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Right Turn
Posted at 05:47 PM ET, 11/03/2011

Romney: More specifics on critical conservative reforms

In informal remarks in New Hampshire today, an op-ed in USA Today and in a speech before Americans for Prosperity in Washington D.C.on Friday Mitt Romney provides some new details on his fiscal agenda. In USA Today, Romney writes:

Any turnaround must begin with clear and realistic goals. By the end of my first term, I will bring federal spending as a share of GDP down from last year’s staggering 24.3% to 20% or below. This level is in line with the historical average and nears the tax revenue our economy generates when healthy. With economic growth of 4% a year, meeting this goal will require approximately $500 billion of spending cuts in 2016, and that would still allow us to undo the Obama administration’s irresponsible defense cuts.

He provides some guidance on where the money is going to come from:

•Repeal ObamaCare, which would save $95 billion in 2016.
•Eliminate subsidies for the unprofitable Amtrak, saving $1.6 billion a year.
•Enact deep reductions in the subsidies for the National Endowment for the Arts, the National Endowment for the Humanities, the Corporation for Public Broadcasting and the Legal Services Corporation.
•Eliminate Title X family planning programs benefiting abortion groups like Planned Parenthood.
•End foreign aid to countries that oppose America’s interests.
. . . .I will block grant Medicaid and workforce training, saving well over $100 billion in 2016. . . .
•Reduce the federal workforce through attrition and align compensation with the private sector, saving over $40 billion by 2016.
•Repeal the Davis-Bacon Act, a union giveaway that artificially raises costs for government projects, and save taxpayers more than $10 billion a year in the process.
•Attack rampant fraud in government programs by enacting far stiffer penalties for those who steal from taxpayers. Cutting improper payments in half could save more than $60 billion a year.
•Consolidate, eliminate and streamline federal departments, agencies and offices following a stem-to-stern review.

That is some helpful clarity, the most we have heard from any of the the candidates to date. But what about entitlements other than Medicaid?

On Medicare and Social Security, Romney says, “Reforms should not affect current seniors or those near retirement, and tax hikes should be off the table. However, the retirement age for younger workers should be increased slowly to keep up with increases in longevity. And Social Security benefits for higher income recipients should grow at a slower rate than for those with lower incomes. Tomorrow’s Medicare should give beneficiaries a generous defined contribution and allow them to choose between private plans and traditional Medicare. And lower-income future retirees should receive the most assistance. I believe that competition will improve Medicare and the coverage that seniors receive.”

If he is serious, this is certainly a step in the right direction. For the first time in his campaign he explains not simply what ideas are possible, but what he will do on Social Security. (He leaves out loopy ideas like borrowing a plan from Chile or devolving it to 50 states). He’s willing both to raise the retirement age and index benefit increases for richer Americans.

But Medicare is the real news in this preview. What he is suggesting is in fact a small modification of Rep. Paul Ryan’s plan. Ryan’s premium support plan offered only private insurance options for Medicare beneficiaries; Romney says people could also select traditional Medicare.

Ryan in the spring was asked if he’d be comfortable with this:

Newt Gingrich suggested that future seniors (those now younger than 55 scheduled to get a Medicare subsidy when they turn 65 under Ryan’s plan) should have the option to stay in the current Medicare system. What’s wrong with that?
“I don’t have a problem with that,” Ryan replies. “I think it’s a fine idea worth considering. [Bill Clinton’s budget director] Alice Rivlin and I have talked about that in the past.”
But could his budget achieve the same amount of savings if future seniors had that choice?
Ryan says it’s possible “because it wouldn’t be an open-ended fee for service system, like the current one for the under-55 plan. They would get a set amount of money to go toward the traditional fee for service and then, like current Medicare they’d probably buy coverage to supplement it. I would think a person would prefer a comprehensive plan like Medicare Advantage is today, but you can do this in a way that doesn’t have a budgetary effect, that it doesn’t bankrupt the program.”

This is also the most concrete suggestion we’ve had from a candidate on Medicare reform to date. If he can put some meat on the bones, he may go some distance in convincing conservatives that he is willing to undertake an ambitious conservative reform agenda. (Somewhere Ryan is smiling, I am certain.)

Two sources not associated with the campaign tell me that they believe a more comprehensive Medicare plan may be in the offing from Romney’s campaign. It’s not on the boards for tomorrow, but we’ll get some further explanation of Romney’s thinking.

The Romney campaign declined to comment. But, as one conservative entitlement guru put it, entitlement reform in the Romney scheme of things isn’t simply a budget-cutting exercise. “Medicare reform is about saving and strengthening a critical program.” If so, that would be a bold and somewhat risky venture by a politician who’s not known for his political risk-taking.

By  |  05:47 PM ET, 11/03/2011

 
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