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Right Turn
Posted at 05:24 PM ET, 04/12/2011

Paul Ryan’s desperate critics

The Democrats have a problem. They can’t abide by the notion that we have to spend less on entitlement programs in order to solve our long- term debt, so rather than offer their own plan they’ve resorted to name-calling and straw-man arguments.

Ezra Klein, for example, deems Rep. Paul Ryan’s plan a “joke,” accusing him of failing to raise taxes (well, yes that’s true) and of savaging “programs serving the poor.” Actually, Ryan would impose means-testing of the rich on Medicare and give block grants to the states to try to more effectively manage health services delivered to the poor. If we do nothing, of course, these plans will collapse. A Ryan spokesman had this to say:

The CBO warns that if policymakers don’t take action to save Medicare, taxes “would reach higher levels relative to the size of the economy than ever recorded in the nation’s history, payments to physicians under Medicare would be reduced well below current rates, and payments to other Medicare providers would grow more slowly than the cost of their inputs; nevertheless, federal debt would continue to grow relative to GDP.”

Ezra also pronounces, “The wealthy, meanwhile, would see their taxes lowered, and the Defense Department would escape unscathed.” These assertions are wrong. The president preserved the Bush tax cuts; the Republicans propose keeping rates where they are and going after corporate welfare that benefits the rich. In a revenue-neutral reform with lower rates, itemized deductions (which benefit the rich) would be removed or limited. Ezra is also wrong on defense. On this Ryan and the president agree to implement the cuts proposed by Defense Secretary Robert Gates.

But Ezra is hardly alone. The liberal objections seem to be based on the false premise that there is some alternative to slowing the rate of growth of entitlement programs. However, the president’s advisers, CBO chiefs, former Obama officials and the debt commission agree that if Medicare and Medicaid continue growing at their present rates, the programs will collapse. Far from dooming these programs, Ryan is at least trying to salvage them. On his Web site he explains:

One of the biggest reasons health-care costs have been rising so fast lately is that government programs such as Medicare and Medicaid suffer from flaws that cause health-care costs to rise much too fast. They are open-ended spending programs — meaning that there are no meaningful controls on program costs. And because Medicare and Medicaid account for nearly 50 cents of every dollar spent on health care in the United States, these rising costs are causing inflation throughout the system.

Inflation throughout the system, in turn, is driving government spending on health care even higher. This is why a broad consensus of non-partisan economists and experts say that the U.S. government is heading for a crisis caused by excessive spending and debt. Failure to take action and save these programs poses the greatest threat to the health and retirement security of America’s seniors.

This doesn’t have to happen. We can fix these programs with common-sense reforms. Double-digit inflation in the cost of health care doesn’t have to be a fact of life. Frankly, we should refuse to accept it. Personalized Medicare helps solve a problem that affects everyone – the problem of relentlessly rising health-care costs in America.

Critics might not like the idea that we will have to spend less on entitlements, but Obama has bought into the argument by cutting Medicare and empowering the Independent Payment Advisory Board to ”control costs,” which means to limit the amount spent on Medicare.

If critics want to insist that any cut in Medicare is unacceptable, they shouldn’t have cheered for Obamacare, and if they think we can keep spending as much as we have on Medicaid, they are living in a dream world. No wonder they were frantic at the notion that Obama might endorse the Simpson-Bowles plan. The commission, of course, recognized that both these programs and Social Security as well need to be curbed in order to be saved.

By  |  05:24 PM ET, 04/12/2011

Categories:  Budget

 
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