Hey, check it out.
My old Obama admin pal Austan Goolsbee has a new blog* with a great opening piece taking apart this terribly misleading oped by Glenn Hubbard. Hubbard’s punchline is that the President’s budget implies tax increases of 11% of everyone earning under $200,000.
Austan firmly nails the two main problems with Glen’s analysis. First, either Hubbard, a Romney adviser, is cooking the books, or CBO is. That’s right: the Congressional Budget Office finds that the President’s budget stabilizes the debt-to-GDP ratio within the 10-year budget window (it’s the middle line in the figure below). And it does so without raising taxes on households below $250K.
Second, Austan cites some of our work here at the Center on the implications of Gov Romney’s fiscal plans to cut spending, cut taxes, and balance the budget. As shown in the figure, outside of Social Security, cuts to Medicare, Medicaid, and other non-defense programs could amount to 56% by 2022.
As the Center’s analysis reveals, even if Gov. Romney punts on his oft-stated balanced-budget goal, “the cuts would be severe.” [sic!]
If policymakers reduced all nondefense programs proportionately, they would face an across-the-board cut of 20 percent in 2016.
Cutting Social Security benefits by 20 percent would reduce the average monthly retirement benefit from $1,230 to $990 and push more than 3.1 million additional people into poverty.
Medicare would be cut by $176 billion in 2016 and $1.9 trillion from 2014 through 2022. Achieving cuts of this size solely through reducing payments to hospitals, physicians, and other health care providers would threaten beneficiaries’ access to care. Thus, beneficiaries would almost certainly face large increases in premiums and cost-sharing charges.
Medicaid and the Children’s Health Insurance Program (CHIP) would face cumulative cuts of $1.3 trillion through 2022. Repealing the coverage expansions of the 2010 health reform legislation, as Governor Romney has proposed, would achieve more than the necessary savings. But it would leave 34 million people uninsured who would have gained coverage under health reform.
Cuts in the Supplemental Nutrition Assistance Program (SNAP, formerly known as the Food Stamp Program) would throw 12 million low-income people off the benefit rolls, cut benefits deeply — by over $1,700 a year for a family of four — or some combination of the two. These cuts would primarily affect very-low-income families with children, seniors, and people with disabilities.
Compensation payments for disabled veterans (which average less than $13,000 a year) would be cut by more than one-fourth, as would pensions for low-income veterans (which average about $11,000 a year) and Supplemental Security Income (SSI) benefits for poor aged and disabled individuals (which average about $6,000 a year and leave poor elderly and disabled people far below the poverty line).
Nondefense discretionary spending would be cut by $166 billion in 2016 and $1.6 trillion through 2022, in addition to the average cut of 11 percent already in law as a result of the caps in the Budget Control Act and the appropriations bills passed during 2011. (This category of the budget covers a wide variety of public services and most of the day-to-day functions of the federal government, such as aid to elementary and secondary education, veterans’ health care, law enforcement, national parks, environmental protection, and biomedical and scientific research.)
*He calls it “Austan Goolsbee’s Blog”—how does he come up with this stuff!? Such simplicity, such elegance…
Well, here’s hoping Goolsbee’s second point of analysis about Hubbard’s OpEd catches on — it’s a bit long for a bumper sticker, but it probably has potential as another ‘NewzJam’ item:
I dearly wish that Goolsbee had tossed in a few additional points, like ‘why Hubbard’s analysis utterly fails to mention all the revenues that get siphoned off to tax havens – and why tax cuts are incapable of creating the conditions for prosperity’. But my suggestions are definitely too long for a bumper sticker.
It’s good to see more facts and analysis entering the conversation: the CBPP and Bernstein shouldn’t have to do so much of the heavy lifting, particularly given the implications of Citizens United for what might be coming in future months.
Now it’s Austan Goolsbee’s GoolsBlog. I like it!