DPCC REPORT: CUT, CAP & BALANCE IS RYAN PLAN ON STEROIDS
Under Reckless GOP Plan, Seniors Could See Their Medicare Benefits Cut By $2,500 Over and Above the Ryan Plan Cuts in 2021, While Social Security Benefits Could Be Slashed $3,000 in 2021
Theater trumps serious solutions this week as Congressional Republicans plan votes on their so-called “Cut, Cap, and Balance” proposal. This reckless plan is the Ryan budget on steroids. It would require even deeper cuts to Medicare and Social Security than the controversial Ryan plan – in fact, under the GOP plan, seniors in 2021 could see their Medicare cut by nearly $2,500 beyond the cuts in the Ryan plan, and they could see their Social Security cut by $3,000 in 2021, with even larger cuts down the road. And while slashing benefits for seniors, the reckless Republican plan would constitutionally protect tax breaks for the wealthy and special interest loopholes. Even the Wall Street Journal acknowledges that the balanced budget amendment included in the GOP package "would go further" than the Ryan budget in terms of spending caps and cuts.
THREE STRIKES AGAINST THE GOP CCB PLAN:
1. Reckless Spending Caps That Will Force Massive Cuts to Medicare & Social Security & Discretionary Spending: The GOP plan institutes overall spending caps that reach 19.9% of GDP by 2021, which is lower than both the historic average (20.8% over the last 40 years) and the Ryan budget (20.75% by 2022). The so-called “Balance” piece of the package goes even further, bringing spending down to levels not seen since 1956, before Medicare and Medicaid even existed. This would entail cuts even deeper than the Ryan budget and would most certainly require gutting Medicare, Social Security, and other vital programs.
2. Balanced Budget Amendment Would Constitutionally Protect Tax Breaks for Millionaires and Special Interests While Slashing Spending: The GOP plan requires that a Balanced Budget Amendment be passed by Congress and sent to the states prior to raising the debt ceiling. The package stipulates that the BBA would have to be “similar” to one of three BBAs introduced by Republicans this year, including the version offered by Senate Republicans. This would force a default unless Congress agreed to an extreme cap on spending and a requirement for a 2/3 supermajority to close tax any special interest tax loopholes.
3. Immediate Spending Cuts That Will Hurt the Economy and Slow the Recovery: The GOP plan includes caps to discretionary and mandatory spending in 2012 that are the same levels as the Paul Ryan budget, which would mean a 70% cut to clean energy, a 25% cut to education, and cost an estimated 700,000 private-sector jobs.
THE CCB PROPOSAL IS THE SECOND FRONT IN THE GOP WAR AGAINST MEDICARE:
“Cut, Cap, and Balance” would – in practice – require making additional cuts of $400 billion a year or more beyond the House Budget Resolution to get near the spending levels required by the BBA. Because the House Budget Resolution already cuts discretionary spending, Medicaid and other mandatory programs so deeply, achieving a balanced budget without raising revenues would likely – as Bob Greenstein of the Center for Budget and Policy Priorities has written – “inexorably subject Social Security and Medicare to deep reductions.” These cuts could mean:
Spending Cuts Across the Board: If the required spending cut were across the board, it would mean all programs (including Social Security and Medicare) would be cut by 10% by the end of the decade on top of the House Budget Resolution.
Defense Exempted: If defense spending alone were exempted, it would mean that all other programs (again, including Social Security and Medicare) would be cut by about 12% by the end of the decade on top of the House Budget Resolution.
All Cuts to Social Security and Medicare: If cuts came only from Social Security and Medicare, it would translate to a cut of about 20% to those programs by the end of the decade.
To understand the magnitude of these cuts for beneficiaries, in 2021 alone, a 20% cut could translate to a $3,000 per year reduction in average benefits for the 70 million Americans on Social Security, and an average cut of nearly $2,500 per Medicare beneficiary (again, beyond the cuts associated with the House Budget Resolution’s voucherizing of Medicare.) A 12% cut could translate to a reduction of average Social Security benefits of about $2,000, and an average cut of $1,400 per Medicare beneficiary in 2021.These cuts would likely grow in the years to follow.
Click on the link below to see how many seniors in your state could see their Social Security benefits cut by $3,000 in 2021 alone – and their Medicare benefits cut by $2,500 – on top of the drastic Medicare cuts in the Ryan plan.