Analysis: A true reformer is on the ticket
So far as voters know anything about Paul Ryan — and the humbling truth to those of us in the Beltway, where Ryan is a household name, is that most of them don't — they likely know him as an ardent deficit hawk who is unusually fearless when it comes to cutting government spending.
Both impressions speak to a central misconception about Ryan's policy interests: He is not primarily interested in reducing the deficit or cutting federal spending. He has voted to increase deficits and expand government spending too many times for that. Rather, the common thread throughout his career is his desire to remake the basic architecture of the the federal government.
But the confusion persists because, while Ryan's policy chops are well known, the specifics of his policies are not.
Take Ryan's budget. It's most famous for cutting entitlement programs, particularly Medicare. But that's not primarily what it does. If you look at the numbers Ryan gave to the Congressional Budget Office, the cuts to Medicare are only 60 percent as large as the cuts to Medicaid and other health-care programs. And the cuts to Medicaid and other health-care programs are only half as large as the cuts to non-entitlement programs.
The truth is that the Ryan budget's largest long-term savings don't come from Medicaid or Medicare or Social Security, or even Medicaid and Medicare and Social Security put together. They come from everything else. Ryan says that under his budget, everything the federal government does that is not Medicare, Medicaid or Social Security will be cut to less than 3.75 percent of gross domestic product by 2050. That means defense, infrastructure, education, food safety, energy research, national parks, civil service, the FBI — all of it. Right now, that category of spending is 12.5 percent of GDP.
Critics point out that defense alone has always cost more than 3 percent of GDP, that Romney has promised to keep defense spending above 4 percent of GDP, and that the cuts to government services required to make those numbers work are beyond draconian. They also note that Ryan's plan increases defense spending in the short term, and that his tax cuts have a 10-year price tag of more than $4 trillion, but he has not identified any offsets.
Ryan is also known for his deep allergy to debt. But that concern isn't evident in his voting record. He voted for the Bush tax cuts, as well as the war in Iraq and the unfunded Medicare Prescription Drug Benefit. Perhaps his most ambitious policy proposal prior to his celebrated budgets was the Social Security Personal Savings Guarantee and Prosperity Act of 2005, a plan to privatize Social Security. The program's actuaries found that Ryan's plan would require $2.4 trillion in additional costs over the first 10 years, and the Bush administration ultimately dismissed it as "irresponsible."
On Medicare, Ryan originally proposed eliminating the traditional Medicare plan entirely and replacing it with a menu of private plans. He subsequently softened the proposal to include the traditional Medicare plan as one option on the menu. But either way, he would remake Medicare from a defined-benefit plan, in which seniors are simply guaranteed Medicare coverage, to a defined-contribution plan, in which they are given a voucher equal to the cost of the cheapest plans on the menu, and if they don't want those plans, they have to pay the difference.
On Medicaid, Ryan proposed turning the program over to the states and limiting the federal contribution — which now increases alongside Medicaid's actual expenses — to block grants that grow more slowly than health-care costs. The nonpartisan Kaiser Family Foundation estimated that this would cut Medicaid spending by more than $700 billion over the next decade, but at the cost of throwing between 14 million and 19 million people, many of them children, off Medicaid.
The list goes on. Ryan's Social Security proposal, which was among the most ambitious offered by any member of Congress, would have diverted Social Security contributions into private accounts. Ryan's health-care proposal would have ended the tax exclusion for employer-based plans to a refundable tax credit for individuals. Ryan has even sponsored legislation ending the requirement that the Federal Reserve work to achieve full employment.
Some of these policies, like Ryan's Medicaid plan, would reduce deficits. Some of them, like his tax plan, would likely increase them. Many of them would have an unclear effect, which is why Ryan's savings tend to come from instructions he gives the Congressional Budget Office to assume that Congress sticks to extremely austere spending paths, which is how, for instance, he gets all non-entitlement spending down to 3.75 percent of GDP by 2050.
But the real north star of Ryan's policy record isn't deficits or spending, though he often uses those concerns in service of his agenda; it is radically reforming the way the federal government provides public services, usually by privatizing or devolving them away from the federal government.
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