Scott Garrett’s Vision for Our Economic Demise
I wrote a tounge-in-cheek article last Tuesday entitled It’s Time for Another symbolic Vote, Mr. Speaker in which I urged Scott Garrett to convince his Republican colleagues to hold a vote on Paul Ryan’s revamped economic roadmap.
Ryan’s’ new plan still replaces Medicare with a voucher system that would shift the costs of senior health care from the government to the elderly. In addition, Ryan would replace the current multi-tiered income tax rates with only two rates, 10% and 25%. The plan would eliminate most personal deductions including the home mortgage deduction and likely the deduction for state and local taxes. I say “likely” because the Ryan Plan is quite vague on details.
The Ryan Plan: More Fantasy than Reality, written in The Fiscal Times by Bruce Bartlett, takes the plan to task. The salient point to me was this paragraph:
“There are virtually no details. For example, we have no idea what income level the new tax brackets would apply to. Consequently, it is impossible to score the Ryan plan accurately. The Tax Policy Center took a stab at it by assuming that the current 10 percent bracket would stay the same and the 15 percent bracket would be abolished, as well as all rates above the current 25 percent bracket. It estimates that this provision would reduce revenues by $2.5 trillion over the next 10 years. The total revenue loss of all provisions would be $4.6 trillion. ”
So in the upside down world of Paul Ryan, we’re going to balance the budget by taking in less revenue. To make the numbers add up, we would have to eliminate virtually all discretionary spending. Ryan’s plan wouldn’t impact military spending and would effectively lower taxes on the wealthy while at the same time eliminating funding for the FDA (the people tasked with keeping our food safe), AIDS research, food stamps, the earned income tax credit, funding for NIH research, etc.
This is the plan all but 10 House Republicans vote for on Wednesday of this week. So I thank you Republicans for once again voting to balance the budget on the backs of the poor, the middle class and the elderly while at the same time finding a way to give tax breaks to the top 1 percent.
I thought this was the best possible way to draw a clear distinction between the different direction the two parties have for this country. I was wrong. Scott Garrett wasn’t satisfied with simply supporting this “more fantasy than reality” legislation. In his opinion, Ryan’s plan did not go far enough. Scott Garrett proudly acknowledged being the architect of an alternative budget the Republican Study Committee (RSC) brought up as a substitute to the Ryan proposal.
Scott Garrett’s proposal is the Ryan plan on steroids. In addition to keeping Ryan’s replacement of Medicare with a voucher system, Garrett proposed two far-reaching cuts. One would cut discretionary spending by nearly $100 billion more in 2013. He would then cap spending at that reduced level for 5 years. Like the Ryan proposal, Garrett’s plan requires us to take him at his word because neither Representative wants to actually tell the American people what specifically will be removed from the current budget. In theory, Garrett’s plan cuts $2.2 trillion more than Ryan’s plan, and supposedly balances the budget 20 years earlier than would Ryan’s proposal. Again, with so little of either proposal detailed, we’re forced to guess at most of the substance.
At the risk of repeating myself, it makes no sense to limit – or in this case, stop government spending during a recession. There are three sectors that inject capital into the economy. Business, consumers and the government. Businesses aren’t spending or hiring because there is a reduced demand for goods and services. Consumers aren’t spending because so many people are either out of work, under-employed or fear being laid off. Thus government is the only sector capable of infusing the economy with capital. Scott Garrett would prefer to see this recession turn into a depression.
Mr. Garrett’s proposal failed to pass on the House floor, but not before Mr. Garrett and 135 of his Republican colleagues went on record saying that the Ryan plan didn’t go far enough. The cuts should be deeper and the burden for these cuts should fall primarily on the elderly and the people just trying to keep their heads above water.
Mr. Garrett has laid this gift at the feet of his Democratic challengers. If’s time for these challengers to expose this gift for what it is; an economic depression wrapped in faulty assumptions and bad economic policy.