This week vice presidential nominee Paul Ryan promotes his budget plan around the country.
The Romney-Ryan budget promises to reduce the national debt while also both consolidating and lowering existing individual income tax rates from six brackets into 10 and 25 percent categories. The plan offsets these cuts by increasing the age at which Americans receive Social Security benefits (to age 67, in 2023), repealing the Affordable Care Act and decreasing funding for non-defense discretionary spending (NDD) by $1.7 trillion over a 10-year period. The significant cuts in this category primarily focus on removing anti-poverty initiatives from the federal budget and shifting these services to states. (These programs include food stamps, Pell grants and Medicaid, among others.)
Ideological perspectives on the Ryan budget vary.
Socially liberal voices protest the defunding of anti-poverty programs, while fiscal conservatives see cuts as necessary to avert a debt crisis. The word “crisis” belies the reality that no proposed budget from either party balances the budget in any short-term sense, and Ryan’s plan includes increases in defense spending and decreases in federal revenue (e.g. tax cuts).
This is not to imply that the national debt is not a serious issue, but rather that the rhetoric surrounding potential cuts in the budget often serves political agendas beyond the scope of the American economy. Confrontations over the national debt inherently become ideological after a collective realization that debt levels must decrease, as party platforms dictate what gets cut from the budget.
What happens if Ryan’s plan becomes law? Regardless of ideological perspective, the role of the state in anti-poverty programs changes.
This budget reduces federal funding of Medicaid from $628 billion to $332 billion and phases out food stamps by 2016 (These numbers, as well as those in the preceding paragraph, come from the Congressional Budget Office). A decrease of this level greatly reduces Medicaid funding in Mississippi.
In 2007 the state received 83 percent of its Medicaid funding from the federal government. That translates into $3.3 billion of almost $4 billion spent. Without this federal funding, the state either reduces the number of people participating in the program or the benefits they receive, or raises the funds in another manner (higher taxes or the defunding of other programs). The plan defunds more than just Medicaid, and Mississippi will face serious budget shortfalls without increases in revenue. Taxpayers will either see their lower federal tax rates replaced with higher state taxes (unlikely, given the traditionally conservative nature of the state) or see losses of once-federally funded services.
This dilemma points to an issue left largely unaddressed by either party: poverty.
The services Ryan plans to cut affect people both disregarded in this election cycle and often more generally disenfranchised at the voting booth. One in six Americans live below the poverty line, and in Mississippi this statistic increases to one in five. Romney-Ryan supporters argue that maintaining these federal programs at the expense of potentially lower tax rates perpetuates cyclical poverty, but the fact remains that their tax plan is unproven, and there are people who don’t have jobs and can’t afford to buy food. Suggesting that such programs exacerbate joblessness without acknowledging the pervasive joblessness in America exhibits a denial of reality, and a plan to reduce funding to crucial federally provided services simply shifts the burden to the states most unprepared to handle budget shortfalls.
From a political perspective, Romney and Obama’s aversion to a frank assessment of poverty is understandable, but as voters, we should characterize this aversion as unacceptable. Obama puts programs in place to help low-income people, yet omits these successes in speeches leading up to the general election. Romney assumes that his lower tax rates will alleviate the issue, but a tenuous promise of eventual improvement does little for those receiving the benefits he hopes to eliminate.
Meghan Holmes is a second-year graduate Southern studies student from Arab, Alabama. You can follow her @styrofoamcup.
