For one thing, Ryan’s savings all come from cuts, and at least two-thirds of them come from programs serving the poor. The wealthy, meanwhile, would see their taxes lowered, and the Defense Department would escape unscathed. It is not courageous to attack the weak while supporting your party’s most inane and damaging fiscal orthodoxies. But the problem isn’t just that Ryan’s budget is morally questionable. It also wouldn’t work.
Don’t take it from me. Take it from Robert Reischauer, who directed the Congressional Budget Office from 1989 to 1995 and now leads the Urban Institute. “If this is a competition between Ryan and the Affordable Care Act on realistic approaches to curbing the growth of spending,” Reischauer says, “the Affordable Care Act gets five points and Ryan gets zero.” But Ryan would repeal the Affordable Care Act and replace it with his own wishful plan. In doing so, he makes it harder, not easier, for us to balance the budget.
To understand why Reischauer gives Ryan a zero, you need to understand the technical trick that gives Ryan his savings. His proposal says the federal government’s contributions to Medicare and Medicaid can’t grow at more than the rate of inflation. Then he told CBO to score his plan based on that assumption. That’s where his money comes from. But it’s nonsense.
Health-care costs don’t grow at the rate of inflation. Ever. Previously, Ryan acknowledged that. His Roadmap capped federal contributions between inflation and the actual cost of medical care. He then developed a more bipartisan version of the idea with Alice Rivlin, who founded the Congressional Budget Office and directed the Office of Management and Budget under Bill Clinton. That one was capped at the growth of GDP plus 1 percentage point. Both targets were far more plausible than the fantasy target Ryan is now using.
So why the switch? He has not said. I suspect he couldn’t make the numbers add up without tax increases. The problem now, however, is that his numbers don’t add up at all. Rivlin — a budget hawk’s budget hawk — has abandoned the proposal that Ryan says she helped write. “The growth rate is much, much too low,” she says.
Rivlin’s worry is that Ryan’s plan won’t control costs so much as shift them to seniors. And the CBO agrees with her. It concluded that Ryan’s privatization plan would actually add to Medicare’s costs. In 2030, traditional Medicare insurance, CBO estimates, would only cost 60 percent as much as the private options Ryan is offering. But under Ryan’s plan, seniors would pay two-thirds of the cost, while under traditional Medicare, they’d pay only 25 percent.