The Republican 'soak the rich' plan

President Obama is campaigning for reelection by casting Republicans as the party of the rich because they oppose his plan to raise tax rates on wealthy Americans. “If you’ve done well,” Obama declared in Cincinnati last week, “then you should do a little something to give something back.”

One person who agrees with that sentiment is Rep. Paul Ryan, the Republican chairman of the House Budget Committee — though not in the way Obama means it. Ryan wants the wealthy to give something back: the billions of dollars in government benefits, taxpayer subsidies and corporate welfare they receive each year and do not need. Instead of raising taxes, which would hurt growth and job creation, Ryan told me: “We want to stop subsidizing corporations. We want to stop subsidizing [wealthy] individuals. And you can get more money for savings to reduce the deficit without damaging the economy this way.”

Call it “soak the rich” economics, GOP-style.

What government spending on the wealthy would Ryan target? “Everything,” he says. He would start with entitlements. The two biggest and fastest-growing areas of federal spending are Social Security and Medicare, both of which provide the richest Americans with growing benefits. To help stabilize both programs, Ryan wants to scale back those benefits for the wealthy. On Social Security, he says, “you can get the bulk of your way to solvency without tax increases by indexing benefits so that they don’t grow as fast for wealthier people.” As for Medicare, his reform plan would provide wealthier seniors with lower subsidies, while “focusing the benefits on the people who need it and away from those who need it the least.”

Ryan is not alone in his call for means-testing entitlements. Means-testing has the strong support of House Speaker John Boehner, who earlier this year told Wall Street billionaire Pete Peterson at a forum in New York, “Pete, I love you to death, but I don’t think the taxpayers ought to be paying your Medicare premium.” The two leading GOP presidential candidates, Rick Perry and Mitt Romney, have also expressed support for means-testing. In May the Heritage Foundation put forward a plan that would reduce Social Security and Medicare benefits for well-off retirees and eliminate them entirely for the wealthiest seniors.

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