Paul Ryan's latest budget relies on even bigger unnamed savings
There's something breathtaking about any Paul Ryan budget. There are the savage cuts to healthcare and safety-net spending for the young and poor. The deep cuts to education, research, and infrastructure. The way current seniors are spared from any of this fiscal pain. The increased defense spending. And the tax cuts -- heavily tilted towards the rich, of course -- that will supposedly be paid for by eliminating loopholes.
It's this last bit that might be the most breathtaking. Ryan wants to radically simplify the tax code, and radically reduce rates in the process. His plan shrinks our seven brackets into two -- 10 and 25 percent -- while eliminating the Alternative Minimum Tax, the Obamacare taxes, and the expanded tax credits from the stimulus. On the corporate side, he wants to move to a territorial system, and lower the rate from 35 to 25 percent. Oh, and he wants revenue to average 18.8 percent of GDP for the next decade. The only way to do all of this is to radically cut tax expenditures too. But Ryan doesn't name a single expenditure he wants to cut. Instead, he bridges the gap with a magic tax reform asterisk.
This isn't a new magic trick for Ryan. It's just a bigger one. His tax plan hasn't changed from its previous iteration, but his revenue goal has. Ryan wants to keep the higher revenue level from Obamacare and the fiscal cliff deal without keeping those tax rates. That means his magic asterisk needs to be even more magic.
How much more magic? About a trillion dollars more.
Ryan's tax cuts would reduce revenue to a very low 15.5 percent of GDP over the next decade, according to the Tax Policy Center. But his revenue target for last year was 18.3 percent of GDP. Ryan said he would make up the difference by killing $5.6 trillion or so in tax breaks that he couldn't name. That was magical enough. But now he says he wants the same tax cuts and an extra 0.5 percent of GDP in revenue. That's about a $6.7 trillion hole. And remember, Ryan says his total budget -- tax reform and spending cuts -- will save $4.6 trillion the next 10 years. In other words, Ryan's magical savings are 146 percent of his overall savings.
This isn't a good trick. As Michael Linden of the Center for American Progress points out, there are only about $2 trillion worth of itemized deductions over the next decade. Ryan would also have to cut the big exclusions and preferences that litter the tax code to make his numbers add up.
[Glossary interlude: Itemized deductions for certain expenses, like home mortgage interest, reduce your taxable income according to your tax bracket; exclusions, like employer health care, exempt certain income from any tax at all; and preferences, like the like capital-gains rate, lower taxes for certain kinds of income.]
This is mathematically possible. But that doesn't make it politically possible.
The chart below from the Congressional Budget Office looks at the biggest loopholes, as a percent of GDP, over the next 10 years. Not surprisingly, the biggest ones are also the most popular. Ryan has to come up with $6.7 trillion in savings -- equal to 3.3 percent of GDP -- to make this work. And he's already ruled out ending the preference for capital gains (and probably, though not certainly, their exclusion at death).
This game of choose-your-own-tax-reform-adventure is quite difficult, impossible even, unless you get rid of the biggest loophole out there: the exclusion for employer-provided health care. But even if Ryan tax people's health care benefits, he isn't exactly left with easy choices. Would Ryan end the home mortgage interest deduction (just when the housing market is, barely, rebounding)? Or would he start taxing pension contributions -- think 401(k)s? Or maybe he'd eliminate the charitable deduction? Just about the only certainty here is he'd ditch the state and local tax deduction, since Republicans view that as a subsidy for high-tax, high-service blue states. But no matter what choices Ryan makes, he will almost certainly have to increase taxes on some middle-class households. It's just math.
You're not alone if you think magic is more fun than math. Paul Ryan certainly agrees.
Rioting broke out on Monday in Baltimore—an angry response to the death of Freddie Gray, a death my native city seems powerless to explain. Gray did not die mysteriously in some back alley but in the custody of the city's publicly appointed guardians of order. And yet the mayor of that city and the commissioner of that city's police still have no idea what happened. I suspect this is not because the mayor and police commissioner are bad people, but because the state of Maryland prioritizes the protection of police officers charged with abuse over the citizens who fall under its purview.
The citizens who live in West Baltimore, where the rioting began, intuitively understand this. I grew up across the street from Mondawmin Mall, where today's riots began. My mother was raised in the same housing project, Gilmor Homes, where Freddie Gray was killed. Everyone I knew who lived in that world regarded the police not with admiration and respect but with fear and caution. People write these feelings off as wholly irrational at their own peril, or their own leisure. The case against the Baltimore police, and the society that superintends them, is easily made:
Freddie Gray's death on April 19 leaves many unanswered questions. But it is clear that when Gray was arrested in West Baltimore on the morning of April 12, he was struggling to walk. By the time he arrived at the police station a half hour later, he was unable to breathe or talk, suffering from wounds that would kill him.*
Gray died Sunday from spinal injuries. Baltimore authorities say they're investigating how the 25-year-old was hurt—a somewhat perverse notion, given that it was while he was in police custody, and hidden from public view, that he apparently suffered injury. How it happened remains unknown. It's even difficult to understand why officers arrested Gray in the first place. But with protestors taking to the streets of Baltimore since Gray's death on Sunday, the incident falls into a line of highly publicized, fatal encounters between black men and the police. Meanwhile, on Tuesday, a reserve sheriff's deputy in Tulsa, Oklahoma, pleaded not guilty to a second-degree manslaughter charge in the death of a man he shot. The deputy says the shooting happened while he was trying to tase the man. Black men dying at the hands of the police is of course nothing new, but the nation is now paying attention and getting outraged.
In Baltimore, where 25-year-old Freddie Gray died shortly after being taken into police custody, an investigation may uncover homicidal misconduct by law enforcement, as happened in the North Charleston, South Carolina, killing of Walter Scott. Or the facts may confound the darkest suspicions of protestors, as when the Department of Justice released its report on the killing of Michael Brown.
What's crucial to understand, as Baltimore residents take to the streets in long-simmering frustration, is that their general grievances are valid regardless of how this case plays out. For as in Ferguson, where residents suffered through years of misconduct so egregious that most Americans could scarcely conceive of what was going on, the people of Baltimore are policed by an entity that perpetrates stunning abuses. The difference is that this time we needn't wait for a DOJ report to tell us so. Harrowing evidence has been presented. Yet America hasn't looked.
On Monday, Americans watched televised images of riots and looting in Baltimore, Maryland, where days of peaceful protests sparked by the killing of Freddie Gray gave way to mayhem in at least several locations. As CNN broadcast scenes of young people looting a CVS pharmacy and police cars burning in the streets, its commentators, including anchor Wolf Blitzer, criticized Baltimore officials for allowing such flagrant lawlessness to transpire. "I keep asking where are the police," he said. "They seem to be invisible." In fact, law enforcement had come under attack by high school students throwing cinder blocks, dispersed that crowd, and had officers massed at several spots, just not the particular corner where the news helicopter trained its cameras. The anchor treated truths not captured on CNN's video feeds as if they didn't exist. Americans should avoid that sort of myopia.
Does Adam Sandler have an expiration date? Does his particular brand of slapstick—humor that's infused with a wan self-deprecation, that manages to be simultaneously silly and sociopathic, that once found Sandler punching Bob Barker in the face while informing him that "the price is wrong, bitch"—hold up? Is Sandler's own price now, finally, wrong?
Recent events would suggest yes. Late last week, in the course of filming Sandler's newest project, the made-for-Netflix Western spoof The Ridiculous 6, a Native-American cultural advisor and several performers and extras walked off the set in protest. (Sample characters: Beaver Breath, No Bra, Sits-on-Face. Sample line: "Say honey: how about after this, we go someplace and I put my peepee in your teepee?") As Allison Young, a Navajo actress who quit after being asked to do a scene "requiring her to fall down drunk, surrounded by jeering white men who rouse her by dousing her with more alcohol" told the Indian Country Media Network, “We talked to the producers about our concerns. They just told us, ‘If you guys are so sensitive, you should leave.’”
Atheism is intellectually fashionable. In the past month, The New York Times has run severalstories about lack of faith in its series on religion. The New Yorker ran an article on the history of non-belief in reaction to twonew books on the subject that were released within a week of each other in February. The veteran writer, Adam Gopnik, concludes this:
What the noes, whatever their numbers, really have now … is a monopoly on legitimate forms of knowledge about the natural world. They have this monopoly for the same reason that computer manufacturers have an edge over crystal-ball makers: The advantages of having an actual explanation of things and processes are self-evident.
This is a perfect summary of the intellectual claim of those who set out to prove that God is dead and religion is false: Atheists have legitimate knowledge, and those who believe do not. This is the epistemological assumption looming in the so-called “culture war” between the caricatures of godless liberals and Bible-thumping conservatives in America: One group wields rational argumentation and intellectual history as an indictment of God, while the other looks to tradition and text as defenses against modernity’s encroachment on religious life.
On Monday afternoon the funeral for Freddie Gray took place in Baltimore, Maryland. Gray died last week from spinal injuries suffered while in Baltimore Police custody. After the funeral, against the wishes of the Gray family, some peaceful demonstrations took place, but other protests became violent, devolving into chaotic clashes.
At a large distribution center located north of Boston, a robot lifts a shelf holding merchandise and navigates it through the warehouse to the workstation of an employee who then picks the item needed for an order and places it in a shipping box. Incoming orders are processed by a computer that sends picking requests to sixty-nine robots. Then, the robots deliver storage units to roughly a hundred workers, saving the workers the task of walking through the warehouse to find the items. In other distribution centers, this is work that warehouse workers do.
The distribution center, run by Quiet Logistics—a company that fills orders for sellers of premium-branded apparel, is featured in the60 Minutes episode “Are Robots Hurting Job Growth?” In the segment, Steve Kroft poses the following question to Bruce Welty, the CEO of Quiet Logistics: "If you had to replace the robots with people, how many people would you have to hire?" Welty estimates that he would have to hire one and a half people for every robot, and that the robots are saving him a lot of money.
Police say that intentionally banging a suspect around in the back of a van isn't common practice. But the range of slang terms to describe the practice suggests it's more common that anyone would hope—and a roster of cases show that Freddie Gray is hardly the first person whose serious injuries allegedly occurred while in police transit. Citizens have accused police of using aggressive driving to rough suspects up for decades in jurisdictions across the country. Though experts don't think it's a widespread practice, rough rides have injured many people, frayed relationships, and cost taxpayers, including Baltimore's, millions of dollars in damages.
Where did it come from, and what are its intentions? The simplicity of these questions can be deceiving, and few Western leaders seem to know the answers. In December, The New York Times published confidential comments by Major General Michael K. Nagata, the Special Operations commander for the United States in the Middle East, admitting that he had hardly begun figuring out the Islamic State’s appeal. “We have not defeated the idea,” he said. “We do not even understand the idea.” In the past year, President Obama has referred to the Islamic State, variously, as “not Islamic” and as al-Qaeda’s “jayvee team,” statements that reflected confusion about the group, and may have contributed to significant strategic errors.