An Urban Institute analysis of Ryan's budget proposal from last year found block grants would lead states to drop between 14 million and 27 million people from Medicaid by 2021 and cut reimbursements to health care providers by 31%. Up to 10 million people could lose nutrition assistance since $134 billion would be cut from the program over 10 years, according to the Center for American Progress Action Fund. And at least 62% of Ryan's $5.3 trillion in nondefense budget cuts over 10 years come from programs that serve the poor, according to the Center on Budget and Policy Priorities. "This budget is Robin Hood in reverse -- on steroids," said Robert Greenstein, the center's president, when the Ryan plan was announced. "It would likely produce the largest redistribution of income from the bottom to the top in modern U.S. history and likely increase poverty and inequality more than any other budget in recent times."
Ryan, currently a House Republican and picked this weekend to be Romney's running mate, wants to turn Medicaid and food stamps into block grants and make recipients work for certain benefits, according to his budget proposal unveiled in March. "We don't want to turn the safety net into a hammock that lulls able-bodied people into lives of dependency and complacency, that drains them of their will and their incentive to make the most of their lives," Ryan said at the time.
In December Romney raised welfare reform's track record to justify his support of not only sending food stamp money to states in block grants, but also to cut the program by $127 billion: "Cutting welfare spending dramatically, I don't think will hurt the poor," Romney told Fox News' Chris Wallace.
Although Romney has said little about food stamps, he has indicated that he favors converting the program to a block grant, as he would do with Medicaid. The details are unclear, but in the Ryan budget, which Romney endorses, grants increase by fixed formulas and eligibility is tied to work or job training, not just poverty.
The former governor would restructure the Medicaid program to give the states much more control but, potentially, much less money. Romney would transform the program into a block grant that would hand over predictable cash amounts to states with few policy strings attached. Grants would rise at the rate of gross domestic product growth plus 1 percent. Critics warn that inflexible spending increases wouldn't keep pace with health care costs, demographic changes, or increases in the number of eligible residents that accompany economic downturns.
The GOP challenger praised his No. 2 for battling to “save Medicare,” and yet never flat-out embraced Ryan’s austere proposals, which would slash several entitlement programs and revamp Medicare, the federal health insurance program for the elderly.
For the most part, Governor Romney has not outlined cuts in specific programs. But if policymakers exempted Social Security from the cuts, as Romney has suggested, and cut Medicare, Medicaid, and all other entitlement and discretionary programs by the same percentage — to meet Romney’s spending cap, defense spending target, and balanced budget requirement — then non-defense programs other than Social Security would have to be cut 29 percent in 2016 and 59 percent in 2022. Without the balanced budget requirement, the cuts would be smaller but still massive, reaching 40 percent in 2022.
President Obama has had three years in office, during which time he has attacked every serious proposal to preserve and strengthen America’s entitlement programs. Mitt Romney has laid out the approach he would take to modernizing America’s entitlement programs, guaranteeing their continued vitality for future generations. Mitt’s proposals will not raise taxes and will not affect today’s seniors or those nearing retirement. He proposes that Social Security should be adjusted in a couple of commonsense ways that will put it on the path of solvency and ensure that it is preserved for future generations.
First, for future generations of seniors, Mitt believes that the retirement age should be slowly increased to account for increases in longevity. Second, for future generations of seniors, Mitt believes that benefits should continue to grow but that the growth rate should be lower for those with higher incomes. With just those two simple steps, and no change in benefits for those at or near retirement, America can guarantee the preservation of the Social Security system for the foreseeable future. Mitt is committed to saving Social Security. He will ensure that America honors all of its commitments to today’s seniors and strengthens the program so that it is financially secure for future generations.
Mitt’s plan honors commitments to current seniors while giving the next generation an improved program that offers the freedom to choose what their coverage under Medicare should look like. Instead of paying providers directly for medical services, the government’s role will be to help future seniors pay for an insurance option that provides coverage at least as good as today’s Medicare, and to offer traditional Medicare as one of the insurance options that seniors can choose. With insurers competing against each other to provide the best value to customers, efficiency and quality will improve and costs will decline. Seniors will be allowed to keep the savings from less expensive options or choose to pay more for costlier plans.