Paul Ryan will not run for prez, and that’s too bad

— Wisconsin Repub Congressman Paul Ryan, employing his customary straight talk, has squelched the buzz that he might run for president in 2012. His statement, made to a Milwaukee TV station, was frank and charming:

“I’ll give you as Shermanesque a quote as I can,” said Ryan.  “I am not going to run for president. I’m just not going to do it. My head’s not that big, and my kids are too small.”

Too bad. Ryan, of Janesville, Wis., a rising Republican star and currently the top House Repub on the Budget Committee, has put on the table a complete budget alternative that the CBO says would eliminate the deficit. Ryan doesn’t say it. The CBO says it.

A couple of facts about how Ryan’s “blueprint” would do that:

First of all, the budget doesn’t hit balance until 2080. (But, for contrast, CBO projects that without changes, the deficit will equal more than 40 percent of GDP in that year.)

Second, he does it almost entirely by restraining the growth rate of Medicare and Medicaid. And he does that by ending the conventional Medicare arrangement, under which the government directly pays the bills for seniors’ health care expenses. Instead, future seniors (the plan grandfathers in those who are already 55 and older) would receive a voucher from the government and then be turned loose to choose a health insurance plan from among several options (the menu is supposed to be modeled after the many excellent health insurance choices now available to members of Congress and other federal employees).

But here’s where it gets tough. When the plan first kicks in, the voucher would be about equal to what Medicare is spending on the average recipient (actually, CBO says it would be slightly less and, because Medicare spends less than private insurers do on administration, and nothing on profits, the quantity of health care the seniors could purchase with their vouchers would be less than the quantity used by the average Medicare beneficiary).

Then — and here is where the potentially really big savings and the potentially really big pain comes in — the voucher payment would grow over the years at a rate that CBO says would be significantly less than the scandalously high growth rate of health care costs. So after a while, the voucher would purchase significantly less health care than what Medicare pays for now. Significantly less.

The long-term projected increase in the cost of Medicare and Medicaid is, by a huge margin, the biggest factor driving the long-term debt and deficit projections into the stratosphere. Ryan’s plan holds them down to the atmosphere and that is the magic factor that knocks the federal debt picture off its current unsustainable course. But it does it by putting future seniors in a position where they will have to spend more of their own money on health care, or they will have to do with less health care.

You can call Ryan’s idea “nothing short of violent,” as Wash Post health guru Ezra Klein did. But it is ruthlessly efficient and virtually guaranteed to accomplish its goal, which is to stop Medicare and Medicaid from making the budget unbalanceable.

I am not endorsing Ryan’s plan, but I totally respect it. It is honest.

Pres. Obama said the same about it when he met with the House Repubs last week. He spoke of it with respect and made clear that he had studied it and thought about it. But he also noted that Repubs have been having fun demagoguing the really quite modest provisions of the Dem health care bill to save a little money out of Medicare by ending federal subsidies for the supplementary “Medicare Advantage” programs. He invited Ryan and the others in the room to think about what Dems could do (will do, I suspect) with the Ryan plan to portray it as a granny killer.

Maybe Ryan has engaged in some of that demagoguery, I don’t know his record that well. From what I’ve seen, he is a straight shooter, deeply conservative, intellectually honest.

Apparently, he is also willing to put on the table and defend the very politically risky and explosive facts about what America could expect if it gave power to the Repubs and if they had the guts — as they have not had for the past 30 years of pretending that they care about deficit and debt to specify what it would take to get the deficit under control.

Do Minnesota’s House Republicans — John Kline, Erik Paulsen and Michele Bachmann – support the Ryan blueprint?

Do Democrats have a plan that will eliminate the deficit or bring it down to a sustainable level? Ever?

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Comments (15)

  1. Submitted by Peder DeFor on 02/09/2010 - 01:30 pm.

    I haven’t studied Ryan’s plan but I think that the smaller amount of future payments is supposed to reflect lower future prices. The future prices are lower because a voucher system (and higher consumer involvement at purchasing) should increase market competition. These factors have dropped prices in virtually every other market where they’re allowed to run free. I know the arguments for why health care is somehow free from the laws of supply and demand but I don’t find them convincing.
    And Eric, your last question is a key one. For all those complaining that Repubs need to have a counter solution if they oppose Obamacare, you *must* therefore propose some kind of plan to save us from the ever deepening debt due to entitlements.

  2. Submitted by Dan Hintz on 02/09/2010 - 03:23 pm.

    Ryan gets some credit because he actually comes up with concrete plans, which is distinct from the approach to most Republicans – just saying no to everything. But it is really a stretch to call Paul Ryan intellectually honest.

    The biggest problem – which you point out – is that the pain comes many years in the future. Ryan’s proposal simply postpones the tough decisions. And given the fact that the members of congress of the future likely won’t make those tough decisions – i.e. telling seniors that Medicare will pay “significantly less” of their health care costs – Ryan’s proposal is worthless. Seriously, does anyone in their right mind that that is going to happen? Think of the tea party crowd and their “get your governemnt hands of my Medicare” signs. Cutting Medicare benefits is a non-starter no matter what policital party you belong to. What Ryan has done here is craft a proposal that leaves tough decisions to others knowing full well that they won’t actually make those decisions. If that is what passes for political courage and a straight shooter these days, we are in real trouble.

    There are dozens of countries that have better health care systems than ours – systems that spend less on health care and deliver better outcomes. Because the health care systems in these countries, to differing degrees, all have more government involvement the Republicans won’t even give them a look. Do you know what would be a politically courageous act by Ryan? Getting over the anti-goverment ideology of his party and looking at what works in these countries. Instead, Ryan applies the same old right-wing ideology in the form of vouchers, which as you point out, will mean less health care coverage because of the increased administrative costs for private insuers.

  3. Submitted by Peder DeFor on 02/09/2010 - 04:56 pm.

    Dan, thank you for your proposal to fix long-term debt problems. Also, if you think that Republicans only say ‘no’ to problems, well, you should get out and actually meet some. You might find it refreshing.
    And I don’t think that Ryan can really be accused of putting off the tough problems, certainly not in the realm of the current health care ‘fix’ of taxing for ten years and giving benefits for five. Tackling entitlements involves some kind of ramping down and that, be definition, will take some time. You wouldn’t prefer a solution that ended Medicare full stop, would you? I mean as a talking point to kill all those straw men on the other side it would be great but as an actual solution it has some obvious drawbacks. Also, I’d bet you’d find a much higher will to actually cut government services among the Tea Partiers than you will amongst Dems.
    And lastly, to your point about other countries approaches to health care, they do spend less than the US right now but the curve is the same shape. In other words, their costs are going up about the same as ours, we’re just further ahead right now. In the long run, they’re screwed too.

  4. Submitted by Dan Hintz on 02/09/2010 - 05:29 pm.

    First, the Republicans’ interest in long term debt problems is pretty recent. The last Democratic administration left Bush with a budget surplus, which Bush (with a supportive Republican congress most of his presidency) squandered. Obama came in with a huge deficit and a deep recession, so its pretty laughable that Republicans are now interested in deficits and long term debt. Its also a mistake to focus on those things at this point while the country is still climbing out of the recession.

    The fact that no one else (Republicans or Democrats) is seriously tackling the long-term entitlement problem doesn’t make Ryan any less of a fraud. Sure, you need to taper down any significant changes. But other than wasting more money on administrative costs through vouchers, Ryan hasn’t proposed any reduction now. The reductions would come later, but as Ryan knows very well, that simply won’t happen.

    As far as the tea party crowd goes, given the absurd statement I cited about government hands off Medicare, I don’t expect much in the way of coherent thought from them. I expect that they want to cut government spending in the abstract, but when it comes down to specific – and things such as entitlement programs – probably not so much.

    The fact that other countries face the same long-term entitlement issues we do doesn’t mean that we shouldn’t ignore the fact that their systems work better – not just in terms of costs, but also in terms of outcomes. We all may be screwed, but if they are far less screwed, why don’t we see why? Ryan and his ideological brethren are unwilling to do that.

  5. Submitted by Joe Johnson on 02/09/2010 - 06:42 pm.

    Dan – Who was in Congress when Bush was handed a surplus?

  6. Submitted by Paul Brandon on 02/09/2010 - 06:49 pm.

    The one thing not mentioned is that privatizing Medicare will remove its bargaining power, so rather than going down, the costs TO THE INDIVIDUAL for Medicare will go UP.

    As a recent study showed, increasing immediate medical costs (in that case by increasing copayments) resulted in a decrease in preventive health care and an increase in long term medical expenses as deferred treatment resulted in more serious problems resulted in more hospitalization, with attendant costs.

    So, this may be a serious proposal, but not one that will benefit citizens who cannot afford to pay for all their own medical costs.

  7. Submitted by Dan Hintz on 02/09/2010 - 09:47 pm.

    “Dan – Who was in Congress when Bush was handed a surplus?”

    The same people who pissed the surplus away once Bush replaced Clinton.

  8. Submitted by Dan Hintz on 02/09/2010 - 09:57 pm.

    Peder, I want to clarify my inartful statement about Ryan being a fraud. My use of that term was only meant to refer to the claims that Ryan is a “straight shooter” or that he has demonstrated political courage here. While I disagree with those characterizations of Ryan, there is nothing fraudulent about his Medicare proposal and I did not mean to imply that Ryan has done anything more than propose policies I disagree with.

  9. Submitted by Joe Johnson on 02/10/2010 - 07:36 am.

    Dan – I love the logic and language. Everyone should receive all the blame and all the praise based on party affiliation, pure genius.

  10. Submitted by Peder DeFor on 02/10/2010 - 12:03 pm.

    Dan, I still don’t think that’s really a valid criticism in this case. Yes, any long term plan put forth today could be undone by future politicians. But that’s true of literally *every* long term plan. Does that mean we should abandon plans that would go beyond the current legislative session?
    And when it comes to attempting to wind down the enitilements that are eating all of the future budgets I’m not sure that there are many options. A legislature could call for it all to be stopped within a year, which would cause obvious disruptions from people who have good cause to expect the system to be in place. Or they can urge a gradual system, one that take place over a much longer time span. I’m one of those heartless anti-entitlement types and I’d still prefer the long term plan. Much less disruptive. Am I missing some third choice here?
    Also, I’m still waiting to hear about a Dem plan to reduce long term entitlement debt…

  11. Submitted by Dan Hintz on 02/10/2010 - 02:08 pm.

    Joe, I am assigning blame where blame is appropriate. Clinton took deficit reduction and balancing the budget seriously seriously and the deficits he inherited were surplusses when he left office. Bush did not take those things seriously by the time he left office the surpluses had been replaced by deficits. Is Clinton solely responsible for that success and Bush solely responsible for that failure? Of course not. My point is simply that its pretty rich that the Republicans have taken a newfound interest in the deficit and national debt.

    Part of the problem now is that unlike Bush, Obama is being honest about the budget. Under Bush, the Iraq and Afghanistan wars were not part of the regular budget, even though they cost hundreds of billions of dollars. Those costs are now part of the budget, which makes the numbers look worse than when they weren’t counted under Bush.

  12. Submitted by Dan Hintz on 02/10/2010 - 02:21 pm.

    Peder, your points are well taken.

    I don’t think we should abandon plans that go beyond the current session. On the other hand, when the plans stretch out for decades and, as in this case, all the pain comes down the road, I don’t think there is much value here. You think that Ryan has proposed a solution. I don’t – I think he has simply postponed tough decisions for others to make, and since they won’t make them (not “may not” make them, but “won’t” make them) he hasn’t even done that.

    The answer to the problem of long term Medicare obligations is health care reform. If we had a health care system like most other industrialized countries, we would not have nearly the problem we do. Sure, those countries have the same demographic issues to deal with – people living longer and having fewer kids to support the retirees – but if you have health care costs under control, its much easier to deal with. If Ryan had any political courage, he would have bucked his party and looked to Europe or Canada for solutions. Instead he offers a half-baked voucher program.

  13. Submitted by Dimitri Drekonja on 02/10/2010 - 02:32 pm.

    The plan the congressman puts forth (or at least the summary presented here, I have not read the whole plan) has one big problem:

    It addresses only what people can spend (by some capped voucher), and seems to trust to fate that it will be enough. What is missing, and what is missing from the health plans being debated in congress, is how to rein in medical costs.

    We currently spend 2 times as much per capita as most devloped countries, and in exchange we live shorter, less-healthy lives, with more time spent in the hospital. The contributors to this are many, including:

    -The multitudes of private insurers, making 31 cents of our healthcare dollar go to administrative overhead (multiples of what other countries spend).
    -Excessive spending at the end of life (keeping people alive in intensive care units, initiating dialysis in patients with terminal illnesses, etc)
    -Higher legal costs (a tiny fraction of the costs, but have to include it or the right screams bloody murder)
    -Excessive, non-indicated, and futile care. Examples abound. Knee arthroscopy for degenerative joint disease (proven to not help, widely done). Home blood sugar monitoring for type 2 diabetics- shown to harm more than help, widely done. Antibiotics for everything under the sone: 85% of courses likely not helping, but exposing people to real and sometimes deadly side effects. Ironically, when I hear the right say “you don’t want a beuracrat between you and your doctor” I’m usually thinking “yes you do- your doctor might think twice about some of the nonsense that is done.

    Yet, when people try to address this (such as with the recent updates on breast cancer screening, which were so bold as to say that screening 40-49 year olds for breast cancer should not be routine, but rather be individualized and take into account a discussion of risks and benefits with the patient [what a concept!]), they run into a media-fueled political buzzsaw, and the status quo remains.

    As a physician I see things happen on a daily basis that add little (or nothing) to care, but all carry a price. Healthcare reform needs to look seriously at how to limit this type of practice, in addition to ending our shameful stigma of being the only developed country where we allow a huge chunk of our population to be uninsured.

    A blatant endosement: Physicians for a National Health Plan has a very reasonable proposal
    (http://www.pnhp.org/physiciansproposal/proposal/Physicians%20ProposalJAMA.pdf) that would be a vast improvement on the status quo. Unfortunately, I suspect we need to sink deeper into crisis mode, before people will be willing to take the jump to such a reasonable system.

  14. Submitted by Steven Smith on 02/11/2010 - 07:16 am.

    Absurd. Ryan asked CBO to score his plan assuming no change in revenue while extending tax cuts. CBO complied; press got fooled.

  15. Submitted by Paul Brandon on 02/11/2010 - 07:11 pm.

    Some numbers from the CBO (courtesy of Paul Krugman):

    “Well, Rep. Paul Ryan’s Roadmap for America’s Future calls for the eventual elimination of Medicare as we know it, replacing it with a system of vouchers that would, eventually, account for a steadily declining share of GDP. But what about the next decade? Mr. Ryan’s release says that it

    Strengthens the current program with changes such as income-relating drug benefit premiums to ensure long-term sustainability.

    What does that mean? The CBO, helpfully, translates:

    People who are age 65 or older in 2020 and other existing enrollees at that time would continue to be covered by the current program, although some higher income enrollees would pay higher premiums, and some program payments would be reduced.

    In other words, Medicare would face cuts. And the CBO’s detailed analysis provides an estimate of those cuts. I’ve taken the table comparing projected spending with baseline as a share of GDP (xls), and scaled it up using the CBO’s projections of GDP. What I get is an estimated cut in Medicare spending over the next decade of about … $650 billion.

    So, cutting Medicare by $500 billion is wrong — support Republicans, who want to cut it by $650 billion!”

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