The 5 Worst Things About Rand Paul’s Budget Proposal

Amid all the budget talk in Washington last week, Kentucky Sen. Rand Paul’s (R) was easy to lose in the shuffle. Paul’s budget failed miserably when put to a vote, but it did garner support from conservative groups and key Republican politicians, including Senate Minority Leader Mitch McConnell (R-KY).

Republican budgets have a knack for giving massive tax cuts to the wealthy while slashing social services — including entitlement programs — and Paul’s managed to go even farther. The budget, Paul estimates, would balance in five years, and it provides generous tax cuts to the rich while saving more than $9 trillion by gutting entitlements and the social safety net. And while the lopsided vote may make it seem even too radical for Republicans, it contains many proposals GOP presidential candidates were pushing in the 2012 primary elections:

1. Privatizes Social Security and Medicare: Paul’s budget would raise the Social Security eligibility age and gives workers the option of private accounts, an idea that would demolish workers’ savings during economic downturns. An October 2008 retiree, for instance, would have lost $26,000 in a private Social Security account during the Great Recession, according to one study. Paul’s plan would also privatize Medicare, going a step farther than even Paul Ryan’s House Republican budget did and driving up the cost of health care for seniors even more.

2. Institutes a flat tax: Paul would replace the current progressive tax system with a flat tax rate, effectively providing the wealthiest Americans with a massive tax cut while raising taxes on many middle- and lower-class families. This is a feature of all flat tax plans, and Paul’s would cut the tax rate paid by more than half, slicing it from 35 percent to just 17 percent.


3. Eliminates investment taxes: Paul’s plan finds a way to grant the wealthy an even bigger tax cut by also eliminating all taxes on capital gains, dividends, and other investment income. Republicans like Paul are convinced that cutting capital gains tax rates boosts economic growth; however, evidence does not support that notion. Instead, studies have found that low tax rates on investment income are the biggest driver of growing American income inequality.

4. Abolishes the Dept. of Education: Paul would eliminate in total the departments of Education, Energy, Commerce, and Housing and Urban Development, ideas conservatives have long pushed. The Department of Education alone manages federal student loan programs, funding for low-income schools, programs to help special needs students, and many other services. Eliminating it, to say nothing of the other agencies, would risk that “poor, special education and minority students would be underserved by public schools even more than they already are.”

5. Cuts Medicaid and the safety net: Paul would block grant funding for Medicaid, food stamps, the children’s health insurance program, and other nutrition assistance programs, essentially gutting America’s social safety net. While Republicans — including Paul Ryan — love the idea of leaving such programs to the states, the reality is that such reforms leave the programs more susceptible to budget cuts. The 1996 welfare reform law block granted that program, which has done nothing but fail to help families in need since.