The Inscrutable Center Keeps Moving Rightward (Continued)

In my last post "The Inscrutable Center Keeps Moving Rightward" I concluded with: “Next time I will focus on the so-called Ryan budget, which isn’t really a budget, and discuss how the so called Middle, in the face of this Rightward drift, or is it a Rightward dash, makes excuses and drifts further and further right in an effort to stay in the new Middle."

So first the Ryan budget: Most of the publicity has been given to what the Ryan outline for a budget (his plan) would do to Medicare, but the media has given the impression that it would leave Social Security alone, save for raising the retirement age. That would be nice, but it isn’t so. First Ryan and many of his allies want us to believe that there is no trust fund, that all the money we have paid and are paying in Social Security payroll taxes have already been stolen; that they are no more than an additional tax for the general treasury. That just because the money has been invested in Treasury IOUs backed by the full faith and credit of the US, that it is not a debt that has to be honored. See Charles Krauthammer’s delusional rationality for this here and all the other Right Wing blogs that you can find by Googling “Social Security lockbox.”

But the lockbox exists (it is usually referred to as the trust fund) and will continue to exist, unless and until Ryan, (and Romney who has endorsed the Ryan plan) and their friends manage to get legislation through Congress that would indeed steal it. The only non-partisan source for this information is the Social Security Administration, who on their website explain the trust fund, how it is invested and how long it will last. In a PDF document which you can find here (highlighted at page three) the Social Securities Administration sets forth that the trust fund will be adequate for full payments till 2027, but the Disability insurance fund would have to reduce payments as early as four years from now. (Social Security by the way is not just for seniors.)

I have been urging some adjustments now because 2027 is not that far away, and the sooner we act the smaller the adjustments that would have to be made, and we need to assure the young that the Social Security taxes they are paying will not be stolen from them in a system that will not exist when they come of age.

However, according to the Ryan/Romney plan there is no trust fund, meaning they plan to divert it toward wiping out the deficit, rather than reducing the deficit with other cuts, (there are many that are in fact desirable) or (God forbid) taxes on the well off. According to the Huffington Post, Ryan/Romney creates an unprecedented new fast-track procedure to ram through Social Security benefit cuts. To quote from the Post’s article:

                       

Under Ryan's plan, any year Social Security is not in 75-year balance, the president and Congress would have to legislate changes that bring it to solvency through an "expedited process."            

In effect, Ryan would free up Social Security for fast-track cuts by turning it into a regular line budget item. Since Social Security is not part of the general budget, has its own revenue stream, and is forbidden by law from borrowing, it has always been dealt with separately from the rest of the budget. In fact, Ryan had to create a new fast-track process to trigger cuts for Social Security alone, because by law, it is excluded from fast-track reconciliation procedures for the general budget.  

Further, projections of Social Security's solvency change every year, which means that Ryan's plan could force big changes to Social Security based on very short-term variations in the program's finances.

The Ryan “budget”, as endorsed by Romney, then takes the Bowles-Simpson Plan, (there really is no such plan, since the necessary votes for a plan to be put forth were not forthcoming) - and which has not been given support by any member of Congress, and cherry-picks it. He proposes to enact the cuts in the plan, without enacting the revenue enhancements, and he goes far beyond the Bowels-Simpson plans proposals. In fact, by the time he is through Bowels-Simpson is no longer recognizable.

The proposals of the Bowels-Simpson plan have never been fully vetted, but the Ryan plan simply cherry picks them, and proposes benefit cuts over and above the savings that would result from raising the retirement age to 69, which I support as necessary. Incredibly, according to the Huffington Post it cuts benefits for 60% of "Very Low" earners, those with average annual earnings of $10,771 (for graph illustrations see here), reduces benefits for all by changing the cost of living formula, which would take a bigger and bigger bite out of the small benefit now given by Social Security each year, even as fewer and fewer retirees have the benefit of an employers pension, and erodes the link between earnings and benefits.

As for the Ryan/Romney plan on Medicare, which has gotten far more publicity, it would simple do away with the program and substitute for it a voucher system that would do no more than provide a small subsidy toward buying private insurance.

To put it simply and bluntly, the proposals in the Ryan plan are as far Right as could be imagined on the benefit side, and on the revenue side propose a drastic cut in tax rates, which is set forth in detail, and which are supposed to be made up by reductions in unspecified tax expenditures. Why unspecified? I suggest because they are like the bird in the bush. They are not serious, yet the media and the pundits evaluate this proposed “budget” as though the unspecified cuts in tax expenditures were real.

So one would think that the so-called Middle would denounce this document as a fraud and as a Trojan horse for the most Right Wing destruction of our safety net and our most basic regulatory system for the safety of our air, water, pharmaceuticals, etc. But what have they been saying?

Well, let us look at James B. Stewart writing in the New York Times with the title “…Ryan Plan, It’s a Place to Start.” Can anybody who fully and fairly analyses the Ryan/Romney plan truly argue that it is a place to start. Has Mr. Stewart bothered to read the proposals rather than its propagandistic claims? 

In endorsing it he quotes this claim:

The plan stands on two pillars: tax reform and reducing the long-term deficit by reining in entitlement spending… it contends that “the social safety net is failing society’s most vulnerable citizens” and is “poised to unravel in the event of a spending-driven debt crisis”. The tax code, it goes on, “has become a broken maze of complexity and political favoritism; it is overgrown with special-interest loopholes and characterized by high rates, both of which stifle economic growth and job creation.”

And then goes on to say:

“Does anyone, Democrat or Republican, seriously disagree?

Well, No! But what has that to do with the actual proposals in the Ryan plan as outlined above. Mr. Stewart goes on to say that Ryan is a nice guy and if the plan is bad, it is because he has no choice given the stand of his colleagues. So because Ryan is a nice guy, (whatever that means) we should embrace an outrageous plan on the assumption that he doesn’t really mean it. Duh!

Mr. Stewart goes on to say: “The question is what would happen to the big break that the wealthy now get — the lower rate on capital gains.” Yes, that is indeed the question! What is there that makes this “plan” (more accurate than “budget”) appealing, if so basic a question is not answered. All Mr. Stewart can offer is that the Club for Growth has criticized it –so it must have merit.

Fortunately an article that appeared on the website of the Center for Policy Research exposes the Stewart article for what it is. In a short article it demolishes the Stewart contentions and concludes rightly:

We have people who want to be part of the inside Washington conversation who praise the budget's courage and integrity. Then we have people who believe in arithmetic who call it what it is: a piece of trash. By the way, Paul Ryan is a very nice guy.

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