Paul Ryan’s Medicare Scheme
His new proposal is less radical than his last one, and it just might pass if Obama loses.
By Matthew Yglesias|Posted Thursday, Dec. 15, 2011, at 6:05 PM ET
Say what you will about House Budget Committee Chairman Paul Ryan, R-Wis., but he knows a thing or two about how to shift the Overton Window. If 18 months ago he’d unveiled a plan to drastically cut Medicare spending and also partially privatize the program, nobody would have thought it was in any way bipartisan or a compromise. Yet at a Dec. 15 press conference, Ryan was able to unveil the plan in partnership with Sen. Ron Wyden, D-Ore., and get it—accurately—described as a major leftward shift in his own thinking.
To understand how, we need to walk back to the incredible radicalism of the budget proposal he unveiled at the beginning of the year and—remarkably—got the vast majority of Republicans to vote for.
Ryan’s original plan had a number of astounding elements, but the most politically salient element dealt with Medicare. He offered, in essence, a sleight of hand. His goal was to produce massive long-term savings in Medicare spending relative to current projections, in order to show a way to sustain the United States government consistent with never raising taxes from the Bush-era level. This is the budgetary equivalent of Mission Impossible, since one important thing the federal government does is pay for old people’s health care. That’s an expensive task, and it’s a task that grows more expensive over time. Ryan’s solution was to simply wave his hand and decree that in the future federal expenditures on old people’s health care would increase at no more than 1 percentage point higher than the overall rate of consumer price inflation. It’s a great solution, except it’s not a solution at all. It’s an aspiration, and a totally unrealistic one.
Advertisement
In parallel, Ryan offered a massive structural change. Instead of getting Medicare, seniors would get a voucher to purchase private insurance. This change is, obviously, great for health insurance companies but does nothing to save money. All the savings come from the fact that the vouchers grow at an implausibly slow rate.
The plan was politically toxic—a dream come true for Democratic messagers—and even Newt Gingrich denounced it. Ryan’s new plan co-authored with Wyden represents a major walk back from the ledge in two ways.
...