Fox Touts Paul Ryan's New Budget Plan, Ignores Economists' Claims Of Negative Impact

Fox News' Sean Hannity lauded Republican Rep. Paul Ryan's latest budget, a proposal that has been criticized by economists for its potential destructive impact on the economy, employment, and poverty.

Fox's Hannity Praises Ryan Budget

Fox's Hannity Discusses His Favorite Aspects of Ryan's Budget. During the April 1 edition of his Fox News show, Sean Hannity used an interview with Sen. Marc Rubio (R-FL) in order to declare his support of Ryan's newly released GOP budget plan,focusing on the aspects of the plan he liked best:

HANNITY: Paul Ryan put up his own bullet points on his own website here, and we'll put it up for our audience, and in it he says it balances the budget in 10 years, pays down the debt, grows the economy. There's certain things that I looked in here that I liked as well. Not only grows the economy, but when you get to some of the specifics, I like the fact it would reform the tax code. There would be two categories, 10 and 25 percent. No alternative minimum tax -- that would be erased. Corporate tax would go from 36 to 25 percent. Repeal Obamacare, repeal the bailout of banks and Dodd-Frank. No green energy subsidies, no corporate welfare, and it would open energy exploration for the entire country. [Fox News, Hannity, 4/1/14]

Ryan's Budget Harshly Criticized For Impact On Economy, Poverty

CBPP: Ryan Budget Would Create “More Poverty And Less Opportunity.” Robert Greenstein, the president of the Center on Budget and Policy Priorities, noted that under the Ryan budget, “Affluent Americans would do quite well. But for tens of millions of others, the Ryan plan is a path to more adversity.” Greenstein pointed out that the plan would leave millions without health insurance through repeals to the ACA's coverage provisions and changes to Medicaid funding. Greenstein also criticized the budget for its impact on anti-poverty programs, estimating that it would:

  • Slash basic food aid provided by SNAP by at least $135 billion and convert the program to a block grant. The Ryan budget includes every major benefit cut in the harsh SNAP bill that the House passed in September, which CBO estimated would end benefits to 3.8 million low-income people in 2014.  The budget also would block-grant SNAP in 2019, with further steep funding cuts. States would be left to decide whose benefits to cut -- poor children, working-poor parents, seniors, people with disabilities, or others struggling to make ends meet.  They would have no good choices, as SNAP provides an average of only $1.40 per person per meal.
  • Make it harder for low-income students to attend college. Ryan proposes to cut Pell Grants by more than $125 billion over the next decade.  He would freeze the maximum grant for ten years, even as college tuition costs continue to rise. The maximum Pell Grant already covers less than a third of college costs, compared to more than half in earlier decades. Yet under the Ryan budget, the grant would fall another 24 percent by 2024 in inflation-adjusted dollars. (Some of that reduction is in the budget baseline, but Ryan would substantially enlarge it.) He also would make some moderate-income students who get modest help from Pell Grants today entirely ineligible.
  • Make massive unspecified cuts in a part of the budget in which low-income programs -- including the Earned Income Tax Credit (EITC), which Ryan praised in his recent poverty report -- make up a substantial share of the expenditures.  His budget calls for at least $500 billion in cuts to mandatory programs other than Social Security, Medicare, Medicaid, SNAP, Pell Grants, farm programs, civil service programs, and veterans' benefits.  A substantial share of spending in this category is for low-income programs, including the EITC, the low-income component of the Child Tax Credit, the school lunch and other child nutrition programs, and Supplemental Security Income, which helps very poor people who are elderly or have serious disabilities. [Center on Budget and Policy Priorities, 4/1/14]

EPI: “Ryan Budget Would Slow Recovery, Cost Jobs.” In a post on the Economic Policy Institute's Working Economics blog, Joshua Smith estimated that because of drastic spending cuts in Ryan's budget, the plan would reduce economic growth and employment (emphasis in original):

Five years after the end of the Great Recession, our economic recovery is plodding, not because of massive deficits (which are not currently massive -- they have fallen faster than at any point in the last 60 years), but due to a lack of aggregate demand. In a demand-starved economy like ours, public spending has a high multiplier effect, meaning that for each dollar the government spends, more than a dollar is added to the economy. This is especially true when that public spending is allocated in such a way that it can circulate quickly throughout the economy -- for example, through low-income support programs (which are automatic stabilizers) or infrastructure investments that would create jobs rapidly.

For that reason, pulling back spending in today's economic environment, as Chairman Ryan proposes, would have a deleterious effect on the economy and jobs. On net, I estimate that the House budget resolution would decrease GDP by 0.9 percent and decrease nonfarm payrolls by 1.1 million jobs in fiscal year 2015, relative to CBO's current-law baseline. The following fiscal year, when Ryan's cuts to discretionary spending kick in, “The Path to Prosperity” would decrease GDP by 2.5 percent and cost 3.0 million jobs. And if the recovery remains sluggish, large job losses could continue under the Ryan budget in 2017 and beyond. [EPI, 4/1/14]

Jared Bernstein: Ryan Budget “Perversely Asks For Sacrifices Only From Those Least Able To Bear It.” In Politico, CBPP senior fellow Jared Bernstein criticized Ryan's budget for “Orwellian budget language” and pointed out that it “perversely asks for sacrifices only from those least able to bear it while providing large cuts in tax rates for those with ample resources.” Bernstein went on to criticize the budget's austerity measures:

Ryan calls his budget a Path to Prosperity, but it's really a path to austerity. I happen to disagree with that policy choice, as do many other economists, but it's a choice many other governments have made. In fact, based on Ryan's fiscal philosophy, we've already generated significant public savings over the past few years; Congress has legislated about $4 trillion in deficit savings compared with 2010 projections, with 77 percent of those savings from spending cuts.

And what have the results been? Weaker growth of output, jobs and wages at a time when the economy was still reeling from the Great Depression. Austerity has kept unemployment in the United States relatively high -- it's now at 6.7 percent. Even deeper austerity measures in Europe have contributed to unemployment of about 12 percent. So no, I don't think these ideas work at all, either in the near term or the long term. [Politico, 4/1/14]

Center for American Progress: “Ryan Budget Is A Broken Record Of Failed Economics.” The Center for American Progress called Ryan's plan “the same conservative, top-down policies that have failed the nation's middle- and working-class families, seniors, and the economy.” The report noted that Ryan's budget includes drastic changes to Medicare and programs like Pell grants, food stamps, and Medicaid and criticized the budget for pushing further austerity measures:

Austerity has already made our economic problems worse, but the latest House Republican budget ignores that failure and doubles down on this discredited approach. Instead of investing in sectors such as infrastructure, science, and education, the House Republican budget calls for enormous cuts to these critical middle-class investments. Those cuts are on top of the enormous cuts Congress has already made and would go beyond even the economically destructive levels imposed by sequestration. These crucial investments are already projected to fall to historically low levels under current law, but Rep. Ryan targets them for huge cuts anyway. This yields short-term deficit reduction that looks good on a few of Rep. Ryan's charts but sacrifices our nation's economic future. [Center for American Progress, 4/1/14]

NY Times: Ryan Budget Would Be “Destructive To The Country's Future.” An April 1 New York Times editorial criticized Ryan's budget for changes to Medicare and cuts to nondefense discretionary spending, calling Ryan “a man with very dangerous ideas”:

The Republican budget for 2015, released Tuesday by Representative Paul Ryan, the chairman of the House Budget Committee, will never come close to being law, so it doesn't have to pretend to be serious. This is a document designed solely to be reduced to a few bullet points so House Republicans can have something to show their most antigovernment voters.

That might work in their most carefully gerrymandered districts, but does the Republican Party really want to coalesce around a budget this destructive to the country's future: harming the middle class and the poor; undercutting popular safety-net programs, including Medicare and Pell grants; and heaping tax benefits on the rich? Apparently it does, and the full House will probably support it in a few days. Voters should look closely at the details to see if they would choose the same course.


Mr. Ryan hopes to be promoted to the helm of the Ways and Means Committee now that its chairman, Dave Camp, has announced his retirement. That would put a man with very dangerous ideas in a position to do serious damage to the tax code and the safety net, which Ways and Means controls. His budget is mostly an exercise in grandstanding right now, but, in a short time, it could become a pathway to something far worse. [The New York Times, 4/1/14]