Features » May 15, 2012
The GOP’s Dead-End Path to Prosperity
President Barack Obama should expose Mitt Romney’s ‘marvelous’ budget baggage.
Ryan and Romney say they want to reduce the deficit, but keep all the Bush tax cuts, eliminate almost all discretionary spending except for the military and cut the top tax rate to 25 percent.
Mitt Romney may rue the day he called Wisconsin Rep. Paul Ryan’s budget proposal “marvelous,” as if he were describing a splendid buffet at the mansion of a friend. The plan from the influential, youthful Republican chair of the House budget committee does offer people like Mitt and his rich buddies tasty goodies – $10 trillion in preserved and fresh millionaire-friendly tax cuts (over a decade), to be followed later with rollbacks in financial, environmental and every other regulation.
But if President Obama is politically vulnerable on the weak recovery of the economy, Romney will be increasingly vulnerable in the presidential race for embracing Ryan’s plan – if the Democrats make clear the dangers it poses for the vast majority of Americans, the servants at Romney’s “marvelous” policy buffet. Declaring the presidential race starkly as a “make-or-break moment for the middle class,” Obama told Associated Press editors in April that in the much-different budgets he and Ryan have proposed, voters face a “choice between competing visions of our future [that] has [not in recent memory] been so unambiguously clear.”
The Ryan-Romney plan is further to the Right – and more hurtful to average Americans – than anything from Ronald Reagan or Newt Gingrich’s Contract with America, Obama said. Calling it “thinly veiled social Darwinism,” he argued that his “centrist” approach has historically drawn support even from Republicans, from Lincoln to Eisenhower, who saw government as a way to “do together what we cannot do as well for ourselves.”
Few Americans may know what social Darwinism means, though many – especially the rich – do believe superior people naturally dominate society through harsh competition. (On the other hand, we can hope the anti-evolution religious Right will stay home in November rather than vote for Romney, a disciple of Darwin – even if 19th-century English philosopher Herbert Spencer was the real social Darwinist.)
But polls generally show large majorities supporting Medicare, which the Ryan budget would drastically weaken, and a wide range of government activities, such as operating national parks or protecting the environment, which the budget undermines. And they favor higher taxes on the rich, not new tax cuts for them.
Two major pitfalls endanger Obama’s attempt to capture the center and label Romney the right-wing extremist: He offers voters a plan tilted more to a limited defense of existing government programs than to bold, inspiring initiatives on the economy. (He should adopt more of the House Progressive Caucus budget or even Sen. Tom Harkin’s more limited Rebuild America Act.) And he fails to challenge Romney sharply enough on a general vision of what government can offer, preferring instead to burnish his credentials on shrinking government’s size and reach.
But even if adopting Ryan’s plan may hurt him with centrists and independents, could Romney have resisted? With only four House Republicans voting against Ryan’s budget and no Democrats for it in late March, he had to prove not only his right-wing credentials but also – what now amounts to the same thing – his mainstream party loyalty. After all, as anti-tax, anti-government zealot Grover Norquist told The Economist, Romney’s own ideas are almost irrelevant: “We want the Ryan budget. We … just need a president to sign this stuff.”
The path to austerity
The Ryan budget will not only fail to do what it claims, but in most cases will do just the opposite. As New York Times columnist Paul Krugman put it, the budget is “the most fraudulent in American history.”
Ryan (and Romney) say they want, above all, to reduce the deficit, but they keep all the Bush tax cuts, slash the budget to eliminate almost all discretionary spending except for the military and cut the top tax rate to 25 percent (now 35 percent, scheduled to rise to 39.6 percent). They promise to pay for the lower rate by eliminating tax loopholes or expenditures, but fail to specify any – thus effectively increasing budget deficits, according to the Congressional Budget Office.
Under the guise of cutting deficits and protecting health and retirement security, Ryan-Romney would change federal health insurance to reduce federal costs but only by shifting the burden back to individuals – especially the aged and poor – not by increasing efficiency. The budget would raise the eligibility age for Medicare in the future and replace Medicare with vouchers, turn over Medicaid to the states with inadequate, declining block grants, and invalidate most of the Affordable Care Act, including its expansion of Medicaid. As a result, as many as 27 million people would lose Medicaid coverage (according to the Urban Institute), and 33 million uninsured will not gain insurance promised through the Affordable Care Act. Also, although the recently passed House budget only steers Congress toward changing Social Security, Ryan clearly envisions at least partial privatization and a higher retirement age – increasing both economic insecurity and inequality.
Ryan and Romney claim the tax cuts focused on corporations and the rich – sorry, “job creators” – will boost employment, but comparing the economic records of the Clinton and Bush II administrations suggests that raising taxes on the rich can sometimes yield more jobs than cutting them. After reviewing a wide range of studies, Center on Budget and Policy Priorities (CBPP) tax analyst Chye-Ching Huang concludes, “There is no strong evidence taxes on high incomes affect growth strongly negatively or positively.”
‘Robin Hood in reverse’
With their budget and governmental revamp, Romney promises Americans freedom and Ryan predicts a new morality. (The budget is called “The Path to Prosperity: Restoring America’s Promise.”) But for most Americans their plan would mean greater inequality, which leads to less freedom and a more amoral social order.
“[T]his budget is Robin Hood in reverse,” CBPP President Robert Greenstein says. “It would likely produce the largest redistribution of income from the bottom to the top in modern U.S. history and likely increase poverty and inequality more than any other budget … possibly in the nation’s history.”
Already, the rich – and virtually the rich alone – are rebounding from the Great Recession, with the top 1 percent capturing 93 percent of the income gains in the first year of recovery, according to economist Emmanuel Saez of the University of California, Berkeley. But under Ryan’s plan, according to the Tax Policy Center, a centrist think tank, the average millionaire would get a new $265,000 tax cut (on top of $129,000 from extended Bush cuts), while after-tax income would fall for households earning $30,000 a year or less (and at the same time, 62 percent of all Ryan’s cuts come from programs benefiting lower-income households). Lowering incomes, removing insurance, increasing individual burdens and boosting insecurity does not provide most Americans more freedom, but imprisons them in economic anxiety.
Greater inequality also increases illness and mortality, reduces social and economic mobility, lowers long-term economic growth, undermines democracy and contributes to higher crime rates. And recently a team of researchers, mainly from the University of California, Berkeley, found through seven different studies that upper-class individuals are more likely to behave unethically – lying, stealing, cheating – than the less affluent. Such behavior may be a major contributor to their wealth, but it also demonstrates that once they are wealthy, people are much less moral, and much more powerful. It’s a message apparently lost on right-wing Christians.
But it may not be lost on all Americans. Even Ryan faces a strong political challenge from former businessman and Democratic politician Rob Zerban in a once-Democratic district. And Romney now carries the baggage of a plan that does precisely the opposite of what he claims into a campaign against a president who seems willing to take that message to the electorate all year long.
David Moberg, a senior editor of In These Times, has been on the staff of the magazine since it began publishing in 1976. Before joining In These Times, he completed his work for a Ph.D. in anthropology at the University of Chicago and worked for Newsweek. He has received fellowships from the John D. and Catherine T. MacArthur Foundation and the Nation Institute for research on the new global economy. He can be reached at email@example.com.
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