Attention Democrats: Don't Be Fooled, Bowles-Simpson Plan=Ryan Budget-Lite
April 13, 2011 - 1:13pm ET
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Liberals don't like the prospect of the Bowles-Simpson plan becoming the starting point of deficit reduction talks, because it is too centrist to offer Democrats a strong bargaining hand. But if you look more closely, it's far worse than that. Bowles-Simpson is Ryan-lite.
Their plans fit together like two pieces of a jigsaw puzzle. Where one skirts the specifics, the other fills in. Bowles-Simpson would cap health care costs but proposes few specific ways of doing it. Ryan fills in the specifics with his plan to voucherize Medicare and block-grant Medicaid.
On Social Security, Bowles-Simpson have a very detailed, very unbalanced, and very regressive plan. Contrary to the hopeful spin of some liberal bloggers, who claim it would at least increase benefits for the poor, their Social Security reforms would cut benefits for 60% of the very poorest workers. Click here, here, or here for a complete breakdown of their plan.
Ryan sidesteps specific Social Security proposals, showering praise on Bowles-Simpson instead, claiming them as a model for Social Security "reform." It's as if Bowles and Simpson saved him the trouble of having to do it himself.
In turn, Bowles and Simpson had some kind words about Ryan to say themselves. They called his budget "a serious, honest, straightforward approach to addressing our nation's enormous fiscal challenges," and specifically praised him for including a "process for Social Security reform in his budget to set the program on sound footing." Their minor, slap-on-the-wrist caveat that he should have offered more revenue increases is buried at the bottom of their press release praising him. The implication is, "It's not ideal, but we'd live with it."
The remaining features of the Bowles-Simpson plan recommendations that supposedly make it more "balanced" than Ryan's budget are either so paltry as to be laughable, rely on pure political fantasy, or would fall disproportionately on the middle class.
• Laughable defense cuts: They recommend a little more than $100 billion in cuts in defense spending over ten years. Gates already has implemented $100 billion in cuts. They come nowhere near close to Barney Frank and Ron Paul's nearly $1 trillion in cuts.
• Reagan-style tax reform: They'd reduce income tax rates and make up the difference by closing loopholes. This is the same logic Reagan used to cut taxes in the mid-80s: "Flatten the rates, broaden the base." It resulted in net revenue decreases, because wealthy individuals and corporations sent armies of tax lawyers to create new loopholes and defend existing ones. What reason do we have to think it would work differently now? Maybe the milquetoast nature of the tax proposals is why guys like Tom Coburn signed on to begin with. Explaining his vote for the plan, Coburn called the tax part of the Bowles-Simpson plan, "Reagan on steroids"
• Middle class tax hikes: For example, revoking the mortgage interest deduction, and raising taxes on gasoline, while good policy, would fall on middle class homeowners and consumers at a time when they are already unprecedented financial stress.
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