Over the past week, one of the biggest pieces of news was that Republican presidential hopeful Mitt Romney named Wisconsin House Representative Paul Ryan as his running mate.
The Ryan appointment will have a ripple of effects, but this appointment largely shifts the political dialogue to one thing: the federal budget.
As The Daily Beast puts it, Ryan is the man “many Republicans revere as the intellectual leader of the party’s drive to shrink government.” Appointing Ryan signifies a doubling down on conservative ideals on Romney’s part.
All the same, Romney hasn’t issued a substantial budget plan of his own and may not do so before the election. So, to understand the potential impact of the VP appointment, let’s play a thought experiment.Ryan is probably best known for his plan to slash the federal budget. Admittedly, the campaign has said that Romney will put together his own deficit-cutting plan rather than use Ryan’s proposal wholesale.
Let’s just say Paul Ryan’s budget proposals and general economic ideology came to pass. What would that mean?
What This ‘Budget Proposal’ Is, Anyway
The budget issue originally came up around determining the federal budget for next year. Paul Ryan played a very prominent role in crafting the Republican budget proposal, which went under the name “The Path to Prosperity.” (Sometimes people would even call it the “Ryan budget.”) No Dems voted for it, and it eventually got rejected in the Senate.
Although the intent of the plan is to cut the federal budget deficit, the plan contains areas for spending cuts in addition to tax cuts—which means that the spending cuts are counterbalanced with decreased revenues. The nonpartisan Congressional Budget Office predicts the Ryan plan would get the budget balanced in about 28 years, the LA Times reports; Ryan predicts his plan would balance the federal budget by the 2020s because it would spark a lot of quick economic growth.
So what’s in this infamous plan?
Medicare: Fixed Vouchers for Seniors
This is the most famous and contentious part of Ryan’s budget: Each senior citizen would get a fixed amount of money, basically a voucher, to either buy private insurance or sign up for Medicare. The vouchers might cover the full cost of Medicare, especially in the early years, but there’s no guarantee. If seniors’ health costs exceed the voucher amount, they’d have to cover it themselves.
Supporters like the plan because it reduces government spending and encourages seniors to find more competitive plans. Detractors argue that old sick people aren’t the best comparison shoppers, and can be easily misled into buying bad plans. This could also incentivize insurance companies to create easy, cheap plans for young healthy seniors and leave the oldest, sickest patients for Medicare, which will have to soak up the costs.
The public was so alarmed by this plan last year that Ryan had to backtrack and release a slightly different version of the proposal … under which a typical elderly beneficiary could pay as much as $6,400 in additional costs in the year 2022.
But hold up! Will this really come to pass?
The Romney campaign recently said it would restore funding to Medicare, andrepeal cuts to the program instituted by Obamacare, in addition to leaving Social Security intact. Not only does this contradict Ryan’s budget—which Romney doesn’t have to go with, of course—but it also makes Romney’s math difficult. He’s promised that federal spending will be less than 20% of GDP by 2016, which means cutting $6-$7 trillion over the next decade, even more than in Ryan’s plan.
How could he make those cuts but spare Medicare and Social Security?
The Center on Budget and Policy Priorities, according to Ezra Klein at The Washington Post, determined that would require cutting every other government program by an average of 40% in 2016 and 57% in 2022 (including education, veterans’ benefits, transportation and more). Considering that Romney is currently shying away from the least popular parts of Ryan’s budget, this makes commentators like Klein believe that Romney’s budget plan is a fantasy.
But since we don’t have a comprehensive plan from Romney, we return to Ryan’s proposal …
Paul Ryan: What Do You Need to Know About Mitt Romney's New VP? | LearnVest
0 comments:
Post a Comment