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Republican 2012 Budget Plan Kills Jobs

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By Mike Hall

The closer we examine the House Republican budget plan for 2012 put together by Rep. Paul Ryan’s (R-Wis.), the worse it looks. Two new analyses show not only would Ryan’s plan to cut Medicaid cost 2 million mostly private-sector jobs, but—and this is scary—if the nation follow Ryan’s budget roadmap, the federal government would nearly vanish by 2050.

The Ryan budget plan, says Center on Budget and Policy Priorities (CBPP) President Robert Greenstein,

specifies a long-term spending path that means that, by 2050, most of the federal government aside from Social Security, health care, and defense would literally cease to exist, according to figures in a Congressional Budget Office (CBO) report.

He writes that the CBO report says that Ryan’s plan would shrink federal spending to its lowest level since 1951. It gets a little wonky from here, but bear with us.

Except for spending on Medicare, Medicaid (both due for big cuts), Social Security and debt interest, the Republican budget says all other federal spending such as education, infrastructure, law enforcement, job creation, workplace safety, and everything else including defense spending would be just 3.5 percent of the Gross Domestic Product (GDP).

The CBO report says since 1940, defense spending has equaled or exceeded 3 percent of GDP. The Ryan budget does not cut defense spending in any significant way. What’s left after defense spending?  Do the math.  Says Greenstein:

Assuming defense spending remained level in real terms, most of the rest of the federal government outside of health care, Social Security, and defense would cease to exist.

Grover Norquist, the anti-government, anti-tax extremist and Republican strategist said in 2001:

I don’t want to abolish government. I simply want to reduce it to the size where I can drag it into the bathroom and drown it in the bathtub.

Says Greenstein:

The CBO report suggests…Ryan has much the same vision.

Click here for his full report.

Taking a look at the Republican budget and Medicaid, Economic Policy Institute (EPI) senior policy analyst Ethan Pollack finds that Ryan’s plan to block grant Medicaid has a cascading effect that eventually would cost more 2 million mostly private-sector jobs.

A block grant means the federal government would give the states a fixed amount of money each year instead of the current Medicaid system, picking up a 50 percent of the total cost. Medicaid provides health care for children, low-income adults, people with disabilities and about 60 percent of seniors in nursing homes. Says Pollack:

Because these grants would grow more slowly than the expected inflation rate for health care costs, this proposal would have the federal government shift an increasing amount of the coverage costs onto states, who will be in turn forced to cut health benefits and other services, cut public investments such as education and transportation, or raise taxes.

On top of those harmful results, he also says the Republican Medicaid cuts “would have a significant jobs impact.”

During the next five years the Ryan Medicaid proposals would cut $207 billion from Medicaid to the states and using a widely accepted economic models, Pollack says that  translates into about 2.1 million mostly private sector jobs during those five years. He adds that is a conservative estimate.

With more than 24 million workers either jobless or underemployed, the Republican Medicaid plan is bad medicine for the economy, says Pollack

In terms of simple joblessness, we are 11.1 million jobs short of pre-recession unemployment levels after factoring in population growth.  Getting back to those levels in three years would require that the economy add 400,000 each month—almost twice the amount added last month—for the next 36 months straight. Congress should act now to create jobs, not drive the economy even further into a ditch by slashing basic health care access to children, the elderly and the disabled.

Click here for his full analysis.


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