“Moderate” No More

John Kasich’s new economic plan is another proposal to favor the wealthiest at the expense of working families.

John Kasich’s New Economic Plan Is Another Proposal To Favor The Wealthiest At The Expense Of Working Families

Today, Ohio Governor and Republican presidential candidate John Kasich released his five-point “action plan” for “reclaiming our power, money, and influence from Washington.” Though light on detail, the plan proposes a number of spending and tax cuts that, coupled with pledges to gut business and energy regulations, Kasich claims will give our nation the “resources to secure our nation, strengthen our families and communities, and reach our God-given potential.”

If it sounds familiar, that’s because it is: While the media has made a big deal of Kasich’s alleged status as the “moderate” in the Republican field, Kasich’s plan demonstrates that he is in lock-step with the rest of the Republican field—pushing policies that will favor the wealthy at the expense of working and middle-class families. Here’s a closer look at what his plan will actually do:

  • Freeze spending on programs that provide opportunity and economic security to working and middle-class families. Kasich’s plan calls for an eight-year freeze on non-defense discretionary spending, or the funding for core government programs that support working and middle-class families. His budget plan appears to assume that spending caps imposed by the Budget Control Act would be eliminated, but because inflation keeps increasing and the population is growing, his proposal to “freeze” the programs for eight years would effectively mean cutting their funding. Non-defense discretionary funding supports a very wide variety of programs including medical care for veterans, disaster prevention and relief, support for K-12 education for low-income students and students with disabilities, job training, Pell Grants, housing and food assistance, and many more. Cutting these programs is not good for the economy: according to a recent CAP report, bolstering non-defense discretionary programs like those targeted by Republican cuts will help families struggling to climb the economic ladder.
  • Increase defense spending without increasing funding for programs for families. Kasich’s fiscal “restraint” would not apply to defense spending, since he pledges to raise it by 17 percent between 2017 and 2025. Increases in defense spending will do little to help families who have not shared the benefits of the recent economic recovery. By calling for defense spending increases while allowing other programs supporting working and middle-class families to languish, Kasich is effectively parroting GOP Congressional orthodoxy on the budget, which has called for cuts to non-defense discretionary spending while increasing defense spending.
  • Provide tax giveaways to the wealthy. Kasich’s plan includes a number of changes to the tax code that would principally benefit the wealthy, including lowering the top tax rate to 28 percent from the current rate of 39.6 percent, eliminating the estate tax, dropping the top rates on long-term capital gains to 15 percent, and cutting the corporate tax rate from the current 35 percent to 25 percent. This is a huge boon to the wealthy: only the wealthiest 0.2 percent of estates pay any estate tax and the wealthiest benefit overwhelmingly from corporate and capital gain tax cuts, which far outweigh his small boost to the Earned Income Tax Credit. These effects come as no surprise since, as Governor of Ohio, Kasich pushed a tax agenda that gave tax breaks to the wealthy at the expense of working and middle-class households.
  • Slash health care benefits for low-income families. Kasich’s plan calls for converting Medicaid into a block grant, an idea long supported by the GOP-led Congress and by Mitt Romney during his unsuccessful 2012 presidential bid. Block granting Medicaid would cripple a vital program that in 2014 provided health coverage to 80 million Americans. Funding for block grants increases at a much slower rate than the growth in health care costs, so Kasich’s block grant proposal effectively increasingly squeezes Medicaid with each passing year. The Kaiser Family Foundation projects that block granting Medicaid could throw 14 to 20 million people off of Medicaid.
  • BOTTOM LINE: Kasich’s economic plan is the clearest proof yet that calling Kasich the Republican presidential field’s “moderate” is misleading: his plan completely adopts conservative Republican policies and attempts to pass these ideas off as mainstream. The budget, tax, and health care ideas in the Kasich plan are nothing more than another attempt to give the wealthy yet another boost at the expense of working and middle-class families.

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