Friday, April 15, 2011

EDITORIAL >>Fuzzy math in Congress

Whatever their personal ideology, every American ought to clip and save the roll call on the budget blueprint for 2012 that the U. S. House of Representatives passed Friday on a near party-line vote. All but five Republicans voted for it; all Democrats, including Arkansas’ Republican-leaning Democrat, Mike Ross, and the five stray Republicans voted against it.

The roll call on the budget plan, which was crafted long ago by Rep. Paul Ryan, the new chairman of the House Budget Committee, defines a congressman’s basic instincts and identifies his real constituency better than any roll call that we are likely to see and better than any campaign commercial or congressional newsletter ever will.

You need neither exult in the resolution’s passage nor mourn it because it will not become law. It will never pass the Senate and the president would veto it anyway. But it serves as a splendid marker for voters. If you agree with the fiscal and moral strategies that the resolution represents and you live in the First, Second or Third congressional districts, you now have the congressman of your choice, and if you live in the Fourth District, you need to find a replacement for Mike Ross. But if you don’t agree with the priorities or the likely results, you do not now have a congressman who looks after your interests in the First, Second and Third districts. Rick Crawford, Tim Griffin and Steve Womack praised the plan to the heavens. They said it achieves their dreams as congressmen.

And here is what it does and what it doesn’t.

It is supposed to be the answer to the historic budget deficits of the past nine years, but it would not achieve a balanced budget anytime in the next 20 years, unless the country adopts a balanced-budget constitutional amendment and forces it at gunpoint. Whether it would dramatically reduce the deficit if it became law is anybody’s guess.

It would dramatically cut income taxes for corporations and the richest Americans, from a top marginal rate of about 35 percent to 25 percent. Taxes on corporations and the highest-income Americans already are at near historic lows, and this would drop them even farther. Many of the country’s biggest and most profitable companies pay no income taxes now. General Electric reported $14.2 billion in profits last year but paid no federal income taxes. The Heritage Foundation, which helped draft Ryan’s plan, believes that if GE and other corporations like it get even more tax breaks, they will hire more people. What do you think? The major oil companies, which are reporting record profits every year (Exxon-Mobil $9.5 billion in the fourth quarter), would get lucrative tax incentives in perpetuity under the Republican plan.

The Heritage Foundation says that if corporations and investors get more tax breaks, they will put millions of people to work and that federal revenues will go up, not down. The foundation offered the same study in 2001. President George W. Bush and Congress bought it and slashed taxes on the highest incomes and corporations. Federal revenues ultimately sank by $600 billion a year, triggering the largest budget deficits in history, and the American economy experienced the weakest job creation since World War II. But if a theory consistently produces disaster instead of bonanza, you just keep trying it.

The big reductions in federal spending would come mainly at the expense of the elderly and children. They would almost precisely make up for the tax cuts for the rich and the GE class.

Medicare would be privatized, completing the experiment begun in 2003 when the Republican Congress passed the prescription-drug program, turned it over to the insurance companies and pharmaceutical industry and gave the elderly and disabled an incentive to switch from Medicare to a private insurance plan. The government would pay extra if a person bought a private plan—enough (about 14 percent more) to provide a handsome profit to the insurance companies and provide an extra benefit or two. It sped Medicare toward bankruptcy.

When people reach 65 under the Republican blueprint, Medicare would no longer be available. Instead, they would have to buy a health insurance policy from Aetna, United Healthcare, Cigna, Blue Cross or another company. The government would give them a voucher to pay part of the premiums. Then the government would put a ceiling on expenditures and the insurance companies would determine how much health care you would get for it. Estimates are that the elderly would pay about 68 percent of their hospitalization and doctor costs.

Rep. Griffin, our congressman, said that was a good deal. It will save Medicare, he said. Our hunch is that most seniors will not view that as salvation.

The great irony is that for two years, during which Congress debated, passed and then debated again the Patient Protection and Affordable Care Act (aka “Obamacare”), Republicans and other enemies of universal coverage persuaded the elderly and disabled and those approaching retirement age that the law would rob them of their Medicare protection or else dramatically reduce their benefits. Actually, the law expands coverage. So now the Republicans are doing exactly what they said Obama was doing and counting on people not noticing or caring.

The House budget plan would decimate Medicaid, capping federal responsibility through block grants and shifting the burden of nursing-home care for the aged and disabled, medical and institutional care for severely sick and handicapped children to the states. Yes, federal spending would be slashed, but the states would have to raise taxes (dramatically in Arkansas) to carry on the programs or else face the terrible choices of suspending or reducing long-term care for the aged and disabled and stopping treatment of sick children.

The bold House budget plan would make other spending cuts, but they would affect the deficit only at the margins. It would end the new insurance protections for those who in the past had lost their insurance for chronic illnesses and pre-existing conditions, and cut federal aid to the public schools, Pell grants for college students, research on alternative clean energy, medical research, home heating assistance, food stamps and other programs for the very poor and disabled.

Paris Hilton, Warren Buffett, Bill Gates, George Soros, the Koch brothers, GE, Exxon Mobil, Chevron and some of our very best citizens in Arkansas ought to love it. They will all remember Tim Griffin and his colleagues and what they did for them. You should, too.             —Ernie Dumas