A spending cut of $6.2 trillion from the president's budget over the next ten years. That's what Rep. Paul Ryan, who represents the House Budget Committee, is proposing in a cheerily titled document called the Path to Prosperity, which he explains in a YouTube video. Depending on which economists or think-tanks you get your statistics, this is either a "radical" plan or an act of "courageous political leadership."
If you believe the Heritage Center for Data Analysis (which Ryan cites in his Journal op-ed), the proposal will create a million new jobs within a year, bring unemployment down, spur economic growth by a trillion and a half over the next decade and result in higher wages for individual families over the next year. If you're more inclined toward Paul Krugman, he'd give you an earful about how Ryan's proposal for "voucherizing" Medicare will do "nothing whatsoever to control costs."
As the arguments develop for and against the budget plan, here's a snapshot of the latest flashpoints from Ryan's current proposal:
- It Puts the Nation on a Path to Actually Repay Our National Debt says Rep. Paul Ryan. In a Wall Street Journal op-ed contribution, he explains the urgency for passing this legislation. "For starters, it cuts $6.2 trillion in spending from the president's budget over the next 10 years," and "brings federal spending to below 20% of gross domestic product (GDP), consistent with the postwar average, and reduces deficits by $4.4 trillion," he explains. On Medicare: "Future Medicare recipients will be able to choose a plan that works best for them from a list of guaranteed coverage options. This is not a voucher program but rather a premium-support model." On Welfare Reform: it will convert "the federal share of Medicaid spending into a block grant that lets states create a range of options." On Tax Reform: it would consolidate tax brackets, lower tax rates and assume top individual and corporate rates of 25 percent.
- Ryan's Plan Emphasizes Social Support, Social Mobility and Personal Choice concludes The New York Times' David Brooks who appears amenable to the proposal, citing Ryan's "courageous leadership" for putting himself on the line for actual, deep spending choices. Still, despite the massive spending cuts, Ryan doesn't take "an austere meat ax approach." He writes: "I don’t agree with all of it that I’ve seen, but it is a serious effort to create a sustainable welfare state — to prevent the sort of disruptive change we’re going to face if national bankruptcy comes." The real question, however, appears to be how the president will respond:
It also creates the pivotal moment of truth for President Obama. Will he come up with his own counterproposal, or will he simply demagogue the issue by railing against “savage” Republican cuts and ignoring the long-term fiscal realities? Does he have a sustainable vision for government, or will he just try to rise above the fray while Nancy Pelosi and others attack Ryan?
- Here's What the Proposal Means If You're Elderly, Disabled, or Poor contends Brian Beutler at Talking Points Memo. "Low-income Medicaid beneficiaries will lose their guaranteed benefits altogether, he writes. And the block grants given to states? It means that "states get a bunch of cash from the feds and have to make the best of it. For many states, that will mean severe benefit rollbacks." For seniors, the system may stay mostly intact:
Ryan's plan would leave that system intact for anybody currently on Medicare, or expecting to be on Medicare within 10 years. For everyone else the program would be radically overhauled. Future beneficiaries would no longer have a single payer system to rely on. Rather, they'd be given a menu of private insurance plans to pick from, and subsidies to help pay their premiums. If those premiums skyrocket, that's on them. If the insurers themselves aren't required to pay for whatever the doctor orders, then the guaranteed benefits will erode.
- Ryan’s Budget Doesn’t Attempt to Reform the Medical-care Sector. It Just Has Cuts. writes Washington Post policy blogger Ezra Klein, who takes aim at the "bait and switch" tactics of Ryan's Medicare proposal of giving block grants to states:
Right now, the federal government shares Medicaid costs with the states. That means their payments increase or decrease with Medicaid’s actual rate of spending. Under a block grant system, that’d stop. They’d simply give states a lump sum at the beginning of the year and that’d have to suffice. And if a recession hits and more people need Medicaid or a nasty flu descends and lots of disabled beneficiaries end up in the hospital with pneumonia? Too bad.
- Is It Crazy to Let People Decide for Themselves What Services They Want? Maybe, writes The Atlantic's Megan McArdle about individualizing health care options, before noting that "there's not really all that much evidence that marginal health care expenditures make people much healthier, so there's pretty limited downside. Meanwhile, people do like to feel a sense of autonomy." She clarifies the upcoming health care budgeting debate this way:
We're going to be choosing between two very unpleasant alternatives: letting spending continue to rise, crowding out everything else the government does; or refusing to allow people in the public system access to all the possible treatments for their diseases. There is no third way that combines wide access to cutting edge treatments with lower spending.
- Those Heritage Statistics Ryan Uses? They're Based on an Already Discredited Analysis contends ThinkProgress blogger Matthew Yglesias. The Heritage Center for Data analysis was cited in Ryan's Journal article as projecting that his budget proposal would create a million new jobs within a year, bring unemployment down, spur economic growth by a trillion and a half over the next decade and result in higher wages. "I wonder if the Heritage Foundation has ever looked at the myriad benefits of tax cuts for the rich before," Yglesias quips, before explaining:
Heritage also claimed Bush’s tax cuts would boost tax revenue (“the national debt would effectively be paid off by FY 2010″) when in fact it led to record deficits, and they promised a surge in personal income when in fact we got the worst income performance ever
- Everything Is on the Table: Medicare, Social Security, Even Defense writes the pseudonymous Hot Air blogger Allahpundit, who guesses that the "adult conversation" set by the tone of Ryan's proposal will devolve quickly into partisan sniping and muses about how the president will respond. The blogger hopes that he "will gradually realize that signing on to this plan, or some version of it, is actually in his interest politically." Explaining:
There’s literally nothing [Obama] could do to alienate the left to the point where they won’t vote for him — most of them trust his judgment more than they trust their own, an unforeseen side effect of Hopenchange messianism — so he could win over independents by coopting Ryan’s plan and have nothing to fear about losing liberals in the general election. There’d be nothing much to fear from seniors, either: I think Ryan and Boehner are so sincere about tackling this problem that they’ll give O whatever bipartisan cover he needs to get this done.
- Surprise: GOP Is Using Bogus Economics to Sell the Extreme Cuts fumes Richard Eskow, a health policy blogger at The Huffington Post, who's essential argument appears to be that Americans will be paying more to get less. "Within ten years of this plan taking effect, most Americans would be spending all of their Social Security income just to pay for their health care or going without coverage," he figures. On Medicare, he writes:
The plan would raise the age when people become eligible for Medicare from 65 to 67, and would impose a means test on the program, so that anybody who makes $80,000 a year or more ($160,000 for couples) would have their Medicare benefit cut in half. By 2032, according to our estimates, that would be a penalty of nearly $9,000 under the more generous interpretation of the GOP plan.