Washington – Today, U.S. Representative Gary Peters voted against the Republican Budget proposed by Budget Chairman Paul Ryan because of his grave concerns over how this budget would end the guaranteed benefit of Medicare and force Michigan’s seniors to pay thousands more for their health care. 

Peters urged Congress to instead work together to develop bipartisan budget compromises that focus on responsibly reducing the deficit while growing our economy, investing in small businesses and our middle class and protecting Medicare and Social Security.  

Peters said, “In order to grow Michigan's and our nation's economy, we need to invest in our middle class and small businesses, responsibly reduce the deficit and ensure that people can retire with dignity.  I have serious concerns about the partisan Ryan Budget proposal because it would seriously undermine guaranteed benefits that seniors and middle class families have paid into and earned - all while doling out new tax breaks to special interests like oil companies or companies that outsource good paying jobs."

Peters, the author of the Congressional Oversight to Start Taxpayer Savings (COSTS) Resolution, urged for more accountability in the budget process:

"Middle class families in Michigan and across the country want Washington to face the challenges that they face every day and ensure that there is proper accountability for their hard-earned tax dollars. I am proud to have introduced legislation that would improve accountability in government spending, but too many of today’s proposed budgets fall short on this priority. We must come together and find practical, common sense solutions that can help create jobs, responsibly reduce the deficit and still ensure that Medicare is protected for our seniors."

Peters supported a middle class budget introduced by Rep. Van Hollen that preserves Medicare, closes special interest tax loopholes while giving tax breaks to middle class families and invests in education, small businesses and infrastructure. This budget also raises the minimum wage, extends unemployment insurance, supports equal pay for women and invests in veteran’s job training.

The following is an overview of the Republican budget:

Medicare/Seniors

·         Ends the Medicare Guarantee.   The Republican budget ends the Medicare guarantee – fundamentally transforming Medicare from a guaranteed benefit program into a privatized voucher program.  Under this program, rather than having guaranteed coverage of benefits, seniors would receive a voucher and would need to use that voucher to purchase private insurance, or supposedly, traditional Medicare.

·         Higher Premiums Charged for Traditional Medicare.   The Republican budget increases seniors’ health care costs.  According to CBO projections, the GOP plan would raise premiums for traditional Medicare by 50 percent on average.

·         Traditional Medicare Will Wither On the Vine. As AARP pointed out in 2012 when Republicans had a similar plan to end the Medicare guarantee, “The premium support method described in this proposal … would likely ‘price out’ traditional Medicare as a viable option, thus rendering the choice of traditional Medicare as a false promise.  The proposal also leaves open the possibility for private plans to tailor their plans to healthy beneficiaries – again putting traditional Medicare at risk.”

·         Increases Seniors’ Rx Drug Costs.   The Republican budget increases seniors’ prescription drugs costs by re-opening the Medicare Part D ‘donut hole.’  The budget does this by repealing the Affordable Care Act.  Since the enactment of the ACA, 7.9 million people with Medicare have saved over $9.9 billion on their Rx drugs.  By re-opening the ‘donut hole,’ the GOP budget raises Rx drug costs for seniors in the ‘donut hole’ by nearly $1,200 a year on average.   

·         Increases Seniors’ Costs for Preventive Care.   The Republican budget also makes seniors pay more for key preventive health services, by repealing the Affordable Care Act. The ACA eliminated cost-sharing for vital preventive services, such as cancer screenings.  In 2013, an estimated 37.2 million people with Medicare took advantage of at least one preventive service with no cost sharing, thanks to the ACA.

Tax Breaks for the Wealthy & Special Interests : 

·         Worse than The Romney Tax Plan.   Showers the wealthiest Americans with more huge tax cuts – averaging at least $200,000 for millionaires -- even if GOP tax reform greatly reduces tax preferences for the wealthy.  [ Citizens for Tax Justice ] 

o    Aims to lower the tax rate for individuals at the top from 39.6% to 25% -- replacing the current tax brackets with just two brackets: 10% and 25% with no details on how Republicans would pay for these additional tax cuts.

·         Middle Class to Foot the Bill.   Could raise taxes on middle class families with children by an average of at least $2,000 per year. [OMB ]

·         Or Increase the Deficit.   The Republican tax plan costs $5 trillion, and the GOP budget does not offer any specifics on a plan to close tax loopholes.  Regarding last year’s very similar plan, the Tax Policy Center said “it is hard to imagine” a plan to close tax loopholes that would be sufficiently large so that GOP tax cuts for the wealthy do not add to the deficit or force tax increases hitting the middle class. [Tax Policy Center ]

·         Corporations Shipping Jobs Overseas.   Cuts the top corporate tax rate to 25% from 35% -- or an over $1 trillion corporate tax cut-- and cuts taxes for companies moving jobs overseas (through the shift to a territorial system).

·         Fails to Offer Specific Tax Loopholes to Close.   Refuses to specify even a single tax loophole they will close – not for Big Oil, corporate jets, etc. – in order to reduce the deficit or pay for new tax cuts for the wealthy.  Tax breaks for Big Oil will continue even as the top five Big Oil companies took in $1 trillion in profits over the last decade.

Education 

·         The Ryan Republican Budget makes huge cuts in domestic programs but refuses to make public where they fall.   But it is clear that the budget will result in dramatically severe cuts in elementary and secondary education programs , such as Head Start, Title I aid for disadvantaged students, and IDEA (Individuals with Disabilities Education Act) funding, unless they make even larger cuts in other areas.       

o    Early Learning.   Endangers early learning for children, rejecting the President’s early learning initiative, cutting Head Start to throw off 170,000 children from a good start to a brighter future if cuts are applied across the board in FY 2016, and potentially slashing early childhood education by $19 billion over 10 years compared to current services . [OMB, Budget Committee]  Study after study show that funding early child developments pay dividends for children, families, and their communities – up to $17.60 for every dollar spent.

o    Extra Math and Reading Help.   Threatens Title 1 with cuts that rob 8,000 schools and 3.4 million disadvantaged students from the extra academic support they need to succeed, if domestic cuts are applied across the board in FY 2016, potentially reaching $35 billion over 10 years compared to current services.  The 2016 cuts could result in 29,000 fewer teachers and aides to help these students.  [OMB, Budget Committee]

o    o   Special Education/IDEA.  Schools across the country will lose funding that supports 21,000 special education teachers if cuts are applied across the board in FY 2016, with cuts potentially reaching $28 billion over 10 years compared to current services. [OMB, Budget Committee]

·         Slashes college student aid and support by a total of $260 billion below current policy over the next 10 years, making college less affordable for the millions of students who rely on Pell grants, federal student loans, and higher education tax credits.

o    Cuts Pell Grants, the foundation of federal college aid for 10 million students, by $145 billion over 10 years.   The Ryan Republican budget will slash Pell Grants, eliminating all guaranteed funding, along with huge cuts in domestic investments that are not identified.  The budget also freezes the maximum Pell Grant at the current $5,730 level for the next 10 years as college costs climb.  These grants currently cover only one-third of the cost of attending a four-year public college, and would drop to 20 percent of the cost of college in 2024, under the Ryan budget. The budget would also eliminate Pell Grants for students attending college less than half time, many of whom are working to put themselves through college. 

o    Increases the Cost of College Loans.  Makes college more expensive for needy students by charging interest on their loans while they are still in college.  This will raise the cost of student loans by $41 billion over ten years or an average of $3,800 per student borrowing the maximum starting with the 2014–2015 academic year.

o    Increases Student Loan Debt.  At a time when student loan debt totals more than $1 trillion, the Republican budget eliminates $7 billion in student loan repayment benefits that cap borrowers’ monthly student-loan bills as a percentage of their income.

o    Higher Education Tax Cuts Expire.  Lets the tax credit that helps defray college costs for 11.5 million working- and middle-class students each year expire, raising the cost of college by $67 billion.

Costs Jobs , Jeopardizes Economic Security, Undermines Women & Harms Our Economic Future :  

·         Destroys 3 Million Jobs

o    Cuts in key investments to rebuild America and strengthen our competitiveness and economic future would cost three million American jobs in FY 2016, decrease GDP by 2.5 percent, and stall our nation’s recovery.  [EPI ]

o    CBO   confirms that the Ryan Republican plan would slow the economy over the next three years.

·         Rebuilding America – Transportation  

o    Guts investment in America’s highways, railways, transit systems, and ports despite the serious need to rebuild America and put people back to work – with $52 billion in cuts in the next year alone. 

o    At a time when our roads are in disrepair, one in 9 bridges is structurally deficient, the American Society of Civil Engineers gives our infrastructure a D+, and traffic congestion costs the U.S. economy $120 billion annually, these cuts will stifle our ability to maintain and modernize our infrastructure, costing construction jobs now and reducing future economic growth.

o    Every $1 billion in infrastructure spending creates nearly 35,000 jobs.

§    “Ryan’s budget plan will not … build and maintain the nation’s 21st century transportation system.  The significant cuts he [Ryan] is proposing will hamper investments in safety, further delay needed bridge improvements and hamper mobility in and around congested urban areas.”  AAA VP of Public Affairs, Kathleen Bower

·         Job Training and Veterans

o    Leaves 3.5 million American workers without critical job training services they need to get a job and get ahead if cuts are applied across the board in FY 2016.

o    “The National Skill Coalition strongly opposes efforts to further reduce federal investments in job training and postsecondary education. This proposal’s disinvestment in America’s workforce… makes it more difficult for those most in need to get the skills to obtain a job or advance at work.”

o    Puts veterans’ health care at risk of $146 billion in cuts over 10 years due to low overall non-defense discretionary funding levels, with $1.7 billion in cuts below the President in FY 2016, while also rejecting the proposed Veterans Job Corps and efforts to protect all veterans funding (such as claims processing) from government shutdowns.

·         Science , Research, Clean Energy, and Agriculture 

o    The American Association for the Advancement of Science noted that the budget “would likely result in deep cuts to non-defense research,” estimated at a cut of $112 billion or 16 percent from the President’s request over 10 years. This could mean cuts to the National Science Foundation, the Department of Energy’s Office of Science, the National Institute of Standards and Technology, and the National Aeronautics and Space Administration, jeopardizing thousands of cutting-edge research projects.

o    The National Institutes of Health could slow NIH life-saving research into new treatments and cures for diseases like cancer, Alzheimer’s, and diabetes—potentially reducing the number of new NIH grants awarded by about 1,400. [OMB]

o    The National Science Foundation could be forced to issue thousands of fewer research awards, affecting tens of thousands of researchers, students, and technicians.

o    More than 50% of our economic growth since World War II can be attributed to development and adoption of new technologies.

o    Attacks investments in clean energy alternatives –like wind and solar -- that can make us less vulnerable to oil price spikes in the future, create new industries and spur U.S. global competitiveness.  The United States has fallen behind China in four of the past five years after leading the global clean energy investment race until 2008.

o    Adds $23 billion in agriculture cuts to $13 billion in cuts already made through the 2014 farm bill.

·         Economic Security/Food Stamps. Rejecting their talk of expanding opportunity, the Ryan Republican budget wages a war on the poor, with 69 percent of the cuts hitting programs for people with low or moderate incomes. [Cbpp ]

o    Slashes help putting food on the table for millions of families with children struggling to make ends meet, by cutting the Supplemental Nutrition Assistance Program (food stamps) by $137 billion over 10 years.

§  The Ryan Republican budget starts with cuts that would end food stamps for 3.8 million Americans the first year, and could worsen to throw 10 million people off of Food Stamps per year or cut their benefits by more than $1,900 a year for a family of four, starting in 2019. [CBPP, state by state , Current SNAP recipients state by state ]

§  The vast majority of SNAP households are families with children, seniors or people with disabilities with about 72 percent of SNAP recipients in households with children and more than one-quarter in households with seniors or people with disabilities.

§  Cuts  Women, Infants, and Children (WIC) critical food assistance for pregnant and postpartum women, infants and children leaving behind up to 200,000 postpartum women and children in 2016.

§  o   Fails to include the President’s proposal to expand the tax cuts (EITC) for single adults without children in low wage jobs that conservatives and liberals alike agree would encourage work by effectively raising their wages.

·         Health Care

o    Block-grants and slashes Medicaid by $732 billion over the next 10 years, cutting Medicaid by nearly one-fourth in 2024 – jeopardizing nursing home care for millions of seniors and undermining health care for millions of low-income children and people with disabilities.

o    Repealing the Affordable Care Act means repealing health coverage for the 25 million uninsured Americans who are projected by CBO to gain coverage under the law.

o    Repealing the Affordable Care Act also means eliminating important consumer benefits, including protection against discrimination based on pre-existing health conditions, protection for women to pay the same premiums as men for the same coverage, and the ability of young adults to stay on their parents’ health insurance plan up to the age of 26. 

o    Rejecting Key Economic Growth Proposals

§  Fails to include the Paycheck Fairness Act – critical legislation to ensure that women receive equal pay for equal work

§  Fails to include Immigration Reform – Fixing our broken immigration system is both essential for the character of our country and for strengthening our economy.  House and Senate immigration reform bills would:

§  Add 3.5 million jobs by 2024 [ Social Security Actuary ]

§  Boost real GDP by 5.4 percent in 2033 [CBO ]

§  Reduce the deficit by nearly $900 billion over 20 years  [CBO ]

§  Strengthen Social Security, adding two years of solvency [ Social Security Actuary ]

·         Fails to include A Minimum Wage Increase that would:

o    Raise wages for nearly 25 million people;

o    Increase pay and compensation by $35 billion for hardworking American families;

o    Lift between 1 and 4.5 million Americans out of poverty;

o    Fuel demand and economic growth for all Americans.

·         Fails to include An Unemployment Insurance Extension

·         Blocking unemployment insurance has cut off support for more than 2 million Americans looking for a job and will cost the American economy 240,000 jobs this year.

·         Nearly $5 billion has already been drained from state economies since unemployment insurance expired...and counting.  [state numbers ]

·         Economists agree that unemployment insurance remains one of the most effective ways to inject demand and grow the economy – delivering $1.52 in economic activity for every $1 spent.

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