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Radical Right Roadmap Emerges for Privatizing Entitlements

January 24, 2011

I reported on this hot topic last month. Now today the Republican plan has emerged for privatizing Social Security and eliminating major entitlement programs. As I have stated, if we had tied Social Security to the financial markets in 2008, Social Security would have been severely impacted. Millions of Americans would have suffered economic calamity. These are rich, white men scheming to further exploit America’s sick, elderly and poor who rely on these programs for income and care. It is another shameful act by Republicans. If you are considering relying on any of these programs in the future, get active, contact your representatives. As reported here, the number one cause of all personal bankruptcies is due to medical debt. Medicare and Medicaid are necessary programs to support Americans when their assets have run out. I know, my mom an honest thrifty woman who was a bookkeeper, had spent down her savings until she was broke. Then I had to place her in a nursing home last year under Medi-Cal ( Medicaid in California).

Think people! You live long enough and you will get old and frail and ill. With 47 million Americans below the poverty line, another 46 million middle class Americans who cannot afford health insurance, and another 26 million Americans who are unemployed or underemployed, Social Security, Medicare, and Medicaid are their only sources of support.

PRIVATIZING ENTITLEMENTS: Rep. Paul Ryan (WI), chairman of the House Budget Committee, Roadmap puts Americans on the path of privatizing entitlement programs, such as Social Security. The plan boasts about “the creation of personal investment accounts for future retirees” that are “the property of the individual.” (Emphasis in the original document). “Individuals will be able to join the investor class for the first time,” the Roadmap says. The Center on Budget and Policy Priorities (CBPP) notes that “the Ryan plan proposes large cuts in Social Security benefits — roughly 16 percent for the average new retiree in 2050 and 28 percent in 2080 from price indexing alone.” It “initially diverts most of these savings to help fund private accounts rather than to restore Social Security solvency.” CBPP also notes that the Roadmap “would eliminate traditional Medicare, most of Medicaid, and all of the Children’s Health Insurance Program” by creating a private voucher system that won’t keep up with the cost of health care. By 2080, under Ryan’s plan, the Medicare program would be reduced by nearly 80 percent below its projected size under current policies. CBPP summed up Ryan’s plan: The Roadmap’s cuts “would be so severe that CBO estimates they would shrink total federal expenditures (other than on interest payments) from roughly 19 percent of GDP in recent years to just 13.8 percent of GDP by 2080. Federal spending has not equaled such a low level of GDP since 1950, when Medicare and Medicaid did not yet exist, Social Security failed to cover many workers, and close to half of the elderly people in the United States lived below the poverty line.”

MIDDLE CLASS TAX INCREASES: Citizens for Tax Justice found that Ryan’s Roadmap would raise taxes on 90 percent of taxpayers and drastically lower them for the richest Americans. The Economic Policy Institute (EPI) recently reported that the rates for the middle class would be higher than those for the rich under Ryan’s plan. “Middle-class families earning between $50,000 and $75,000 a year would see their average tax rate jump to 19.1% (from 17.7%) under this plan — an increase of $900 on average,” EPI says, while at the same time, “Millionaires would see their average tax rate drop to 12.8%, less than half of what they would pay relative to current policy.” As EPI’s Andrew Fieldhouse concluded, under the Roadmap, “a long tradition of progressive taxation would be abandoned; millionaires and Wall Street bankers would pay significantly lower tax rates than middle-class workers. … Income inequality would soar.” In another giveaway to the rich, the Roadmap calls for a total repeal of the estate and corporate taxes and would introduce a national sales tax. Citizens for Tax Justice (CTJ) said this idea “would eat up a much larger percentage of total income for poor and middle-class families than wealthy families” because the former “spend most or all of their income on consumption,” while “high-income families are able to save much more of their income.” Ryan’s plan claims federal tax revenue will be 19 percent of GDP, but the Tax Policy Center found last year that his proposal would only bring in “approximately 16 percent of GDP, which amounts to a $4 trillion revenue shortfall over ten years.”

Source: Center for American Progress, Progress Report, January 24, 2011

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