Paul Ryan is the Republican idea man of the hour. Karl Rove endorsed Ryan's approach to budget reform on Glenn Beck, and whenever Republicans are asked about their preferred alternatives to the administration's deficit reduction intentions, Ryan's name and proposals are offered up. Hey, Republicans have ideas too. We don't need health care reform to reduce the deficit -- at least not yet.
Republicans -- particularly those running for president and those who
aren't elected officials -- love Paul Ryan when it's convenient. Why is
it, then, that only twelve members of the conference were willing to
attach their names to his bill -- and none from the leadership? One
reason is that Ryan is introducing it in his capacity as a member -- not
as the ranking member of the budget committee. (Ryan's official budget proposal
has been supported by the entire caucus -- but that isn't this.)
One theory: Republicans are worried about the political salability of Ryan's specific proposals, which are, in sum, the apeothesis of orthodox party economic policy -- policy that has been politically, if not substantively, discredited. (Ryan's response to some specific criticisms can be found here.)
Here's what Ryan would do:
-- Massive, across the board tax cuts. (Cue the familiar arguments about the tax code's progressivity and significant tax process simplification.) To balance out the revenue streams, Ryan would impose an 8.5% business consumption tax, which would, in theory, place more of a burden on middle class families than the rich, as the taxes would get passed along to consumers. Overall, it seems as if the rich would pay much less than they ordinarily would, and middle class families would pay more -- even though they'd pay less income tax. The effect of these changes to the tax code on overall revenue are disputed, and the CBO hasn't provided a full analysis yet. Depending upon assumptions, the government would either be adequately funded or starving.
-- Because deficit reduction is so intimitaely linked to health reform, Ryan would focus on reducing long-term burden of Medicare and Medicaid; the programs would be significantly revamped, and eventually significantly reduced, and while the level of benefits could remain the same, the way the benefits are delivered would change -- vouchers would be used to incentivize private insurance plan purchasing. They would be linked to income, which will save money, but premiums tend to rise more quickly than incomes. The criticism here is that Ryan's plans would lead to an enormous increase in the number of people buying private insurance (he'd replace the current tax exclusion for employer payments with tax credits given directly to individuals), and would significantly reduce the size of risk pools that allow health care costs to be distributed across a given population. Ryan maintains that he would still allow seniors the option of choosing a traditional Medicare plan, and that the criticism about his elimination of Medicaid and the State Children's Health Insurance Program is partisan.
--Ryan endorses a version of President Bush's partial privitization of Social Security, giving younger Americans the option of investing as much as a third of their money, and filling the multi-trillion dollar transition gap that would result by using general revenue. In other words, the rest of the government budget might have to be significantly cut in order to allow Social Security to be saved. (Ryan says this isn't necessarily true.) The CBO concluded that "traditional retirement benefits would be reduced below those scheduled under current law for many workers who are age 55 or younger in 2011." Benefits for current retirees would stay the same.
This isn't a non-serious plan. But Republicans don't seem to be ready to risk the accusation that they want to end Medicare (a very popular program), privatize Social Security (a non-starter), raise taxes on the middle class (by proxy) -- by affixing their name to a specific plan that does just that.
So the question for Republicans is: yes, Paul Ryan has a plan. But if you don't support it, then what, specifically, would you do to reduce the deficit over the long term?
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