For Immediate Release: Thursday, May 17, 2012
Contact: Phoebe Silag or Karen Conner, news@epi.org 202-775-8810
New EPI-Century Foundation report contrasts Ryan budget with Budget for All
Two competing federal budget proposals—House Budget Committee Chair Paul Ryan’s fiscal 2013 budget resolution and the Budget for All proposed by the Congressional Progressive Caucus (CPC)—present diametrically opposed prescriptions for our most pressing economic challenges, according to a new briefing paper, The Ryan budget versus the Budget for All: Exacerbating versus alleviating our serious economic challenges, released today by the Economic Policy Institute and The Century Foundation. The Economic Policy Institute Policy Center provided technical assistance in developing, scoring and modeling the Budget for All, though the policies in the Budget for All reflect the decisions of the CPC leadership and staff, not those of the EPI Policy Center or EPI.
The Ryan budget versus the Budget for All contrasts the Ryan budget with the Budget for All on the issues of spurring recovery, improving health care costs and coverage, increasing economic opportunity, and realistically funding spending priorities. The Budget for All would increase employment by 2.1 million jobs in fiscal 2013 and 1.2 million in fiscal 2014 by financing $786 billion worth of investments and job creation measures over the next two-and-a-half years, while also sustaining increased public investments over the next decade. The Budget for All proposed financing the CPC’s priorities by gradually rolling back the Bush-era tax cuts, adding higher tax rates for millionaires and billionaires, and fairly taxing capital gains, all of which would push back against growing economic inequality.
“This week, Chairman Ryan presented his budget as a serious plan to restore economic growth and lower long-term deficits at the third annual Peterson Foundation Fiscal Summit. Any economic or fiscal credibility of the Ryan budget is belied by trillions of dollars of additional unfinanced tax cuts targeted toward upper-income households,” said co-author Andrew Fieldhouse, a federal budget policy analyst for the Economic Policy Institute and The Century Foundation. “Doubling down on last decade’s failed supply-side experiment will only swell deficits and aggravate inequality without accelerating growth.”
The report concludes that the Ryan budget would reduce employment by 1.3 million jobs in fiscal 2013 and 2.8 million in fiscal 2014. The Ryan budget would also cut Medicaid and other health programs by $2.4 trillion over a decade, shifting costs to households while exacerbating overall expenditure. It would further cut education, workforce training, child nutrition programs, scientific research and the basic operations of government.
“The proposed austerity measures and draconian cuts within the Ryan budget would stall economic growth and ask the most from those least able to afford it,” said co-author Rebecca Thiess, an EPI federal budget policy analyst. It stands in stark contrast with the vision presented in the Budget for All, one that is focused on lifting the middle class, protecting the social safety net, and promoting economic growth and shared prosperity.
Here are the key differences between the Ryan budget and the Budget for All in a side-by-side comparison chart:
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Ryan budget |
Budget for All |
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Job creation and economic recovery: |
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| By decreasing near-term aggregate demand, the Ryan budget would reduce employment by 1.3 million jobs in fiscal 2013 and 2.8 million in fiscal 2014. | In contrast, by increasing near-term aggregate demand, the Budget for All would increase employment by 2.1 million jobs in fiscal 2013 and 1.2 million in fiscal 2014. |
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Discretionary spending priorities and public investments: |
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| The Ryan budget would ramp up defense spending despite wars ending in Iraq and Afghanistan, while slashing nondefense discretionary spending (NDD). | In contrast, the Budget for All recognizes the economic imperative for public investment and would take advantage of the opportunities afforded by the ending of wars in Iraq and Afghanistan to reorient discretionary spending toward high-return investments. |
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Economic security and opportunity: |
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| The Ryan budget would cut deeply into the social safety net and scale back tax credits for lower-income households, while calling for steep reductions in tax rates for upper-income households. | In contrast, the Budget for All would protect the social safety net that has been vital to so many since the Great Recession began, while also targeting tax cuts toward low- and middle-income families. |
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Health care costs and coverage: |
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| The provisions in the Ryan budget regarding health security ignore the reality that, in the absence of social insurance, market failures will keep the private sector from ever adequately covering large portions of the population. | The Budget for All, conversely, recognizes the value of existing health security programs and also realizes that even more must be done to ensure health security for all Americans and to use government purchasing power to slow national health expenditure growth. |
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Tax policy: |
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| The Ryan budget would maintain all of the Bush-era tax cuts and would even expand them for most households, while offering an implausibly large offsetting revenue gain from broadening the tax base (via eliminating unspecified tax expenditures). | In contrast, the Budget for All honestly determines what is needed to fund its spending priorities and aims to finance these needs by raising revenue from those households that have the highest incomes and have captured most of the overall income gains generated in recent decades. |