No Matter How Right-Wing Media Spin It, Millions Would Feel "Sharp Effects" Of GOP Budget
Research ››› ››› REMINGTON SHEPARD
Right-wing media have responded to criticism of Rep. Paul Ryan's GOP budget plan by trying to reframe the plan as not actually calling for spending "cuts," but that it simply limits the rate of an increase in spending. But experts agree that Ryan's plan would indeed reduce funding to programs that assist millions of low- and middle-income Americans; as the Center on Budget and Policy Priorities (CBPP) has noted, Ryan's plan includes reductions in Supplemental Nutrition Assistance Program (SNAP) funding that alone would "necessitate ending assistance for millions of low-income families."
Right-Wing Media Reframe GOP Budget: "[F]or The Most Part, We're Not Talking About 'Cuts' At All; We're Talking About The Rate Of Increase In Spending"
WSJ's McGurn Defends Ryan Plan: "[F]or The Most Part, We're Not Talking About 'Cuts' At All; We're Talking About The Rate Of Increase In Spending." In his April 30 Wall Street Journal column titled, "Paul Ryan's Cross to Bear," William McGurn defended Ryan and his budget from criticism by the "religious left," writing:
At Georgetown he delivered a spirited defense of his budget. He did so notwithstanding attacks by various Catholic bishops and a letter from 90 Georgetown professors decrying his "continuing misuse of Catholic teaching to defend a budget plan that decimates food programs for struggling families, radically weakens protections for the elderly and sick, and gives more tax breaks to the wealthiest few."
Now, even a Georgetown professor ought to understand that, for the most part, we're not talking about "cuts" at all; we're talking about the rate of increase in spending. Under Mr. Obama, the increased spending would go to 4.5% a year. Mr. Ryan's "radical" reform proposes to keep it to 3%. [The Wall Street Journal, 4/30/12]
Marc Thiessen: "Ryan's Budget Can Only Be Viewed As A 'Cut' When Compared With The Unprecedented Levels Of Spending Unleashed By President Obama." In an April 25 Washington Post op-ed, former Bush speechwriter Marc Thiessen defended Ryan's budget from criticism by prominent Catholic bishops, suggesting that Ryan's budget was increasing spending when compared to President Bush's budget projections for 2012 and 2013 and that the plan "can only be viewed as a 'cut' when compared" to spending that President Obama has proposed. From the op-ed:
To put that into perspective, Jeff Rosen, a former official in the Bush administration's Office of Management and Budget, points out the final budgets submitted by President George W. Bush projected spending of $3.22 trillion in 2012 and $3.34 trillion in 2013. Ryan's budget, by contrast, calls for spending of $3.6 trillion in 2012 and $3.53 trillion in 2013. So Ryan's budget is higher than Bush's projections for 2012 and for 2013. In fact, since actual spending in 2008 was $2.98 trillion, Ryan's budget represents a 20 percent increase in spending in 2012 -- higher than inflation from 2008 to 2012. How is that cruel and heartless?
Ryan's budget can only be viewed as a "cut" when compared with the unprecedented levels of spending unleashed by President Obama, who has increased our national debt by more than $4 trillion in just 31 months -- a new land-speed record for fiscal profligacy. In criticizing Ryan's spending "cuts," Bishop Blaire is effectively arguing that these unsustainable spending increases under Barack Obama are the new floor for what constitutes "social justice." In this view, even a 20 percent increase in spending relative to 2008 is a violation of the "moral criteria" of the Catholic Church. That is ridiculous. [The Washington Post, 4/25/12]
Rove: Ryan Budget Is Only A Cut Because "[Obama] Wants To Increase Spending To $5.8 Trillion in 2022." In an April 11 Wall Street Journal op-ed, Karl Rove claimed that the Ryan budget could only be considered a "cut" when compared to the outlays called for by Obama's budget. From the column:
Take the House GOP budget plan. It increases federal outlays from roughly $3.6 trillion this year to nearly $4.9 trillion in 2022. In the AP speech the president called this a "cut" because he wants to increase spending to $5.8 trillion in 2022.
He warned that if the GOP's "cuts ... were to be spread out evenly across the budget," then "Alzheimer's and cancer and AIDS" research would be slashed, 10 million college students denied assistance, and "thousands" of researchers and teachers "could lose their jobs." But Republicans don't cut across the board. Instead, their focus is on waste, duplication, programs that do not work, and on reform. [The Wall Street Journal, 4/11/12]
But Experts Say Ryan's Plan Would Indeed Reduce Funding To Programs That Assist Millions Of Low- And Middle-Income Americans, As Well As Children
CBPP: Ryan Budget Would Triple Pell Grant Shortfall. An April 26 Center for Budget and Policy Priorities (CBPP) report found that the Ryan budget triples the size of the projected Pell grant shortfall "even as it significantly cuts Pell benefits and eligibility." From the report:
Pell Grants are funded partly from "discretionary" money provided annually by the Appropriations Committees and partly from mandatory money -- funding provided outside the annual appropriations process. Discretionary funding supports the first $4,860 of the grant, while the remainder comes from mandatory funding. (Mandatory funding therefore currently covers $690 of the $5,550 maximum award per student.) Funding for this mandatory increment of the maximum award is open-ended, so there is no shortfall in this source of funding.
Discretionary appropriations for Pell were artificially low in 2009 through 2013 because Congress provided additional, large, but temporary pools of mandatory funding in those years to help cover the costs of the discretionary portion of the grant (the $4,860). Those pools of fixed mandatory money will mostly dry up soon, however, so Pell's discretionary funding needs will jump by $8 billion in 2014.
At the same time, the tight caps on non-defense discretionary funding (NDD) enacted as part of last year's Budget Control Act will constrain overall NDD funding -- the part of the budget that includes the discretionary portion of Pell Grants -- over each of the next nine years. There would be little or no problem meeting Pell's funding needs within the NDD caps if the discretionary funding level for Pell grants in 2012 merely rose over the next decade at the same rate as the NDD caps (virtually the same as expected inflation) if it weren't for the $8 billion increase needed for Pell Grants in 2014, which must then be maintained in subsequent years. But because of that needed increase, CBO estimates indicate that Pell's discretionary funding needs through 2022 are about $58 billion higher than the levels that would be provided if the 2012 Pell funding level simply rose modestly in tandem with the NDD caps.
[The Ryan budget] actually exacerbates the shortfall.
- The Ryan budget would both cut Pell benefits and eligibility and freeze the maximum grant at $5,550 per student per year, apparently on a permanent basis. Together, these changes would reduce the program's funding needs by roughly $50 billion over ten years, by making fewer lower-income students eligible for the grants and reducing the size of the grants for students who still can receive them.
- It would repeal the entire $101 billion in existing mandatory funding for Pell over the next ten years -- both the permanent, open-ended funding and the temporary pools of fixed funding.
In other words, the Ryan budget would increase the $58 billion Pell shortfall by $101 billion (by repealing all mandatory funding), while reducing Pell funding needs by approximately $50 billion (by cutting eligibility and benefits). That leaves a shortfall of $109 billion, all else being equal.
All else is not equal, however. The Ryan budget would cut overall NDD funding below the current caps by the stunning amount of almost $1.2 trillion over ten years. This represents an 8 percent cut in 2013 below the already tight NDD caps and a 22 percent cut in each subsequent year.
The Ryan budget does not explain which general areas (much less which programs) would absorb what share of these deep additional cuts, so we can't know exactly how much of these cuts would come from Pell Grants. But it is extremely unlikely that Pell Grants would not be cut significantly, along with other major NDD programs, given the magnitude of the $1.2 trillion funding reduction.
We can roughly estimate the effect on Pell Grants using the same method that we used to calculate the existing $58 billion Pell shortfall -- that is, by comparing the percentage increase or reduction in the NDD caps each year, if they are set at the levels the Ryan budget calls for, with CBO's estimate of the growth in Pell Grant funding needed under current law. We find that the Ryan plan's reductions in the NDD caps would expand the Pell shortfall by an additional $52 billion -- leaving the Ryan budget with a total Pell shortfall of $161 billion. [CBPP, 4/28/12]
CBPP: "Ryan Budget Would Slash SNAP Funding By $134 Billion Over Ten Years ... Which Would Necessitate Ending Assistance For Millions Of Low-Income Families." An April 18 CBPP report found that the Ryan budget plan would severely cut the Supplemental Nutrition Assistance Program (SNAP) by "$133.5 billion -- more than 17 percent -- over the next ten years," cuts that would negatively affect "low-income families with children, seniors and people with disabilities." From the report:
The Ryan budget documents assert that Congress could achieve the required savings by capping federal funding for SNAP and "freeing states to come up with innovative approaches to delivering aid to those who truly need it," through a block grant. That description leaves the mistaken impression that the program is not serving a population that is overwhelmingly poor and that savings could be achieved without causing significant harm to millions of vulnerable Americans.
Unlike most means-tested benefit programs, which are restricted to particular categories of low-income individuals, SNAP is broadly available to almost all households with very low incomes. As a result, cutting SNAP would affect broad swaths of the low-income population. Currently, 46.5 million people receive SNAP assistance to help them buy food for their families. Census data show that in 2010 (the latest year for which these data are available), 46.2 million Americans lived below the poverty line, and 63 million lived below 130 percent of the poverty line, SNAP's gross income limit.
- The overwhelming majority of SNAP households are families with children, seniors, or people with disabilities. Almost three-quarters of SNAP participants are in families with children; more than one-quarter are in households that include senior citizens or people with disabilities.
- SNAP households have very low incomes. Eighty-five percent of SNAP households have incomes below the poverty line (about $23,050 for a family of four in 2012). Such households receive 93 percent of SNAP benefits. Two of every five SNAP households have incomes below half of the poverty line. (See Figure 3.) Such individuals and families have little flexibility in their monthly budgets to cope with deep reductions in food assistance.
- Low-wage workers rely on SNAP to boost their monthly income. Millions of Americans live in households whose earnings are not sufficient to meet basic needs. In 2010, some 37 million people (1 in 8 Americans) worked or lived in a working family with cash income below 130 percent of the poverty line (about $29,000 for a family of four). Low incomes like these -- which typically reflect low wages or limited work hours -- can leave families unable to afford necessities like food and housing on a reliable basis. SNAP benefits play a crucial role in boosting families' monthly income: a typical working mother with two children on SNAP earns $1,146 per month ($13,762 on an annual basis) and receives $375 per month in SNAP benefits. If the Ryan proposal were implemented via across-the-board cuts, this family's monthly benefits would be cut by $67 per month -- or 17 percent -- in fiscal year 2016. [CBPP, 4/18/12]
Krugman: Ryan Budget "Slashes Taxes For Corporations And The Rich While Drastically Cutting Food And Medical Aid To The Needy." In his April 1 New York Times column, Nobel Prize-winning economist Paul Krugman wrote:
[O]n Thursday Republicans in the House of Representatives passed what was surely the most fraudulent budget in American history.
When I say fraudulent, I mean just that. The trouble with the budget devised by Paul Ryan, the chairman of the House Budget Committee, isn't just its almost inconceivably cruel priorities, the way it slashes taxes for corporations and the rich while drastically cutting food and medical aid to the needy. Even aside from all that, the Ryan budget purports to reduce the deficit -- but the alleged deficit reduction depends on the completely unsupported assertion that trillions of dollars in revenue can be found by closing tax loopholes.[The New York Times, 4/1/12]
NEA: Ryan Budget Would Force About 200,000 Children Out Of Head Start Program In 2014. As The Huffington Post reported, the National Education Association (NEA) found that the projected cuts in the Ryan budget would force about 200,000 children out of Head Start in 2014, and affect more than 2 million children over the next decade:
The plan, proposed by Rep. Paul Ryan (R-Wis.), who chairs the House Budget Committee, would eliminate slots for about 200,000 children in 2014, according to an analysis by the National Education Association. Over the next decade, the NEA estimates, more than two million children would lose opportunities to attend Head Start centers as a result of the cuts.
As it stands, only 30 percent of eligible children participate in the program, but children's advocates tend to argue that the program should be expanded, not diminished. [The Huffington Post, 3/29/12; NEA.org, 3/26/12]
CBPP: Ryan Gets 62 Percent Of His Budget Cuts From Programs For Lower-Income Americans. In a March 23 report, CBPP found:
House Budget Committee Chairman Paul Ryan's budget plan would get at least 62 percent of its $5.3 trillion in nondefense budget cuts over ten years (relative to a continuation of current policies) from programs that serve people of limited means.
Chairman Ryan's budget proposes $5.3 trillion in nondefense budget cuts (and about $200 billion in defense increases). The $5.3 trillion in cuts includes $1.2 trillion in cuts to nondefense discretionary programs; this $1.2 trillion in cuts is beyond the cuts needed to comply with the strict funding caps that the Budget Control Act established. Several hundred billion dollars of these additional cuts would very likely come from low-income programs.
Total cuts in low-income programs (including cuts in both discretionary and entitlement programs) appear likely to account for at least $3.3 trillion -- or 62 percent -- of Chairman Ryan's total budget cuts, and probably significantly more than that; as explained below, our assumptions regarding the size of the low-income cuts are conservative.
CBPP illustrated its findings with this graph:
CAP: Ryan Budget Would "Strip More Than $871 Billion From Public Investments In Education, Infrastructure, And Science And Technology." A Center for American Progress (CAP) report compared Ryan's projected outlays to 2010 outlays for education, infrastructure, and technology, concluding:
This year's proposed House budget walks back from the $1.4 trillion investment cuts Rep. Ryan proposed in 2011 but still cuts deep enough to damage our economy now and in the long run. Economists assess prospects for economic growth by looking at how investment per capita grows over time--the more capital goods, skills, and knowledge people have to work with, the more productive and creative they can be. At a minimum, investment should keep pace with population growth and inflation, and replace depreciated past investments as they get worn out and used up through normal use.
But compared to 2010 levels--before conservative cuts began to bite into public investments--Rep. Ryan's plan disinvests in America by cutting:
- Education and training investment per capita by 48 percent
- Transportation infrastructure investment per capita by 28 percent
- Science and technology R&D investment per capita by 24 percent
In total, the Ryan budget proposal would strip more than $871 billion from public investments in education, infrastructure, and science and technology--investments that create a foundation to support private investments and a more productive economy with greater opportunities and broader prosperity. The key to our long-term success and the competitiveness of our economy is to boost public and private investment from the low levels of the past decade. By disinvesting in the sources of productivity and competitiveness to pay for tax cuts for the already wealthy, the Ryan budget plan puts little value on America's economic future. [CAP, 3/20/12]
Economic Policy Institute: Ryan Budget Would Slow Down Job Creation
EPI: "Paul Ryan's Latest Budget Doesn't Just Fail To Address Job Creation, It Aggressively Slows Job Growth." The Economic Policy Institute (EPI) explained in a March 21 blog post:
Paul Ryan's latest budget doesn't just fail to address job creation, it aggressively slows job growth. Against a current policy baseline, the budget cuts discretionary programs by about $120 billion over the next two years and mandatory programs by $284 billion, sucking demand out of the economy when it most needs it and leading to job loss. Using a standard macroeconomic model that is consistent with that used by private- and public-sector forecasters, the shock to aggregate demand from near-term spending cuts would result in roughly 1.3 million jobs lost in 2013 and 2.8 million jobs lost in 2014, or 4.1 million jobs through 2014. [EPI, 3/21/12, emphasis original]