Everything You Want to Know About the Budget

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Are you secretly confused by all this talk about the Ryan budget? If the conflicting rhetoric, incalculable numbers and incessant punditry leave your head spinning — don’t worry, you’re not alone. Here to help is Mattea Kramer, author of A People’s Guide to the Federal Budget and senior research analyst for the National Priorities Project, which aims to make our complex federal budget “transparent and accessible so people can exercise their right and responsibility to oversee and influence how their tax dollars are spent.” We caught up with Kramer via phone to learn more about the Ryan budget, the president’s budget and the budgeting process in general.

Lauren Feeney: There’s a chart on your website comparing the budgetary priorities of vice presidential candidate Paul Ryan and President Obama. Ryan’s budget contains a similar chart (on page 5), but the charts differ dramatically in their emphasis and conclusions. Can you tell us about some of the key differences?

Mattea Kramer: One thing that I would immediately draw attention to is the difference on taxes. Ryan proposes really deep tax cuts — a change from our current six tax brackets to only two. The reality of that change would be really rich tax cuts for folks at the top of the income spectrum. Naturally, Ryan doesn’t couch it in those particular terms — he says that this is a pro-growth, pro-jobs platform.

Because of that tax platform, Ryan actually projects he doesn’t have the revenue to balance the budget within the ten-year time horizon — he projects a $287 billion deficit in 2022. So, while presenting himself as a deficit hawk, because he cuts revenue so dramatically, he’s not projecting enough income to close deficits. That’s an interesting point which is not put forth in a straight manner in The Path to Prosperity. As for the president, his proposal doesn’t do much on deficit reduction, so by 2022 his projected deficit is still north of $700 billion. So of course, that’s not something that President Obama puts forth openly.

Another important item to look at is Medicare. The visions are very different and they’ve been distorted hugely in media coverage, in part because Medicare is so complicated that it’s easy to distort. The president proposed savings in the Medicare Advantage part of Medicare, a program that allows seniors to buy private insurance and have it covered by Medicare. The savings were found by mandating a reduction in insurance company profits. He projected initially about $500 billion in savings by changing these rules. Ryan and Romney have criticized the president heavily for this, saying that he’s robbing Medicare in order to pay for Obamacare. That’s gotten a huge amount of play and created quite a bit of fear, among seniors in particular. The reality is that this wouldn’t cut benefits to seniors. There’s the potential that seniors could face less choice down the road because fewer insurance companies would want to participate in Medicare Advantage because of that limit on profits. But it doesn’t represent a benefit cut — that’s been played up erroneously.

Now, on the Romney-Ryan side, they proposed a voucher program for Medicare, which would offer seniors a fixed amount to buy private health insurance and would be offered side by side with the traditional Medicare program. The concern with that policy is that it would leave seniors on the hook for any difference in health care cost beyond what’s covered by their fixed voucher amount. As health care costs continue to rise, seniors’ out of pocket costs will rise, potentially, by thousands of dollars a year.

The budget put out by Paul Ryan and now largely endorsed by Mitt Romney represents a totally different kind of relationship with our federal government than the one that we have now, and that is something that gets lost in bickering over particular details. It proposes changes across the board, to just about every program under the sun. The tax cuts would starve the federal government of income, basically guaranteeing that the federal government couldn’t pay for things like Medicare, Social Security, Pell grants or highways.

Feeney: If you look at the Ryan budget, there’s more text than numbers — it’s less spreadsheet and more manifesto.

Kramer: It’s technically a budget resolution, a blueprint for spending and revenue priorities, not a binding document. It sets out a vision which the House of Representatives voted on and passed. The House budget resolution has been authored by Paul Ryan for the past several years because he’s the House budget chairman, so it’s been a really rich source of information for us now that he’s the vice presidential pick for Governor Romney. There’s tons and tons of political rhetoric included; the same is true with the president’s budget, although the president, by law, has to include a great deal more detail than the House budget committee does.

As the process is supposed to go, after the House and Senate pass budget resolutions, the appropriations committees go to work actually allocating federal funding to the various programs. So whereas the budget resolution is a very broad stroke, the appropriations committees actually put dollar amounts to every federal program.

Feeney: What happens if the Senate and president refuse Ryan’s budget?

Kramer: While the House has been going about writing these budget resolutions, setting out their priorities for many years hence, the Senate has failed to fulfill that responsibility — they haven’t passed a budget resolution in several years. But that doesn’t mean that the Senate won’t still go about its work appropriating particular levels of funding for particular programs.

Because it’s an election year, neither chamber will pass appropriations bills in the way the federal government used to. What we would expect if it were business as usual — if there is such a thing — is that in the House and Senate each, 12 different subcommittees pertaining to different areas of the federal government would each pass an appropriations bill for their area. At the end of the process, the chambers would go about reconciling their different appropriations bills, ironing out the differences, passing reconciled versions, and sending those to the president to be signed into law. Now, the idea that that would happen this year is laughable; nobody expects that. That’s something that most Americans don’t know — and it’s frankly yet another abdication of responsibility by our lawmakers. So instead of a process in which there’s much review and transparency and opportunity for constituent input, lawmakers will just pass a temporary stop gap called a continuing resolution, which is now becoming business as usual.

Feeney: So there’s been all this media and public scrutiny of the Ryan budget, but in reality the money will be allocated in ways that are mostly under the radar?

Kramer: That’s about right. There’s very little oversight in the continuing resolution process. So there’s all this talk about the president’s budget, the Ryan budget — but the federal government will be funded by continuing resolution well into fiscal 2013.

Feeney: Is there anything regular people can do to make sure that their priorities are heard in this process?

Kramer: There’s a widely held belief among the American public that it doesn’t matter what we do, that Washington’s not listening. But our representatives in Washington do listen when they hear from constituents. It’s when they don’t hear from constituents that they think that we don’t care, and that gives them a blank check to do whatever they want. So we really have a responsibility as citizens in this messy democracy to contact legislators about our priorities for this country — what we think should be done about the Bush era tax rates, whether or not we think Pell grants should be cut, and so on and so forth. If we don’t contact our legislators, then they can vote however they want without feeling beholden to constituent feedback.  I think we forget that by organizing, getting noisy, holding lawmakers accountable for what we believe should be happening in Washington, we really do have the potential to change things.


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