Tuesday, April 5, 2011

GOP Unveils 2012 Budget Proposal

Budget Committee Chairman Paul Ryan unveiled the Republican Party’s long awaited budget proposal for 2012.  To say the bill contains several radical and controversial changes in the way Washington conducts its business would be an understatement.  But the bill is the first detailed, quantitative outline of the party’s agenda in recent memory.  While we disagree with many aspects of this proposal we applaud the Republican’s courage in unveiling their agenda while knowingly subjecting their ideas to certain demagoguery by their Democratic opponents.
Here is a brief overview of the proposal. 
Mr. Ryan informs us that the Republican budget proposal will cut federal spending by almost $6 trillion over the next decade.  It will repeal the President’s Affordable Health Care Plan in its entirety.  It will also cut funding in education, infrastructure and many social programs.  It offers some cuts in defense and proposes changes in the tax code; most notably reducing the corporate tax rate from 35% to 25%.  The proposal does not touch Social Security.
The biggest overhaul comes in the areas of Medicare and Medicaid. 
The Republicans propose to change Medicare to a voucher system whereby individuals would receive a fixed amount of money that they would use to purchase health care from a broad range of regulated private insurance plans.  The eligibility age would be raised from the current age of 65 to age 67 in 2033.
The Republican plan would turn Medicaid over to the states.  States would receive money in the form of a block grant which would allow states to design and implement Medicaid benefits according to local needs.
Time does not allow us to address all of our problems with this proposal; though there are many.  But let us just offer a few points on the major areas: Medicare and Medicaid and taxes.
The Republican Plan does not reduce the cost of Medicare it simply shifts the burden from the federal government to the individual.  If successful in repealing the President’s health care plan it will once again allow insurance companies to use pre-existing conditions as a reason to cancel a person’s coverage or decline to provide them coverage.  As people get older they get sicker and they are apt to use their health care coverage more often.  So imagine a 65 year old with 64 years of pre-existing conditions attempting to purchase health insurance.  Imagine a 70 year old person or if lucky a 90 year old person.  The insurance premium would be astronomical…that is IF they can find a company willing to write the coverage.  There are no guarantees that the coverage will be available or affordable.  And if they are able to purchase coverage but they exceed the benefits provided by their policy; they are responsible for any additional costs incurred.
The Medicaid proposal offers a different problem.  Like the Medicare proposal, the Medicaid proposal does not reduce the cost of Medicaid it simply shifts the burden away from the federal government.  But this time the burden falls to the states. The proposal says that the government will provide a lump sum of money to the states to do with as they please in the form of a block grant.  The key words here are “do with as they please”.  The proposal does not offer any specifics as to how those payments would be doled out.  It leaves open the possibility that a Republican governor and his state might be favored by a Republican administration over a state run by a Democratic governor.  Such favoritism might then extend down to the county, city and township levels as well.  There are no guarantees as to the equity with which these funds would be distributed.
Finally let’s examine the tax aspects of the plan.  Since Republicans are asking the poor and the middle class to accept drastic cuts in education, social programs and entitlements that are essential to their lives; one would expect that the wealthiest would be asked to contribute as well.  Not so.  In addition to continuing the Bush tax cuts for the rich the plan proposes to cut the corporate tax rate from 35% to 25%.  So once again the poor and the middle class are asked to bear the burden of a skyrocketing deficit while the rich and the major corporations are offered tax reductions and rebates.
Now come the Democrats led by the President.  Will the President demagogue the issue or will he sit back and let his congressional party members do it for him?  Or will he take the high road and acknowledge the Republican’s proposal for what it is…a legitimate expression of their beliefs and a starting point for healthy debate.  Politics says he does the former; leadership dictates that he does the latter.
 If he takes the high road we have change we can believe in.  If he demagogues then it is same old, same old.   


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