An Unbalanced Budget

Will Rogers once said, “I do not make jokes about the government. I just watch the news and report the facts.” Unfortunately, it seems as if the U.S. Congress has been undergoing many political fiascos on a wide range of issues, from health care, to gay rights, to the economy. In fact, one especially large political disaster has been the budget, or how the government plans to reduce the $1.1 trillion deficit of 2012. Recently, Paul Ryan proposed his budget for the Republicans in the House of Representatives, and his budget includes the following provisions:

• Repealing the Affordable Care Act (Obamacare)
• Replacing Medicare with a subsidized, private insurance program
• Reducing the top income tax rate from 39.6% to 25%
• Cutting spending for science and infrastructure
• Limit eligibility for Temporary Assistance for Needy Families to only people who are working
• Cutting food stamps by $130 billion

House Budget Chairman Paul Ryan (R-WI) must learn to compromise with Democrats in order to balance the budget.

Clearly, in order to balance the budget over the next ten years, the Paul Ryan plan heavily relies on reducing government involvement in social welfare plans. Unfortunately, Paul Ryan’s plan includes some radical, unwelcome changes to the United States budget.
First, the Paul Ryan plan is a step in the wrong direction for America because of its unhealthy changes in government-provided health care. According to Rohan Dhoopar ’15, “By repealing Obamacare entirely, the Paul Ryan plan gives free rein to bureaucratic, profit-driven private insurance companies.” In fact, Obamacare includes necessary regulations that limit private bureaucracy. For example, in 2012, Obamacare saved patients $1.5 billion since it forced insurance companies to spend 80% of premiums on providing healthcare. This measure prevents these companies from using large portions of individuals’ premiums to fund bureaucratic administration or profit; rather, it requires that these companies spend more money actually providing people with care.

Additionally, as seen in Massachusetts, the individual mandate can reduce the cost of health insurance, since it spreads out the costs of health care over all people, rather than just the sick. Also, because it insures people with pre-existing conditions and 1.6 million more Americans under the age of 26, only 33% of Americans support repealing Obamacare. Moreover, by reducing funding for Medicaid (government subsidized health care for the poor), this budget prevents 12 million Americans from receiving coverage through the program. Finally, the plan includes changing Medicare, government health insurance to the elderly, into a private insurance program. Unfortunately, according to the Center for American Progress, “As insurance companies cherry picked the healthiest seniors to join their plans, traditional Medicare would be left with the sickest, most expensive patients, leading to a downward death spiral for traditional Medicare. At the same time, the value of the vouchers would not keep up with the rising cost of health care, allowing insurance companies to reap big profits as seniors would be forced to pay more for the same benefits they have now.”

Furthermore, the House budget plan embraces more austerity by reducing spending for education, science, research, and infrastructure. Investing in infrastructure and education can ensure that the United States economy can have long-term competitiveness while providing public sector jobs to continue the economic recovery, according to Paul Krugman, Nobel Prize winner in economics and professor at Princeton University.

Finally, Paul Ryan’s budget adopts tax decreases that disproportionately benefit the wealthiest Americans. For example, it reduces the top income tax rate from 39.6% to 25%, ensuring that wealthy families can keep an average $1.2 million more. However, this “revenue-neutral” plan actually increases the deficit by $5.7 trillion, according to the non-partisan Tax Policy Center. Moreover, this particular policy is out of touch with the American people, since 65% of Americans believe that tax increases for the wealthy are necessary. “In order to address the United States deficit,” says Aashay Patel ’15, “a moderate plan is necessary, one that involves both spending cuts and tax increases. Unfortunately, the Republicans seem adamant only to adopt the former.”

All in all, the Center for American Progress concludes that the Paul Ryan budget plan includes many elements similar to the one proposed in 2012.  However, the American people voted in the 2012 election, and the party advocating for increased regulation of the health insurance, higher taxes for the rich, and more money spent on social welfare services and infrastructure.  Therefore, it is necessary for the Republicans and Paul Ryan to rethink their economic strategy to incorporate more moderate ideas.


[1] McLaughlin, Walter, “The Paul Ryan and Patty Murray Budget Plans: a Comparison” (2013)

[2] Mukherjee, Sy “ On Obamacare’s Third Anniversary, Here are Three Ways the Law Has Helped Americans” (2013)

[3] Culp-Ressler, Tara “Support for Repealing Obamacare Plunges to an All-Time Low” (2012)

[4] Young, Geoffrey. “Paul Ryan Health Care Cuts Would Increase the Number of Uninsured by Millions” (2013)

[5]Linden, Michael “Third Time’s Not a Charm” (2013)

[6] Krugman, Paul “Cheating Our Children (2013)

[7]Gleckman, Howard “House GOP Would Need $5.7 Trillion in Tax Hikes to Offset Ryan Rate Cuts” (2013)

[8] Steinhauser, Paul, “Trio of Polls: Support for Raising Taxes on the Wealthy” (2012)

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