Presumptive Republican presidential nominee Mitt Romney’s selection of Congressman Paul Ryan (R-Wisconsin) as his running mate this past weekend has provided plenty of fodder for discussions about the role of the US government. Unlike Romney, who has often declined to provide specifics about policies he’d pursue as president, Ryan has been very clear about what he thinks the government should do. As chair of the House Budget Committee, Ryan authored the “Path to Prosperity” budget proposal that the House passed earlier this year.

The New Yorker’s Ryan Lizza describe Ryan’s evolution as a politician and charts the development of his budget proposals. In 2010, Ryan released the “Roadmap to America’s Future” budget, which proposed replacing Medicare with a voucher programs and Medicaid with lump-sum grants to states that they could use as they pleased and called for shifting a portion of Social Security into private accounts. In 2011, Ryan released the “Path to Prosperity,” an updated version of the Roadmap that, Lizza explained, scrapped the more controversial components in order to win votes. Compared to President Obama’s 2013 budget, this version of Ryan’s budget would bring in $2 trillion less in tax revenues and spend $5.3 trillion less.

The Congressional Budget Office scores major legislative proposals and calculates how the federal budget will be affected for years in the future if the proposed changes are made. Proposals that aim to reduce the federal deficit will often specify that programs like Medicare and Medicaid can only grow at a certain rate relative to GDP, and that rate is usually significantly lower than the growth rate over the past several years. If you convert these programs into Medicare vouchers or Medicaid block grants, you can easily peg the annual growth to GDP in some way — e.g., say that they can only grow at GDP + 1% annually. In this scenario, unless healthcare costs stop growing as quickly as they have been, each year the gap between the value of the vouchers or grants and the cost of healthcare will get bigger.

That’s an important point when considering Ryan’s Roadmap, but his more recent budget proposal doesn’t include vouchers. Instead, the latest proposals from Obama and Ryan specify a Medicare growth rate of GDP +0.5% and have different plans for cutting Medicare expenditures accordingly. Ezra Klein explains at Wonkblog:

Ryan’s budget — which Romney has endorsed — keeps Obama’s cuts to Medicare [holding the Medicare growth rate to GDP + 0.5%], and both Ryan and Obama envision the same long-term spending path for Medicare. The difference between the two campaigns is not in how much they cut Medicare, but in how they cut Medicare.

Democrats believe the best way to reform Medicare is to leave the program intact but vastly strengthen its ability to pay for quality. Republicans believe the best way to reform Medicare is to fracture the system between private plans and traditional Medicare and let competition do its work.

It’s worth saying there’s no particularly good evidence for either option. Competition hasn’t worked very well in the health-care system. Indeed, Medicare currently includes private options through the Medicare Advantage program. The idea was these private, managed-care alternatives would be cheaper than traditional Medicare. As it turned out, they ended up costing about 20 percent more.

As for the pay-for-quality revolution that the Obama administration envisions, that hasn’t been proven at Medicare’s scale, either.

But, in a post earlier this year, Klein pointed out that the biggest cuts in Ryan’s 2013 budget aren’t to Medicare:

From reading the coverage, I get the sense that people think Ryan’s budget works something like this: It lowers taxes, cuts the deficit and pays for all that by cutting deep into Medicare. That’s wrong.

It’s Medicaid and other health spending, which includes the Affordable Care Act, where Ryan really brings down the hammer: That category falls by 1.25 percent of GDP. So Ryan’s cuts to health care for the poor are almost twice the size of his cuts to health care for the old.

And then there’s the “everything else” category, which includes defense spending, infrastructure, education and training, farm subsidies, income supports, veteran’s benefits, retraining, basic research, the federal workforce and much, much more. And this category of spending falls by 2.5 percent of GDP.

That’s a lot of numbers. But it’s also clarifying. The big cut here isn’t to health care for old people, though that gets the headlines. It’s to health care for poorer Americans. The biggest category of cuts is “everything else,” which shrinks to implausibly low levels, and Ryan, to my knowledge, has never detailed, even in broad strokes, how he gets it that low. But since he’s opposed to further defense cuts — he in fact raises spending on defense in the next 10 years — it seems inevitable that the non-defense side of “everything else” would have to shrink considerably, and that means cutting quite a bit from income supports and veterans’ benefits and infrastructure.

From his budget proposals, we can tell that Paul Ryan’s priorities include reducing the deficit and getting the federal government out of the business of ensuring that the elderly and the poor have healthcare and at least a small amount of income on which to live. That’s not a pathway to a future I want to live in.

Comments

  1. #1 james
    August 15, 2012

    No one except the top few percent of the population that is wealthy enough to never worry about whether they will have access to Medicare, Medicaid, or SSI (or the unnervingly large percentage of working class that seemingly aren’t smart enough to understand how it will affect them) likes that kind of future scenario.

  2. #2 Todd
    August 15, 2012

    Hmmmm…. I thought his budget reflected a priority to prevent the economic decline of America that is resulting from the socialist policies of the left in general and the current administration in particular. Its a pathway to a future that I hope the majority of voters want to live in.

  3. #3 Jim
    Cincinnati
    August 20, 2012

    Krugman covers Ryan’s budget in his column today in the NYT’s. While he’s critical of impact of the budget cuts proposed in Medicaid and other social safty net programs and the tax cuts to the very wealthy 1%, he takes aim at the ‘holes’ in Ryan’s budget that was supported by the House Republicans. This is where the rubber hits the road with reference to ‘fiscal responsibility’ and ‘deficit hawk’ posturing.

    According to Krugman, the Ryan/GOP budget specifies $4.3 trillion in tax cuts and only $1.7 trillion in budget cuts (this includes the same $716 billion savings from Medicare in the new health care law).

    Rather than decreasing the deficit, they will balloon while the cuts in the safety net will impact the most vulnerable members of our socity and insure that wages will become even more depressed than they have been. (I’m sure Ayn Rand is smiling up on Ryan and the GOP.)

    This isn’t a budget to “prevent the economic decline” of the US; it’s a budget that rewards the rentier class that sits on its arse and expects others to do the work that will keep them in luxury.

  4. #4 Todd
    August 21, 2012

    Krugman, Krugman, Krugman………….Krugmans expertise is in trade, not monetary policy. Krugman is also a shamless panderer for Obama. You might be interested to know that there are additional economists in this country, many with different views from Krugmans. Google “economists for Romney”. You’ll find over 500 names including 5 nobel laureates. This election is not an up/down referendum on the Romney/Ryan budget, it is a choice between 2 visions. We’ve had 3 1/2 years to see the result of one of these vissions. Open your mind to real change.

  5. #5 David
    August 22, 2012

    Todd,

    Krugman is a nobel prize winning economist with an impressive track record of accurate predictions; you are clearly a shameless shill for Romney who defines “socialism” as absolutely anything said by a Democrat.

  6. #6 Todd
    August 23, 2012

    David, I know Krugman won a Nobel, do you know what for? And I see you avoided the fact that over 500 economists, including 5 other nobel laureates, support Romney over Obama for reasons succinctly laid out on their site. This sure looks to be a preponderance of experts in the field. When the preponderance of experts in a field support something the left likes they are the first to trump this fact and call anyone who disagrees an ignorant luddite. Well, the ball is in your court. I suppose the classic liberal response will be that all of these economists are right wing hack extremists making up data, right????
    Open your mind to change you can truly believe in.

  7. #7 Todd
    August 23, 2012

    correction: it is now 576 economists and 6 nobel laureates.
    http://economistsforromney.com/
    Who will be the first lefty to say they are all nuts????

  8. #8 David
    September 1, 2012

    Todd,

    Economists agree Obama’s stimulus prevented a massive recession the likes of which have not been seen since “pro-business” policies of Herbert Hoover (http://www.bloomberg.com/news/2011-09-28/obama-jobs-plan-prevents-2012-recession-in-survey-of-economists.html), http://www.suntimes.com/business/7557992-420/economists-show-support-for-obama-job-growth-plan.html).

    And again, you duck the question about what Obama polices are so “far left, socialist” compared to previous administrations.