Ryan Streeter
The political reckoning over the Ryan budget has begun in earnest.
Last week’s statements by Tim Pawlenty and Newt Gingrich distancing themselves from Paul Ryan’s Medicare proposals marked a critical moment in the GOP’s nascent 2012 primary race. What they have said so far about how they would reform Medicare instead of the Ryan plan suggests they are not serious about confronting the root causes of the program’s out-of-control growth…at least not while they’re on the campaign trail.
Our nation’s fiscal condition requires extraordinary political courage from anyone hoping to run in 2012. To take on the deficit seriously means to have a credible plan for Medicare, which in turn means taking a lot of fire. Paul Ryan has shown he is courageous enough to put solutions before politics. Pawlenty and Gingrich, with their statements, are moving in the opposite direction.
Ryan’s plan would convert Medicare into a defined contribution program in which the amount a beneficiary receives each year is capped. By limiting the contribution up front, he would introduce competition into the system as seniors shop around for the best insurance option for their unique needs.
Ryan’s plan is not about “privatizing” Medicare as the left likes to say. It is about using competition and consumer choice to slow the growth of the program.
Pawlenty said that he would release his own budget soon with a different Medicare proposal that would “focus on ‘payment reforms’ that would direct money to doctors and hospitals for better healthcare outcomes.”
We will need to reserve judgment until he releases his plan, but “payment reforms” doesn’t sound promising. Trying to tweak the benefits end of Medicare will likely not slow the cost growth that is the heart of the problem.
Gingrich said that Congress should “move towards a 21st Century personal Medicare system that would allow seniors to choose, on a voluntary basis, a more personal system with greater options for better care.” Using the expression “21st century” doesn’t automatically make something cutting-edge. And “greater options for better care" sounds pretty expensive if there is no way of limiting the amount we offer for Medicare on the front end.
When I asked Yuval Levin in a ConservativeHome interview what the most important thing in health care reform should be, he said, “Two plain and boring words: defined contribution. That is the key to the conservative approach to reforming American health care.”
Yesterday, Michael Barone echoed the case for a defined contribution system in his Examiner column.
Defined-benefit policies assume a static society. But we live in a dynamic society, and defined-benefit policies cannot keep up with constant change...Defined-benefit pensions are now mostly a thing of the past, replaced by defined-contribution pensions that place some risk directly on individuals rather than promising them full protection that turns out to be highly risky when big entities out of their control fail.
We need to adjust defined-benefit public policies to shift some short-term risk to individuals while reducing toward zero the huge systemic risk that exists now.
While he's talking about pensions in this passage, the same statement could apply to Medicare. It is precisely the element of risk that we place “directly on individuals” that the left decries as unjust and that many on the right fear as politically lethal.
But this is where we are as a country. Our choice is not between keeping the program the same and tweaking it here and there. The choice is between reigning in the growth through what sounds radical (a defined contribution) or watching the program suffocate our economy. Slowing the process of suffocation - which is what will happen if we play around on the benefits end - is not a solution. If we don’t convert Medicare into a defined contribution program, we won’t be able to control its growth in costs, and the program will ultimately take down our country with it.
Candidates in 2012 need to talk about this openly and use the campaign as a way dispel myths, draw sharp lines of contrast with Obama, and prepare the public for reform. The American people can come around on this issue if we have high-profile candidates courageous enough to adopt real reform proposals. So far, Gingrich and Pawlenty look more like they're running to the foothills than into battle.
They need to increase taxes on the rich and cut their 800 billion a year defence budget to 1 billion tops. The top 1% in the US own 40% of all wealth. Disgraceful.
Posted by: Liberal | April 25, 2011 at 08:21 AM