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Economy

The Most Radical Proposals In The House Conservative Budget

As Congress struggles to find a compromise between the House Republicans’ and the Senate Democrats’ budget proposals this week, the House conservatives have jumped into the fray with their own budget proposal. The Republican Study Committee (RSC), helmed by Chairman Rep. Steve Scalise (R-LA) released an even more radical plan than the official House Republican budget, which disproportionately guts programs for low-income Americans while giving even bigger tax cuts to the wealthiest Americans. The RSC budget purports to eliminate the deficit in just 4 years and limit total discretionary spending to $950 billion, the lowest level since 2008. In order to achieve this goal, the RSC cuts non-defense spending by $6 billion over four years, while the GOP budget slows spending growth over the same period.

Here are 5 of the most extreme proposals in the budget from the RSC, of which roughly two-thirds of Republicans in Congress are members:

1. Raise the retirement age to 70. The RSC budget would delay eligibility for Medicare and Social Security benefits to age 70, while calculating cost-of-living adjustments using chained CPI, which cuts benefits by $1300 a year for each recipient. Raising the eligibility age for Medicare would force seniors to pay $11.4 billion in extra costs.

2. Reinstate Bush tax cuts. Bush-era tax cuts for the wealthiest Americans have greatly exacerbated income inequality while doing little for economic growth. As such, President Obama allowed the tax cuts for people making over $450,000 a year to expire at the end of 2012. The RSC would reintroduce those tax cuts, eliminating $823 billion in revenue and adding $950 billion back into the deficit over ten years.

3. Freeze all spending for four years. In order to meet the fantastical goal of eliminating the deficit in four years, the RSC budget would cap all discretionary spending to $950 billion, allegedly close to 2008 spending levels but actually around $100 billion less when adjusted for inflation. It would then freeze all discretionary spending at that level until 2017, when the budget would supposedly be balanced.

4. Eliminates the National Labor Relations Board, the National Endowment for the Arts, and Public Broadcasting. The RSC budget entirely does away with the NLRB, which oversees labor practices, the Corporation for Public Broadcasting, which the budget states is a “government-supported media outlet” against the principles of “a free society,” and the National Endowment for the Arts, which is “an inappropriate function of the federal government and is nowhere justified in the Constitution.”

5. Repeal Obamacare. The House has wasted more than 30 votes trying to repeal the Affordable Care Act, undeterred by public opinion or a Supreme Court decision. Still, the RSC budget would repeal Obamacare, kicking more than 30 million Americans off their insurance and once again allowing insurance companies to discriminate against people with pre-existing conditions.

INFOGRAPHIC: House Republicans, Senate Democrats Offer Competing Visions For The Federal Budget

Last year, Rep. Paul Ryan (R-WI) and his radical House budget rode a wave of conservative popularity all the way to a spot on the Republican Party’s presidential ticket. Six months and one resounding electoral defeat later, Ryan’s popularity has collapsed and even his Republican allies are disavowing his ‘cut first, ask questions later’ approach to the federal budget. And yet for the third straight year, Ryan has put forth a plan that would gut Medicare for future beneficiaries, reduce spending on programs that primarily benefit low-income women and children, protect tax loopholes for oil companies and Wall Street banks, and lower taxes on millionaires and billionaires.

Last week, Democrats unveiled a budget proposal of their own, one that stands in stark contrast to the plan put forth by House Republicans. Here’s a quick look at the key differences between Sen. Patty Murray’s (D-WA) proposal and Ryan’s:

Education

Sequestration Drives Up Fees On Federal Student Loans

Recipients of some federal student loans will have to pay increased fees on the loans because of the automatic budget cuts, known as sequestration, that took effect at the beginning of March. The Department of Education has sent letters to recipients of Direct PLUS loans, which go to graduate students and parents of dependent undergraduates, alerting them to a small increase in the fees associated with the loan.

According to the letter, rates will increase by a little more than 0.2 percentage points, Fox News reports:

“On August 2, 2011, Congress passed the Budget Control Act of 2011, which put into place automatic federal budget cuts, known as the ‘sequester.’ While this law does not otherwise change the amount or terms or conditions of your Direct Loan, it does raise loan fees on Direct PLUS Loans first disbursed after March 1, 2013,” reads a copy of the letter obtained by FoxNews.com.

“Specifically, the fee on your loan will increase from 4.0 percent of your loan amount to 4.204 percent. For example, the fee on a $10,000 PLUS loan will increase by $20.40 from $400.00 to $420.40,” the letter continues.

The amount of student loan debt held by Americans has skyrocketed in recent decades as the cost of college continues to rise. Americans now hold nearly $1 trillion in debt, according to the Federal Reserve, more than they hold in debt from auto loans or credit cards. Though the increase is small, it will only add costs to those loans, putting students and graduates further into debt and adding to the hindrances such debt has placed on the economy.

Sequestration, meanwhile, has begun hitting education at all different levels. In addition to these increased loan costs, low-income children across the country are being kicked out of preschool programs because of the budget cuts.

Two-Thirds Of House GOP’s Budget Cuts Come From Programs For Low-Income Americans

The House Republican budget’s vast spending cuts are overwhelmingly aimed at low-income Americans, so much so that nearly two-thirds of its budget cuts would come from poverty programs that aid the neediest people in the nation, according to the Center on Budget and Policy Priorities.

Budget Committee Chairman Paul Ryan (R-WI), the plan’s author, claims his budget will cut a total $4.6 trillion in spending by using a baseline that includes current policies like the automatic budget cuts known as sequestration, among other policies. By counting those cuts and other policies that are unlikely to remain in tact, CBPP estimates that the House Republican plan would cut even more — a total of $5 trillion. Of that, 66 percent of the cuts — a total of $3.3 trillion — would come from programs that help low-income Americans, CBPP found:

This version of the House GOP plan cuts even more from low-income programs than the 2012 version, which found 62 percent of its cuts from similar sources. That version was even more draconian than its predecessor, meaning Ryan’s budgets have gotten more devastating for the poor each year.

The social safety net keeps millions of Americans out of poverty each year, but the House GOP plan seeks to convert many of them, including food stamps, into block grants to states that follow the model of the 1996 welfare reform law that has failed to help children and families in poverty, particularly during and after the Great Recession. At the same time, Ryan’s plan provides $5.7 trillion in tax cuts aimed largely at the wealthy and corporations. Under his proposal, the average millionaire would see a tax cut of at least $200,000.

Why Single Mothers Are In Economic Crisis And What Can Be Done About It

The new report from Pew on modern parenthood is filled with important data about how Americans are handling a variety of work and family issues. Reading through the report, the most glaring conclusion for progressives is that unmarried mothers are in dire financial straits, facing much worse economic conditions than most other people in America.   Look at this table:

A full 61 percent of unmarried mothers report income of less than $30,000 per year.  In contrast, a roughly similar proportion (62 percent) of married mothers report family incomes of $50,000 or more annually.   What does this mean for single mothers? As this chart highlights, it means the recession really crushed them and they need decent-paying, full-time jobs:


Nearly half of unmarried mothers in 2012 said that their ideal situation would be to work full time (49 percent) — almost double the percentage from 2007 (26 percent).  The percentage of married mothers reporting a desire for full time work also increased but at a much lower rate (23 percent in 2012 vs. 17 percent in 2007).  Pew also finds that among working moms, “there is a significant gap between those who are married and unmarried in terms of the value they place on having a high-paying job. Only 26 percent of those who are married say this is extremely important to them personally, while 39 percent of those who are unmarried say having a high paying job is extremely important.”

Read more

Politics

It’s The Policy, Stupid: 4 Policies That Undermine The GOP’s New Voter Outreach Strategy

On Monday, following its loss in the 2012 presidential election, the Republican National Committee (RNC) released an autopsy report that aims to “grow the Party and improve Republican campaigns.” The so-called “Growth and Opportunity Project” spoke with “more than 2,600 people, both outside Washington and inside the Beltway” about how the party can appeal to the nation’s changing demographics of voters and start winning elections, and produced more than 200 recommendations to help Republicans connect with every-day Americans.

And while the project seeks to position the GOP as a more caring and inclusive party, a closer examination of the report reveals a big disconnect between the principles and rhetoric the RNC espouses and the policies the party continues to advance:

RNC RHETORIC ACTUAL POLICY
[W]e do need to make sure young people do not see the Party as totally intolerant of alternative points of view. Already, there is a generational difference within the conservative movement about issues involving the treatment and the rights of gays — and for many younger voters, these issues are a gateway into whether the Party is a place they want to be. Republicans are spending millions of dollars defending the discriminatory Defense of Marriage Act (DOMA), generally oppose federal nondiscrimination laws to protect the LGBT community and marriage equality.
The Republican Party must be the champion of those who seek to climb the economic ladder of life. Low-income Americans are hard-working people who want to become hard-working middle-income Americans. Middle-income Americans want to become upper-middle-income, and so on. We need to help everyone make it in America.” Rep. Paul Ryan’s (R-WI) budget, released last week, slashes the health and safety net programs that middle and lower income Americans rely on — like Medicare, Medicaid, and food stamps — while proposing tax code reforms that would significantly benefit top-income earners and corporations. A recent analysis from the Center on Budget and Policy Priorities concluded that the budget “would get at least 66 percent of its $5 trillion in non-defense budget cuts over ten years (relative to a continuation of current policies) from programs that serve people of limited means.” GOP governors have offered plans to axe sate corporate and personal income taxes, replacing them instead with an increase in the sales tax. Such policies would directly benefit the rich at the expense of the poor.
We have to blow the whistle at corporate malfeasance and attack corporate welfare. We should speak out when a company liquidates itself and its executives receive bonuses but rank-and-file workers are left unemployed. We should speak out when CEOs receive tens of millions of dollars in retirement packages but middle-class workers have not had
a meaningful raise in years.”
Republicans have proposed slashing the corporate tax rate just as corporate profits are skyrocketing and wages for middle and lower income Americans remain stagnant. The GOP seeks to repeal Wall Street reform and resists any efforts to tax capital gains at a higher rate, close the carried interest loophole, or raise any taxes on higher-income earners. Rep. Paul Ryan’s (R-WI) budget, for instance, “would result in tax cuts worth an average of about $330,000 a year to households with incomes of more than $1 million a year.”
“Our candidates, spokespeople, and staff need to use language that addresses concerns that are on women’s minds in order to let them know we are fighting for them. Republicans in Congress oppose provisions in the Affordable Care Act that provide contraception coverage to women without additional co-pays, have backed measures to allow employers to deny birth control to their female employees, voted against equal pay for equal work, and even stonewalled the Violence Against Women Act. Lawmakers on the state level have enacted numerous provisions that seek to severly restrict access to abortion services.

House GOP Budget Would Give Millionaires A $200,000 Tax Cut

The latest House Republican budget would grant taxpayers with incomes above $1 million at least $200,000 in tax cuts even if the GOP closes tax loopholes to help pay for the plan, according to an analysis from Citizens for Tax Justice.

The GOP plan, authored by Budget Committee Chairman Paul Ryan (R-WI), aims to reduce the top income tax rate to 25 percent and repeals many other taxes on the rich, including the Alternative Minimum Tax and increases included in Obamacare. Ryan wants to pay for the tax cut by closing loopholes and ending tax expenditures. The budget didn’t specify which loopholes and expenditures would be eliminated, but even if all of them that benefit the rich were done away with (except for preferences for capital gains and other investments, which Ryan has said he will keep), the budget would grant millionaires a tax cut in excess of $200,000. If it doesn’t eliminate loopholes, the tax cut would only grow larger, CTJ found:

In fact, under Ryan’s plan taxpayers with income exceeding $1 million in 2014 would receive an average net tax decrease of over $200,000 that year even if they had to give up all of their tax expenditures. These taxpayers would see an even larger net tax decrease if Congress failed to limit or eliminate enough tax expenditures to offset the costs of the proposed tax cuts.

Like former GOP presidential candidate Mitt Romney, Ryan insists that his plan will simultaneously grant a large tax cut to the wealthy, avoid tax increases on the lower- and middle-classes, and maintain the current level of revenue. The Tax Policy Center found during the election that those goals were impossible to maintain under Romney’s proposal and that to avoid adding to future deficits and debt, the plan would have to raise taxes on the middle class by an average of $2,000.

The current House GOP proposal provides an even bigger tax cut, making it even less likely that Ryan could raise sufficient revenues from the closure of tax loopholes to offset the estimated $5.7 trillion cost. To pay for the plan, then, the GOP would have no choice but to raise taxes on the middle class (by an average of $3,000) while granting a massive tax cut to millionaires. If it doesn’t, the Republican plan to reduce the debt will instead add trillions of dollars to it.

Econ 101: March 18, 2013

Welcome to ThinkProgress Economy’s morning link roundup. This is what we’re reading. Have you seen any interesting news? Let us know in the comments section. You can also follow ThinkProgress Economy on Twitter.

  • President Obama will officially nominate Thomas Perez as his next Labor Secretary today. [Washington Post]
  • Cyprus is struggling to avoid a bank run as it seeks to finance a bailout. [Bloomberg]
  • Wall Street made millions of dollars in fees off of Detroit’s financial crisis. [Bloomberg]
  • Federal regulators are investigating whether high-speed traders are intentionally distorting markets. [Wall Street Journal]
  • Strike Debt, an offshoot of Occupy Wall Street, has abolished $1.1 million in debt for more than 1,000 people. [CNN Money]
  • Two prominent attorneys general are calling on Obama to fire Federal Housing Finance Agency director Ed DeMarco. [New York Times]
  • Economists are calling on the United Kingdom to use spending to boost its economy. [CNBC]

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