By Jeremy Los
“I do not want the government to shut-down, but the bottom line is Washington needs to get its finances in order. Out of every dollar the United States government spends, 40 cents is borrowed. This is unsustainable.” -- Rep. Brian Bilbray (R-San Diego)
“Republicans are trying to ram through a disgraceful budget that would destroy Medicare, drive an entire generation of seniors into poverty, but give the wealthiest Americans even more tax cuts. It’s shameful. It’s immoral.” --Rep. Anthony Weiner (D-New York).
April 15, 2011-(Washington D.C.)-- President Barack Obama laid out his fiscal agenda in a speech Wednesday, announcing plans to cut our massive national debt while pledging to preserve Medicare, a program credited with lifting millions of seniors out of poverty. View his speech.
In a speech highly critical of the Republican agenda, President Obama proclaimed the need to “maintain the America" that he and others believe in. “There’s nothing serious about a plan that claims to reduce the deficit by spending a trillion dollars on tax cuts for millionaires and billionaires. “There’s nothing courageous about asking for sacrifice from those who can least afford it and don’t have clout on Capital Hil," the President declared.
The GOP budget proposal, which was drafted by House Budget Committee Chairman Rep. Paul Ryan of Wisconsin calls for a $6.2 trillion reduction in federal spending over the next ten years. Rep. Ryan’s fiscal plan will look to reduce the national debt by some $4.4 trillion in the next ten years. According to CNN, the plan calls for government spending to drop below 20% as opposed to the 23% proposed by President Obama.
The Republicans would achieve that extra 3% in debt reduction through radical changes to the Medicare and Medicaid system, and an extension of the Bush-era tax cuts.
The Republican agenda has put social health programs like Medicare and Medicaid are securely in the cross hairs. The GOP proposal will look to slash these programs considerably in order to reign in federal spending over the next decade.
Republicans have threatened to refuse to sign any budget that raises taxes or does not include deep cuts in social programs. Last week, Congress narrowly avoided a government shut down by passing a stop-gap funding measure. However the potential for a shut-down still looms if both sides cannot come to an agreement.
By contrast, emphasizing core Democratic values, the President laid out a fiscal plan that will look to cut $4 trillion from the $14 trillion national debt over the next 12 years; Mr. Obama proposed long-term spending cuts, tax increases to the wealthy, and changes to social welfare programs.
According to the New York Times, the President’s proposal will seek to reduce the growth in Medicare spending and lower prescription drug spending. The proposal will also see Medicaid’s funding cut by $100 billion over the next decade—a far less drastic change to the program than what the GOP has proposed
According to CNN, under the policy, starting in 2022 those who are now under 55 would no longer have their medical bills paid for by the government, Medicare would be turned into a voucher program. Recipients pay toward a premium for private health insurance, which the government would subsidize. Those individuals currently 55 or over would not be affected by the overhaul.
Medicaid would turn into a block grant program where the federal government gives states a lump sum of money to care for low-income families. This money is to be spent at the state’s discretion. According to the proposal, federal spending would be $771 billion lower over the next decade.
Senator Bernie Sanders, independent from Vermont, blasted the GOP plan as a “reverse Robin Hood” budget that would rob from the poor to put money in the pockets of the wealthiest Americans.
The President released his fiscal plan a week after Republican leaders unveiled the budget plan for 2012 and beyond. Throughout his speech the President was very critical of the GOP budget plan, stating that the Republican plan “paints a vision of our future that is deeply pessimistic.”
The proposed overhauls to the social health care systems are not options in the eyes of President Obama.
He faulted the GOP for wanting to “ give people like me a $200,000 tax cut” paid for by asking some seniors to pay up to $6,000 more in health costs. “That’s not right, and it’s not going to happen as long as I am president.”
Those tax cuts will come in the form of permanently extending the Bush-era tax cuts, according to CNN. The GOP plan will also look to close loopholes in the corporate tax structure, the same loopholes that many have pointed to, as the reason GE did not pay taxes this past year. According to CNN, the budget plan will also look to cut the corporate tax rate from 35% to 25%.
This budget proposal is “Robin Hood in reverse,” in the eyes of Independent Senator Bernie Sanders of Vermont.
According to the New York Times, President Obama’s plan calls for eliminating tax breaks for wealthy Americans as well as allowing for the Bush-era tax cuts to expire for top earners and limiting itemized deductions for them.
Tax increases will account for $989 billion over the next 10 years, according to ABC news. $636 billion of that will come in the form of increased taxes on those making $250,000 or more.
“Despite Republican claims to the contrary, the rich are paying less in income tax than they have in decades. The richest Americans today enjoy an income tax rate of 35% maximum and most people pay less than 30%. In the 1960s the richest Americans paid up to 55% in income taxes,” said California Democratic Party Chairman John Burton, in an open letter. “The richest 1% of Americans now hold 40% of our nation’s wealth. Thirty years ago the top 1% held only 24% of the total wealth in the U.S.
President Obama’s speech has drawn criticism due to its uncharacteristically partisan nature.
“I thought the President’s invitation was an olive branch; instead we got was a speech that was excessively partisan, dramatically inaccurate, and hopelessly inadequate to addressing our countries pressing fiscal challenges,” said Rep. Ryan in response to Obama’s speech. “What we heard was not fiscal leadership from our commander in chief.”
"I rarely heard a speech by a president so shallow, so hyper-partisan and so intellectually dishonest, outside the last couple of weeks of a presidential election where you are allowed to call your opponent anything short of a traitor. But we're a year and a half away from Election Day and it was supposed to be a speech about policy," conservative syndicated columnist Dr. Charles Krauthammer said about President Obama's speech.
As one budget battles ends this week another one begins and this one will likely last until the last possible minute as well. The fiscal future of our country is at stake, and the partisan war of words will likely continue as well.