Rhetoric v. Reality: A Viewer’s Guide to Rep. Paul Ryan’s State of the Union Response

January 25, 2011

Americans United for Change has put together this handy guide for watching tonight's Republican response to Pres. Barack Obama's State of the Union Address tonight: From The Politico: “FIRST LOOK: GOP RESPONSE: House “Budget Committee Chairman Paul Ryan, in his State of the Union rebuttal, will call for an end to ‘Washington’s spending binge,’ ... [contending that] the past two years failed to stem historic unemployment … [H]e will emphasize the need to cut federal spending to boost job creation.”

Rhetoric: “[Ryan will contend that] the past two years failed to stem historic unemployment.”
Reality: December was the 12th straight month of job growth in the private sector with 113,000 jobs added -- and more than 1.3 million added in 2010.

Job Growth
Rhetoric: “[H]e will emphasize the need to cut federal spending to boost job creation.”
Reality: Mere weeks in control of the U.S. House, Republicans have already passed legislation repealing health reform that would add $230 billion to the deficit and stifle job growth by up to 400,000 a year. In addition, according to the Tax Policy Center, over all the Ryan Roadmap budget plan would reduce revenue, not the deficit, by almost $4 trillion over the next decade.

More Rhetoric to Look Out for Tonight

When Ryan says: Entitlement reform
Reality: The centerpiece of the Ryan Roadmap is privatization and cuts to Medicare, Social Security and SCHIP – the State Children’s Health Insurance Program. This merely skims the surface on the cuts middle income families would face under the Roadmap.

When Ryan says: Medicare sustainability, path to sustainability, Medicare reform, unfunded health care entitlements (also see: market forces, free market, competition) Reality: The Ryan plan would eliminate the Medicare system as we know it, replacing it with vouchers seniors would then put toward whatever insurance they could get and in many cases not be able to cover all medical costs. According to the CBPP, “By 2080, Medicare would be cut 76 percent below its projected size under current policies, according to CBO. In other words, by 2080, the vouchers that would replace Medicare would receive one-quarter of the resources that Medicare would otherwise use.”

When Ryan says: Retirement security
Reality: The Roadmap would cut Social Security checks by roughly 16 percent for the average new retiree in 2050 and 28 percent in 2080 from price indexing alone -- and initially diverts most of these savings to help fund private accounts rather than to restore Social Security solvency. Because the plan would divert large sums from Social Security to private accounts, it would leave the program facing insolvency in about 30 years, just as under current law.

When Ryan says: Market forces, competition, free markets
Reality: The Roadmap would subject your guaranteed retirement to the same market forces that led to the subprime mortgage crisis, creating private, Wall Street accounts that could be gambled and lost, just as trillions of dollars in private retirement savings were lost in the economic crisis.

When Ryan says: Spending binge, boosting private-sector job creation by cutting spending
What Ryan means: Unclear – when asked what he would cut, Ryan replied “I can't tell you the answer to that.” We can only surmise that he means cutting any government service or investment other than $700 billion in tax cuts for the wealthiest 2 percent of Americans.

When Ryan says: Shared sacrifice, a tax code that maximizes competitiveness and economic growth
Reality: The Ryan roadmap raises taxes on the middle-class, lowers taxes for the wealthy – essentially creating a massive transfer of wealth to the rich. The Roadmap replaces corporate taxation with a regressive consumption tax, and eliminates taxes on everything from capital gains to dividends to estates and corporations. The Tax Policy Center says the richest one-tenth of 1 percent would get an average tax cut of $1.7 million a year. In total, middle class families earning between $50,000 and $74,000 a year would see their average tax rate jump to 19.1 percent from 17.7 percent under this plan – an increase of $900 on average, while families making more than 10 times that amount would see their taxes fall substantially, from 25.3 percent to 18.3 percent.

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