04 April 2011

New GOP plan

The GOP has released a 2012 budget proposal, conceived and shepherded by Rep. Paul Ryan. It's interesting.

First, Derek Thompson at the Atlantic sums up the current budget problem and the proposed solutions, in a nutshell:

Take a long look: This graph is the beating heart of Washington's budget debate. It shows the hydra health care monster opening its mouth in mid-century and gobbling up all government revenue within a generation or two.

This picture is a partisan Rorschach test. Washington promised to pay for every senior's health care. We can't. Paul Ryan's sees the graph and says, "Let's change our promise." The White House's sees the graph and says, "Let's change health care."

The White House tried to provide care for everyone with the Affordable Care Act. The ACA used a large number of tricks and techniques to try to bring everyone into the system and keep it affordable; this means creating interstate exchanges, mandating coverage to bulk up enrolled numbers, and creating agencies to regulate out some waste. It's huge and ugly and scary, so it's being instituted in stages (and won't really kick in until 2014). It's not the ideal solution for anyone, either - so it's hard to find ardent defenders. But it will help.

I'll let the WSJ sum up the new GOP plan:
The plan would essentially end Medicare, which now pays most of the health-care bills for 48 million elderly and disabled Americans, as a program that directly pays those bills. ... Mr. Ryan's proposal would apply to those currently under the age of 55, and for those Americans would convert Medicare into a "premium support" system. Participants from that group would choose from an array of private insurance plans when they reach 65 and become eligible, and the government would pay about the first $15,000 in premiums. Those who are poorer or less healthy would receive bigger payments than others.
The proposal would also convert Medicaid, the health program for the poor, into a series of block grants to give states more flexibility. And it is expected to suggest significant cuts in Social Security, while proposing fewer details on how to achieve them.

The numbers of everything else are still in flux, but that's the broad outlines of one of the essential parts of the plan. But some commentators are asking why the GOP would do this, because it's going to be really hard to spin reducing spending on Medicare as anything other than "cutting Medicare", something they have been fighting with fiery rhetoric for years now. I can understand shifting to block grants for Medicaid, which will cut funding dramatically - the poor have no lobby, so it makes sense to screw them.  But it seems like they're shooting themselves in the foot with the elderly, one of their key demographics. What's the deal?

Matt Yglesias has a theory:
Naturally, part of the plan here is that Ryan is going to promise currently elderly people that they’ll get all their currently promised benefits plus that he’ll undue the Medicare cuts that were part of the Affordable Care Act. The idea here is that today’s old people—a very white group that’s also hostile to gay rights, and thus sort of predisposed to like conservative politicians—will also get to benefit from an extremely generous single-payer health care system. But younger people—a less white group that’s friendly to gay rights and thus predisposed to skepticism about conservative politicians—will get to pay the high taxes to finance old people’s generous single-payer health care system, but then we won’t get to benefit from it. This is in part in order to clear headroom in the budget so as to make gigantic tax cuts for rich people affordable.

Ah, a bribe to the elderly so they'll keep quiet about clearing room for tax cuts for the rich. That actually explains it all pretty elegantly. I'll be looking for the Republican story, but right now this is enormously persuasive.

1 comment:

  1. People over 55 are the ones who vote. I think both parties are too scared to cut Medicare benefits for current recipients, because of the inevitable political fallout. So unfortunately that means this sort of generational theft.

    I think this is one of the inherent problems with entitlement programs. As they expand beyond expectations, the beneficiaries can act as a bloc to keep a given program from being cut. So reform becomes difficult.