There has been a lot of attention this week on the possibility of a shut-down of the US government because of deep political divisions over budget cuts. And it did seem that the final bargaining appeared to be more about ideological issues than about monetary cuts.
However, this battle is a mere skirmish compared to what is likely to occur, if the next Republican Budget plan is any guide. This (Ryan) plan proposes:
$4.3 trillion in spending cuts over the next 10 years.
The enormous cuts do essentially nothing to balance the budget: 98% of the proposed savings from spending cuts go to finance new tax cuts.
For good measure the Republican plan also repeals the Dodd-Frank reform of financial regulations, passed (July 2010) after the recent GFC meltdown.
However, this battle is a mere skirmish compared to what is likely to occur, if the next Republican Budget plan is any guide. This (Ryan) plan proposes:
$4.3 trillion in spending cuts over the next 10 years.
Two-thirds of these cuts come from programmes aimed at low-income Americans: Medicaid, food stamps, grants for low-income students etc. [Medicaid cuts of $771 billion, $1.4 trillion from repealing the health reform law's Medicaid expansion and its subsidies to help low-income people purchase health insurance etc]
$4.2 trillion proposed in new tax cuts
The top rate goes from 35% (under Bush) down to 25%, lower than at any time post New Deal.The enormous cuts do essentially nothing to balance the budget: 98% of the proposed savings from spending cuts go to finance new tax cuts.
For good measure the Republican plan also repeals the Dodd-Frank reform of financial regulations, passed (July 2010) after the recent GFC meltdown.
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