion in debt that, under current policies, the nation will owe by 2019, while the stimulus and financial rescues will account for less than 10 percent of the debt at that time. Nevertheless, the Republican-Ryan plan maintains these Bush-era tax cuts while cutting the top individual tax rate from 35 percent to 25 percent, eliminating corporate income taxes and repealing estate taxes. Yet, it still has the audacity to claim it'll keep tax revenues the same.
How do you make $5 when you give away $4? You don't. The only way to keep revenue levels the same is to increase taxes on everyone else. The Citizens for Tax Justice, using real numbers, estimates the Republican-Ryan plan will allow the richest 1 percent to pay an estimated $211,300 less, on average, but force the bottom 80 percent of taxpayers to pay an estimated $1,700 more, on average.
The best part about the Republican-Ryan plan is that it makes no significant progress in reducing the federal budget deficit. It proposes $4.3 trillion in savings by cutting programs for moderate-to-low income families and the elderly; however, these cuts are offset by $4.2 trillion in tax cuts to the wealthy. Meaning, it reduces the deficit by approximately $100 billion over 10 years.
Tax cuts will go toward wealthy companies as well. Over the past two years, ExxonMobil reported $9.9 billion in pretax profits but enjoyed so many tax subsidies its federal income tax bill was only $39 million — a tax rate of 0.4 percent. And, what did it do with those profits? In 2010, the four largest oil companies spent 60 percent of their profits on dividends and stock repurchases, but only 18 percent on exploration and development. In other words, they spent 3.3 times as much on boosting their share values (e.g. profits) as they did on research and development (e.g. reducing fuel costs). No amount of advertising or lobbying can refute these
numbers.
Today, oil is trading at more than $100 per barrel and gas prices are hovering at nearly $4 a gallon. Yet, Republicans insist on subsidizing them.
I haven't even got to the Republican-Ryan Medicare proposal. You know, the one where seniors end up paying twice as much out of their own pockets, or more than $12,510 a year according to the nonpartisan CBO, raises the portion of the premium paid by beneficiaries from 25 percent to 68 percent, and shifts — not reduces — shifts $34 trillion in costs to the elderly. One observer writes, "If you replace a system that actually pays seniors' medical bills with an entirely different system, one that gives seniors vouchers that won't be enough to buy adequate insurance, you've ended Medicare. Calling the new program 'Medicare' doesn't change that fact."
Republican presidential hopeful Newt Gingrich even called the Republican-Ryan Medicare plan as "right-wing social engineering." If your own presidential hopeful doesn't like it, you have a problem.
Then you have that little problem known as job creation. Republican economist Mark Zandi estimates the plan will cut 1.7 million jobs in its first two years. But don't worry, eight years after that we'll all be swimming in health insurance company jobs because of all the cash flowing to insurance companies from seniors and their families. If your own economist doesn't like it, you have a really, really big problem.
By disinvesting in productivity and competitiveness (i.e. education, infrastructure, and science technology) and giving tax cuts to the wealthiest people and wealthiest companies, the Republican-Ryan budget and Republican-Ryan Medicare plan puts zero value on America's economic future and hardworking middle class Americans.
Frankly, none of it adds up.
Joshua Stockley is a professor of political science at ULM.