Tuesday, April 19, 2011

Alan S. Blinder: Paul Ryan's Reverse Robin Hood Budget

“Why do I oppose Rep. Paul Ryan's plan for reducing the federal budget deficit? 

Worst things first. The plan threatens to eviscerate Medicare by privatizing it—with vouchers that, absent some sort of cost-control miracle, would fall further and further behind the rising cost of health insurance. And to make that miracle even less likely, House Republicans want to repeal every cost-containment measure enacted in last year's health-reform legislation.
Then there's Medicaid, which is a lifeline for the poor. House Republicans want to turn it into a block grant, underfund it, and let the 50 states figure it out.
According to the Center on Budget and Policy Priorities, about two-thirds of Mr. Ryan's so-called courageous budget cuts would come from programs serving low- and moderate-income Americans, while the rich would gain from copious tax cuts. That's courage?
This reverse-Robin Hood redistribution is bad enough in the abstract. Coming on the heels of 30-plus years of rising inequality, it is breathtakingly mean-spirited.
How many Americans know that 72% of Mr. Ryan's claimed budget cuts would go to fund tax cuts that overwhelmingly benefit the rich?
The Ryan plan has received vastly too much praise from people who should know better. For a while, it was even celebrated as "the only game in town," which it never was. It was preceded by both the Bowles-Simpson and Domenici-Rivlin plans, which are vastly superior in every respect. Within days of Mr. Ryan's announcement, President Obama chimed in with his own ideas on deficit reduction—another huge improvement over the Ryan plan. Now we await the Senate Gang of Six's entry.
The House Republican plan is not the only game in town. 
It's only the worst.”
---Alan S. Blinder* - Excerpt from Wall Street Journal Op-Ed: April 19, 2011
*Mr. Blinder, a professor of economics and public affairs at Princeton University, is a former vice chairman of the Federal Reserve.