What is more important than debt, deficit, and tax reduction?

By Fr. Fred Kammer, SJ

This month, the Republicans in the U.S. House of representatives have passed their budget resolution (the Ryan plan, named for Chairman Paul Ryan of the House Budget Committee) for the next federal fiscal year; it is meant to serve as a framework for actual spending bills in the coming months.  It is touted as debt and deficit reduction—all from cutting domestic programs like Medicare and Medicaid—and it has trillions of dollars of tax reductions over the next ten years.

President Obama has released his own budget framework for the coming year and decade.  His plan contains trillions of dollars of debt reduction that includes two-thirds to three-fourths from budget cuts, including defense, and one-third to one-fourth from tax increases.  This is similar to the plan of his fiscal commission (the Bowles-Simpson plan).

There is also the plan issued last fall from the bipartisan  fiscal commission chaired by former Senate Budget Committee Chairman Pete Dominici and former Clinton White House Budget Office and CBO Director Alice Rivlin (the Dominici-Rivlin plan) that would accomplish debt and deficit reduction by one-half budget cuts and one-half increased revenues.

So much for dueling budget proposals.  How are people of faith to look at these?  What is a moral framework for our evaluation and our political responses?

On April 13, 2011, the chairmen of the Committee on Domestic Justice and Human Development and the Committee on International Justice and Peace of the U.S. Conference of Catholic Bishops offered their response in a letter to members of the U.S. House:

As Catholic bishops, we lead a community that brings both moral principles and everyday experience to this discussion.  We defend the unborn, feed the hungry, shelter the homeless, educate the young, welcome refugees, and care for the sick, both at home and abroad. As teachers, we offer several moral criteria to help guide difficult budgetary decisions:

1. Every budget decision should be assessed by whether it protects or threatens human life and dignity.
2. A central moral measure of any budget proposal is how it affects “the least of these” (Matthew 25). The needs of those who are hungry and homeless, without work or in poverty should come first.
3. Government and other institutions have a shared responsibility to promote the common good of all, especially ordinary workers and families who struggle to live in dignity in difficult economic times.

We will also apply these principles and experience to assess the proposals of the President and the Senate as the debate continues. A just framework for future budgets cannot rely on disproportionate cuts in essential services to poor persons. It requires shared sacrifice by all, including raising adequate revenues, eliminating unnecessary military and other spending, and addressing the long-term costs of health insurance and retirement programs fairly. ¹

Within this moral framework, the bishops note the following concerns they have with Chairman Ryan’s proposed budget framework, approved subsequently by the House:

• Changes to Medicare and Medicaid could leave more elderly and poor people without adequate and affordable health care. [The bipartisan Congressional Budget Office calculates that the Ryan plan would double the out-of-pocket health care costs of a typical elderly person by substituting for Medicare a “voucher” for people turning 65 in 2022 and afterwards to buy private insurance.]
• Turning Medicaid into a block grant could leave states and the poor with inadequate resources to meet health costs.
• The human and social costs of substantial cuts to programs serving families working to escape poverty, food and nutrition programs, child development, education, and affordable housing.
• Massive cuts to the foreign operations budget could devastate poverty-focused international assistance.

The Ryan plan, while making $4.3 billion in “real cuts” in U.S. spending, then proposes $4.2 billion dollars in tax cuts, thus producing only $155 billion dollars in deficit savings over the next ten years. ²  The Ryan plan, according to the CBO, does not actually balance the federal budget and create any budget surplus until the year 2040. ³  In effect, the national debt continues to climb for the next thirty years.

So, if it is not deficit and debt reduction, what are the real goals of the Ryan plan, now the House plan?

It would seem that the Ryan plan provides a veritable gumbo of long-term conservative wishes: privatizing Medicare by forcing the elderly to buy insurance on the open market; gutting Medicaid by cost-shifting to the states and reducing funding; cutting taxes for wealthy individuals and corporations; and, by an overall growth cap, driving the size of government back to 1950s levels (as a percentage of GDP) and savaging programs for education, veterans, job training, health, environmental protection, transportation, housing, Head Start, financial regulation, research and development, and everything else except Social Security and defense.  Along the way it would likely mean the loss of 3.1 million full-time equivalent (FTE) jobs in the next few years. ⁴  The audacity is stunning.

1. Most Reverend Stephen E. Blaire, Bishop of Stockton, Chairman of the Committee on Domestic Justice and Human Development and Most Reverend Howard J. Hubbard, Bishop of Albany, Chairman of the Committee on International Justice and Peace, U.S. Conference of Catholic Bishops, April 13, 2011 letter to the members of the U.S. House of Representatives, http://www.usccb.org/sdwp/2012-Budget-Letter-to-House-04-13-11.pdf (accessed on April 18, 2011).

2. Ryan claims to produce $1.6 trillion dollars of deficit savings, but includes in this number $1.3 trillion dollars of what he earlier termed “phantom savings” (the reduced spending associated with the already planned troop draw-downs in Iraq and Afghanistan). Cf. “Ryan Budget Plan Produces Far Less Real Deficit Cutting Than Reported,” Center on Budget and Policy Priorities,” April 8, 2011 at http://www.cbpp.org/files/4-8-11bud.pdf (accessed April 18, 2011).

3. “Long-Term Analysis of a Budget Proposal by Chairman Ryan,” Congressional Budget Office, April 5, 2011, p. 15, http://www.cbo.gov/doc.cfm?index=12128 (accessed April 18, 2011).

4. “All Would Suffer from Chairman Ryan’s Budget Cuts,” Ethan Pollack and Andrew Fieldhouse, Policy Memorandum, Economic Policy Institute, April 13, 2011 at http://www.epi.org/publications/entry/PM181 (accessed April 18, 2011).