After nearly two years of slamming President Barack Obama for pursuing his radical agenda of economic recovery and incremental health-care reform, the Republican Party has finally offered a genuine alternative. Unfortunately, Rep. Paul Ryan's budget proposal has such deep cuts to health-care services and a single-minded devotion to tax cuts for the rich that it is also one of the most staunchly conservative policy proposals in recent memory.
As described by its author, the "Path to Prosperity" has three major component areas: spending, Medicaid reform, and health and retirement security. To reduce deficits, it brings spending down to 2008 levels and freezes it for five years. To reform Medicaid, it eliminates the federal parameters governing the program in favor of direct, no-strings-attached block grants to state governments. And to provide health and retirement security, it replaces Medicare with vouchers used to purchase health insurance on the private insurance market. Together, Ryan predicts, these changes would save $6.2 trillion over the next decade.
For a debt-worried public, this sounds fantastic. But closer examination reveals terrible consequences for the average person -- particularly for the disabled, as Ben Adler notes in the Prospect today. The plan's deep spending cuts would deprive millions of needed services, and its Medicaid restructuring would turn the program into a virtual slush fund for states, as lawmakers used their newfound freedom to direct funds elsewhere. (As a representative for the American Association of Retired Persons told Talking Points Memo, "A wholesale overhaul of Medicaid to block grants would likely lead to reduced benefits and eligibility.")
Even worse, Ryan's Medicare "reforms" would effectively end health insurance for seniors, as the cost of their medical care outpaced their ability to pay. In an analysis of a similar plan, the Center on Budget and Policy Priorities noted the cost-shifting that came with "voucherizing" Medicare: "It would not be prudent to count on massive additional savings from imposing much tighter limits on the growth in Medicare and Medicaid unless the growth in private health spending can also be slowed." In other words, system-wide health-care spending will continue to grow, even with massive cuts in Medicare and Medicaid. The only difference is that those costs would fall on hospitals, insurers, and individuals, rather than the federal government. Rather than provide "health and retirement security," Ryan's plan would price out seniors and poor people once their support ran dry.
This might be tolerable if Ryan's plan were a good-faith effort to place the United States on the path to fiscal sustainability, but that's far from the truth. According to the Congressional Budget Office's initial analysis, the GOP plan would increase public debt by 8 percent over the next decade. Why? In addition to offering entitlement cuts, the Path to Prosperity also locks in the current tax rate. Or, put another way, it permanently extends the Bush tax cuts, including those on high earners. Over a 10-year period, these lower rates will cost the government more than $4 trillion, which incidentally, are equal to the Medicaid cuts in Ryan's budget.
Far from writing a plan to fix our finances, Republicans have crafted a scheme to eliminate huge amounts of social spending on seniors, children, and the least well-off for the purpose of slashing taxes on the rich.
Unfortunately, the Ryan plan has seen nothing but praise from the gatekeepers of elite discourse. The New York Times' David Brooks effusively called it "the most comprehensive and most courageous budget reform proposal any of us have seen in our lifetimes," and Andrew Sullivan, now at The Daily Beast, unequivocally lauded Ryan's proposal as "serious." Other pundits have called the plan "bold," "gutsy," and "admirable."
With a Democratic Senate and a Democratic president, Ryan's plan is dead on arrival. But this was obvious from the beginning. The Plan for Prosperity was meant to start a conversation and tilt the field to the right. So far, it's been a success. Unfortunately, it also puts pressure on Democrats to accept steep budget cuts on the grounds that they aren't "Ryan-esque." Let's hope progressive legislators will stand strong and recognize that, with Medicaid and Medicare still enjoying widespread popularity, they have public opinion on their side. But judging from the last two years of policy battles, during which Republicans gained deep concessions despite the unpopularity of their positions, I won't hold my breath.