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Sunday, March 24, 2013

Local Congressman’s Decision has Broad Implications

On Thursday, March 21, 2013, Representative Richard Hanna from Barneveld, NY, Republican  representing the 22nd Congressional District in central New York, made the decision to vote YEA on the Paul Ryan Budget Plan for 2014.  As a result, he has finally revealed for all to see, his real intentions and positions.

First, he has joined with 220 other Republicans to give the richest among us special breaks they don’t merit by simply being rich, by being in positions of corporate power, or by their claims to fame.  The richest 1% of Americans -- of which there are about 1.4 million in the nation as a whole-- have been the ones who have prospered through this deep recession because of tax breaks, loopholes, write-offs, and subsidies unknown to the rest of us.  Mr. Hanna has voted in their favor, and thus approved what this budget does for them:

--It reduces the top individual and corporate tax rates to 25 percent. This would give the wealthiest Americans an average tax cut of at least $150,000 a year. The money would come out of programs for the elderly, lower-middle families, and the poor.

--The federal government will be selling a massive portfolio of foreclosed homes owned by HUD, Fannie Mae and Freddie Mac to private investor conglomerates at extraordinarily large discounts to real value.  These properties will only be sold to those that can bring “a billion dollars or more to each transaction” – entities like hedge funds, foreign sovereign wealth funds, or companies like Goldman Sachs.

--Does away with the current seven tax rate system applied to individual taxpayers, which currently ranges from 10% to 39.6%, and replaces that system with only two rates: 10% and 25%. In the past, Ryan has stated that the 10% rate would apply to taxable income less than $100,000, with the 25% rate applying to all income in excess of that threshold. (Tony Nitti on Forbes.com)
The Tax Policy Center has run the numbers and determined the tax savings generated by the Republican plan when compared to current law. The results:
$200,000 – $500,000:     $9,873 average savings
$500,000 – $1,000,000:     $52,000 average savings
> $1,000,000:             $408,000 average savings
$40,000 – $100,000         average savings of approximately $1,000

--Repeals the alternative minimum tax as well as any and all taxes imposed by Obamacare, including the 3.8% tax on a taxpayer’s net investment income, and the tax on certain medical appliances.

--Transitions the international tax regime from the current “deferral” approach to a full territorial system.  Forbes.com explains:  Under a territorial tax system, U.S tax would never be imposed on income earned by a US company’s Foreign branch from non-U.S. sources. The U.S. would simply allow the Foreign Co.’s home country to tax its earnings. When Foreign Co.’s earnings are subsequently repatriated, the dividends would not be subject to U.S taxation.  By eliminating the U.S. tax on repatriated foreign earnings, U.S. companies will no longer have to pay to bring overseas income “home,” thus encouraging investment in the U.S.  But, on the negative side, this “encourages U.S. corporations to shift activities to jurisdictions with lower corporate tax rates, taking jobs and revenue along with them and eroding the U.S. tax base.”  (Tony Nitti of WS&B on Double-Taxation.com).

--The Ryan Budget purports to be revenue neutral (will make up for lost revenue from rate decreases by closing certain tax loopholes).  Unfortunately, the Ryan Budget does not name the loopholes it would close, deferring to the House Ways and Means Committee.  Does this mean that, on top of a substantial rate reduction, the rich might be able to maintain their mortgage interest and state and local tax deductions because of inaction on the part of that Committee?  You might want to count on it. 

-- Would force approval of the Keystone XL pipeline to allow oil to travel from Canada to the Gulf of Mexico. It would also end many of the subsidies for renewable energy companies that were included in the Democrats' stimulus bill. Ryan would promote policies that would favor conventional domestic energy sources including oil, natural gas and coal.  All of which is aimed at enhancing the already enormous profits of the huge energy corporations. (Jon Corrido News)

Millionaire Hanna just couldn’t resist all of these goodies for the rich.  In fact, one would expect him to garner some truly useful campaign money from this vote.  Moreover, Hanna has now shown that any worry or concern he may have had before the vote for vulnerable people in his District -- like DSAS or Rome Lab workers, labor in general, Seniors, women and children, schools, Head Start (which he called a “vital” program) -- all that is seemingly out the window.  Richard Hanna has voted against the middle class, against the poor, against children and young people, against wage earners.  Instead, he has shown himself to be a “party man”, and a person voting in his own favor, not that of his constituents.  He can no longer be considered either an “independent” or “maverick” Republican”.  He cannot even be labeled a “moderate,” unless one calls him an “opportunistic moderate” -- one who votes a moderate position only when it benefits his re-election chances, or his campaign revenue sources.

Those of you who thought Hanna was on his way to deserving these appellations of “moderate“ and “independent,” must now consider that he has fallen into the arms of the radical right-wing, as have so many others of his party.  As an article on Christian Science Monitor online asks: “So what’s the guiding principle here? Pure social Darwinism. Reward the rich and cut off the help to anyone who needs it.  Ryan says too many Americans rely on government benefits. ‘We don’t want to turn the safety net into a hammock that lulls able-bodied people into lives of dependency‘.”

The proof of Hanna’s defection lies in the pudding.  By his YEA vote, here are some examples of what he actually approved for the other 98-99% of us, particularly for those who are most vulnerable.

Ryan’s Plan Threatens the Middle Class. “Each component of the new House Republican budget threatens the middle class while doing nothing to add jobs or grow our economy. It ends the guarantee of decent insurance for senior citizens, breaking Medicare’s bedrock promise. It slashes investments in education, infrastructure, and basic research, all of which are key drivers of economic growth and mobility. And it cuts taxes for those at the top, asking the middle class to pick up the tab. It’s a budget designed to benefit the top 1 percent at everyone else’s expense.” [Center for American Progress]

What the President’s Plan has always contained is a commitment to balanced deficit reduction—which includes both spending cuts and revenue increases—and realistic proposals with numbers that add up.  “Rep. Ryan’s new plan doesn’t come close to fitting that bill. It’s definitely not balanced. Not only would he place the entire burden of deficit reduction on the middle class and the poor but also would actually give the rich additional tax breaks at the same time. And the numbers don’t even add up to real deficit reduction. The tax proposals alone would break the bank, and the spending cuts are unrealistic in the extreme. It’s no wonder that Rep. Ryan didn’t allow the Congressional Budget Office to evaluate the budget’s actual policy proposals.” [Center for American Progress]

Ryan’s Plan Destroys 1.3 Million Jobs in 2013. “Paul Ryan’s latest budget doesn’t just fail to address job creation, it aggressively slows job growth. Against a current policy baseline, the budget cuts discretionary programs by about $120 billion over the next two years and mandatory programs by $284 billion, sucking demand out of the economy when it most needs it and leading to job loss. Using a standard macroeconomic model that is consistent with that used by private- and public-sector forecasters, near-term spending cuts would result in roughly 1.3 million jobs lost in 2013 and 2.8 million jobs lost in 2014, or 4.1 million jobs through 2014.” [Economic Policy Institute]

Ryan’s Plan Cuts Critical Education Programs. “The Department of Education would be cut by more than $115 billion over a decade. 9.6 million students would see their Pell Grants fall by more than $1000 in 2014, and, over the next decade, over one million students would lose support altogether. This would derail bipartisan education reforms and deeply undermine K-12 education and college opportunity.  Roughly two million slots in Head Start would be eliminated over the next decade — cutting 200,000 children from the program in 2014 alone.” [OMB]

Ryan’s Plan Undermines the middle class
Nearly every important element of the Ryan budget proposal would weaken the middle class in America. First and foremost, the plan ends the Medicare guarantee of decent health insurance in retirement. It also slashes critical middle-class investments, such as education and infrastructure by 45 percent and 24 percent, respectively. It includes not a single new measure to help the nearly 13 million unemployed get back into a decent job. And on top of all that, the middle class would end up paying higher taxes as well. [Center for American Progress]

Ryan’s Plan Threatens Health Care Coverage
Many seniors would be forced to pay sharply higher premiums to stay in traditional Medicare and keep their current choice of doctors.
New Medicare beneficiaries could pay more than $1,200 more by 2030 and more than $5,900 more by 2050.
More and more seniors would gradually shift to private health insurance plans over time, increasing the privatization of Medicare.
Hundreds of thousands of seniors would become uninsured.
Premiums would increase for most Medicare beneficiaries.
More than 47 million Americans would lose health insurance coverage in 10 years.
Tens of millions of Americans would lose consumer protections that are essential for health and economic security.
States would be forced to slash Medicaid eligibility, benefits, and payments to health care providers.

But the House budget’s cost-shifting approach would not stop with Medicare. The budget would also shred the safety net for the middle class and the most vulnerable people in our society—jeopardizing the health and economic security of tens of millions more Americans. All told, more than 47 million Americans would lose health insurance coverage in 10 years.

The Ryan budget would repeal affordable health insurance coverage for 33 million Americans under the Affordable Care Act. And the budget would eliminate the new law’s consumer protections, which have already benefited tens of millions of Americans.

The House budget would also transform Medicaid, replacing guaranteed federal funding with block grants to states. This would shift costs to states, which are already under enormous strain. According to the Congressional Budget Office, states would be forced to reduce eligibility, benefits, or payments to health care providers.

Here, from the Center for American Progress, is a review of the likely consequences:

  • In 10 years the block grants alone would reduce enrollment by more than 14 million people, or almost 20 percent (presumably by establishing enrollment caps or waiting lists)
  • To slow the growth in health care costs substantially, states would most likely cut benefits that are not typically covered by private health insurance. Benefits that are critical for people with severe disabilities—such as case management and mental health care—would be at risk. Also at risk would be comprehensive preventive care, screening, and follow-up treatment for children, known as Early Periodic Screening, Diagnostic, and Treatment, or EPSDT.
  • States would likely increase premiums and cost-sharing substantially—limiting access to needed care for the most vulnerable people in our society.
  • Since payment rates under Medicaid are already low and inadequate in many cases, health care providers may not be willing to accept even lower payment rates. 
  • In 10 years the House Republican budget could reduce payments to hospitals by more than $84 billion each year, or 38 percent. Hospitals would receive much less revenue as a result of reductions in payments, benefits, or eligibility. At the same time, the loss of coverage and benefits would increase the cost of uncompensated care substantially, placing an enormous burden on hospitals.
  • All told, the House budget would cut Medicaid by more than $1.4 trillion over 10 years. But these cuts would not go toward deficit reduction. Rather, they would largely pay for expensive tax cuts. In essence the House budget seeks a massive transfer from the middle class and the most vulnerable in our society to high-income individuals.

Under the Ryan Plan, billions of meals would be missed by struggling families amid deep job losses in food-related industries
According to americanprogress.org, the House budget proposes to give states “more flexibility” in how they administer the Supplemental Nutrition Assistance Program, or SNAP, which ensures millions of Americans do not go hungry. What this really means is deep cuts to this effective program, which would inhibit its ability to respond during times of recession and would likely mean cuts to eligibility and benefits.  Under the House budget proposal, millions of people could be kicked off the nutrition assistance that stands between them and hunger, or could see their benefit set so low that it would be difficult to afford three meals a day, causing great harm because 76 percent of SNAP households included a child, elderly person, or disabled person.

Cuts to supplemental nutrition assistance hurt more than struggling families. Small businesses, including grocers and retailers who benefit from community members using these benefits to buy food for their families, would see fewer customers coming through their doors. If divided evenly over 10 years, an annual $13.4 billion cut would result in as many as 8.2 billion meals lost and 184,000 jobs lost in just one year.

The Ryan Budget would continue non-war defense spending at the expense of caring for our returning veterans
The House budget’s cuts in supplemental nutrition assistance, for example, could affect veterans and military families since $31 million of this funding in the last year for which complete data are available, was spent at military commissaries to help feed military members and their families who struggle against hunger.

The House budget will squeeze other domestic safety net programs that serve veterans and non-veterans alike. For example, a veteran lives in one in five households benefiting from the Low Income Home Energy Assistance Program, which provides heating and cooling assistance, and 1.2 million veterans used mental health services in 2010.
Yet the Ryan budget leaves the non-war defense budget untouched -- even with $70 billion in cost over-runs -- caused by management failures in the Department of Defense military contracts from the past two years alone. We could easily reduce the unprecedented level of baseline defense spending and invest in growing our middle class, without undermining our national security. But the House budget does the opposite.

The American people need to recognize the consequence of enacting the House budget plan in the coming fiscal year: it will tilt our economy even further in favor of the wealthy at the expense of broad-based economic prosperity for the middle-class and lower income Americans.  Representative Hanna has come down on the side of those who believe austerity is the way to reduce spending, in spite of the horrific consequences for those who need a helping hand or a short-term rescue or an opportunity to get back on their feet.  Like it or not, Government programs are an essential part of our economy, as are government jobs.  Apparently, Mr. Hanna does not see it that way.

Congressman Hanna has abandoned his constituents, and the time is fast approaching (2014) for them to abandon him!