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Democrats & The Ryan Budget -- 500,000,000 Seniors and One Billion Children Will Die

By Gary Starr for the Neville Awards
Apr. 8, 2011

According to Democrats 500,000,000 seniors and 1 billion children will die if the Ryan Budget passes. Of course that is after we starve grandma and then throw her down the stairs while stuffing kids in microwaves.

Really, it's true. The Democrats said so. It must be true. It has to be true....

Debbie Wasserman Wasserman Schultz Schultz Schultz (D-Fla): “Seniors would pay more and more each year for their health insurance. No longer would Medicare be a guarantee of health insurance coverage. Instead Medicare would become little more than a discount card. This plan would literally be a death trap for seniors.

Nancy Pelosi (D-CA): Following a long-honored tradition, Republicans are masking the true impact of just what the GOP FY 2012 budget will do. Chairman Paul Ryan and House Republicans may claim their budget leads us down a “Path to Prosperity,” but the rhetoric doesn’t match up with the reality. Here are the facts on just what the GOP budget means for our country:
  • Path to eliminating guaranteed benefits for seniors under Medicare
  • Path to subsidies to oil companies and giveaways to special interests
  • Path to tax breaks for the wealthiest Americans and companies that ship jobs overseas
Rep. Louise Slaughter (D-N.Y.): "This is probably one of the worst times we've seen because the numbers of people elected to Congress. I went through this as co-chair of the arts caucus," Slaughter said. "In '94 people were elected simply to come here to kill the National Endowment for the Arts. Now they're here to kill women."

....the usual communist/socialist/progressive/liberal lies that they've been trotting out since Lenin walked the earth. The fact is that, last year, when Democrats ran everything, they were too cowardly to pass a 2011 budget with even more spending than 2010. They didn't want to face the voters with that albatross hanging around their necks.

The Democrats got their asses kicked anyway. Now it's crunch time. A government "shut-down" looms and the Democrats are running around yelling that the Ryan Budget is the end of the world. Crying wolf no longer works.

So what will happen if the government shuts down. Not much.
  • Social Security payments and unemployment benefits will continue.
  • Mail deliveries will continue as usual.
  • Air Traffic Controllers will remain on the job.
  • Troops in the field will continue to be paid.
  • The State Dept will still provide emergency consular services. Other services, such as travel visas and passports could be delayed.
  • National parks will close.
  • And the last shuttle flight could be delayed. Of course now that Nasa's mission has changed from space exploration to Muslim outreach, who really cares except Achmed and Mohammed.
Common sense from the Wall St. Journal:

The Ryan Resolution-The most serious attempt to reform government in a generation

APRIL 5, 2011

Well, so much for dodging entitlements. This year's trendy complaint, shared by the left and the tea party, that Republicans hadn't tackled the toughest budget issues was blown away yesterday with the release of House Budget Chairman Paul Ryan's budget for 2012. We'll now separate the real reformers from the fiscal chickenhawks.

Mr. Ryan's budget rollout is an important political and policy moment because it is the most serious attempt to reform government in at least a generation. The plan offers what voters have been saying they want—a blueprint to address the roots of Washington's fiscal disorder. It does so not by the usual posturing ("paygo") and symbolism (balanced budget amendment) but by going to the heart of the spending problem, especially on the vast and rapidly growing health-care entitlements of Medicaid and Medicare. The Wisconsin Republican's plan is a generational choice, not the usual Beltway echo.

That choice is clear enough by comparing the Ryan blueprint with the 2012 budget that President Obama rolled out only two months ago. The nearby charts show the difference in federal outlays overall and as a share of GDP over the next decade. Mr. Ryan proposes to spend $6.2 trillion less, return spending to its modern average of roughly 20% of GDP, and add $4.7 trillion less to the national debt.

Mr. Obama would keep spending at 24% of GDP even before ObamaCare fully kicks in, while running annual deficits of $600 billion a year or more despite trillions of dollars in tax increases.

Some House conservatives are grousing that Mr. Ryan's proposal doesn't cut spending enough to balance the budget in 10 years. This is a foolish complaint. Mr. Obama will be happy to balance the budget too—at 24% of GDP, which means far higher taxes. Republicans should keep their eye on what Milton Friedman understood was the real burden of government, which is spending.

The Ryan plan would chop $179 billion from the 2012 White House budget and another $241 billion in 2013. This would be the largest two-year savings since the demobilization of the military after World War II. Mr. Ryan would cut funding for corporate welfare and hundreds of ineffective programs, reform agriculture subsidies, reduce the federal work force by 10% and repeal ObamaCare, among other good ideas.

Mr. Ryan's budget would reduce federal borrowing to 2% of GDP by 2017, which is a manageable level of new debt and a huge improvement from the roughly 10% of GDP the Treasury is borrowing now. Given the epic hole we are in, this would be a historic achievement.

As for entitlements, the House GOP wants to let the states run Medicaid in return for an annual fixed payment or "block grant," letting Governors experiment with ways to save money and provide better care. This is the way welfare was successfully reformed in the 1990s, and it would give states more control over their fastest-growing budget item.

On Medicare, the Wisconsin Republican would phase in reforms for Americans under 55 years old. Medicare currently pays doctors and hospitals directly on a fee-for-service model that is price-controlled and increasingly unaffordable. Fewer doctors want to see Medicare patients and, among other deficiencies, it lacks true catastrophic coverage.

Mr. Ryan would create a "premium support" system in which government would pay a subsidy of roughly $15,000 to private insurers chosen by seniors. This means at age 65 you would be able to keep your same insurer, with the feds paying for that insurance instead of your employer. That would slow the growth of spending over time through competition and senior choice, rather than continue on Medicare's current path of government-rationed care.

Tackling Medicare is the politically riskiest part of this budget, as Democrats are already returning to their old stand of denouncing any change as a "war on the elderly and poor" (as Illinois Democrat Jan Schakowsky put it). These are the same Democrats who oppose smaller spending cuts on grounds that entitlements are where the real money is. The truth is they want only token spending cuts of the kind that Mr. Obama's budget offers.

For that political reason, Mr. Ryan decided not to walk point on Social Security, though everyone knows that retirement entitlement is also unsustainable with $17 trillion in unfunded liabilities. As a policy matter, Social Security is also the easiest problem to solve—change the benefit formula, means test benefits, raise the retirement age, and more. But you can't blame Republicans for dodging at least one political buzzsaw if Mr. Obama is going to continue to dodge all fiscal responsibility.

Unlike many Republicans and some in the tea party, Mr. Ryan understands that the budget can't be balanced with spending cuts alone. Above all, we need faster economic growth to drive higher incomes and more revenues. So Mr. Ryan also proposes a tax reform that would cut the U.S. personal and corporate tax rate to 25%, in return for eliminating loopholes and credits that allow companies like Whirlpool and General Electric to pay little tax.

Chairman Dave Camp has been pushing a similar reform in the tax-writing House Ways and Means Committee, and he deserves credit for letting Mr. Ryan roll it out as part of the budget. Republicans will have a better chance of winning the fiscal argument if they keep explaining that their reforms are essential to reviving growth and raising middle class incomes.

Since they only control the House, Republicans can't expect to pass all or even most of these reforms this year. But in rising to meet our main fiscal challenges, they are honoring their pledge to voters last year and offering voters a serious governing platform. Mr. Ryan is showing Americans that there is an alternative to Mr. Obama's vision of the U.S. as a high-tax, slow-growth, European-style entitlement state.

The GOP political bet is that this debate won't be another replay of 1985, 1995 or 2005 because the political times have changed. Our fiscal problems are far deeper, and Mr. Ryan's hope is that the American people realize this and are willing to reward politicians who address those problems, rather than politicians who say we can keeping spending and borrowing ad infinitum.

Republicans in Congress will need to rise to Mr. Ryan's occasion, and in particular so will GOP Presidential candidates. The first voter test for those candidates should be which of them are missing in action from the debate that House Republicans are kicking off. If we fail to reform the entitlement state now, we will do it eventually. But the price and pain will be so much greater.

Medicare for a New Century_Paul Ryan's plan would modernize a program stuck in 1965

APRIL 6, 2011

Liberals seem delighted that Paul Ryan and the GOP have decided to charge the fixed bayonets of Medicare reform, denouncing the new House budget as a crime against seniors, humanity, and so on. Republicans are taking a huge political risk, but they are now setting the reform agenda, and their honesty may even oblige a national debate about the future of an entitlement state that can't survive in its current form.

Mr. Ryan's core insight is that Medicare needs to be modernized if it is to survive. The federal insurance program for the elderly has barely changed since 1965, several health-care revolutions and trillions of misspent tax dollars ago. The GOP plan—known as premium support—would rationalize Medicare's burden on taxpayers, while introducing market competition to control costs.

As Democrats build their re-election bids around Mediscare demagoguery, they're pretending that the choice is between "privatization" and a free lunch. Mr. Ryan has done a service in exposing this illusion. Nothing will sooner finish off "Medicare as we know it" than to continue its present march into insolvency. His is the first credible plan endorsed by either party for preserving the safety net.

Today traditional Medicare is the largest buyer of health care in America. It is also the worst buyer. The government sets prices for thousands of services, then pays nearly any doctor or hospital that a patient visits. The same arbitrary fee schedule applies to the best hospital and the worst hospital, regardless of the quality or value of the care delivered, and the bills are sent to taxpayers.

This deliberate suppression of the price mechanism has helped to turbocharge U.S. health costs. Providers who find ways to deliver better medicine at a lower cost aren't rewarded, as they would be in any other industry. Medicare spending is growing at a 7.2% annual clip, far faster than the economy. Spending is due to double over the next decade, feeding on more and more of the federal fisc and national wealth. (See the nearby chart.)

The 45 million Medicare beneficiaries enjoy the security of "free" health care and its no-questions-asked payments. Still, the entitlement is stuck in a Great Society time warp. It offers no protection against catastrophic expenses, the most basic function of insurance. Coverage doesn't keep up with medical progress; prescription drugs weren't added until 2003. Seniors are docked a $1,000 deductible for a single hospital stay, though nine of 10 buy medigap coverage to backfill these and other holes. Where else do people buy insurance for their insurance?

Under the Ryan premium support model, seniors would instead choose from a menu of guaranteed private insurance options of the kind younger, private-sector workers have come to expect. These plans would be subsidized by a "defined contribution," roughly equal to what the government now spends per person. This subsidy, about $15,000, would grow over time with consumer prices, but seniors who wanted more expensive plans would pay the difference out of pocket.

Premium support would create a market reward for the services that consumers value. Because seniors would be chipping in at the margin, only above the fixed-dollar subsidy, most would favor lower premiums. Insurers would compete to supply them, and providers in turn would have a reason to innovate in health-care delivery and improve what has been their negative productivity rate.

Premium support would not cure all of America's health ailments, and missing in action in the House budget is a comparable reform for the rest of the market. But Medicare is so big that if it doesn't change, nothing else can. Simply unwinding Medicare's price controls would be an historic achievement.

That said, Granny will not be turned loose unsupervised into the market wilds. The subsidies will flow through Medicare, only to regulated insurers and government-approved plans. It does not go as far as Mr. Ryan's previous "roadmap," which offered direct cash vouchers for individuals who preferred to buy insurance themselves. The subsidies are means-tested, so the poor would receive more support, as will sicker and chronically ill patients. They wouldn't kick in until 2022, more than enough time for people to adapt and exempting everyone older than 55 if they wished.

Mr. Ryan moderated his ambitions not merely because the fiscal crisis is so urgent, but because reforms of this order are so unusual. Seniors and other voters may be unnerved, especially when AARP and politicians beat the Mediscare drums. As they inspect the details, however, seniors may be surprised to learn that premium support is not an untested idea. It is even routine in parts of Medicare itself.

Traditional Medicare would look a lot like Medicare Advantage, which gives almost one of four seniors today private alternatives. Premium support forms the architecture of the Medicare drug benefit too, and as a result it has cost 30% less than almost anyone predicted.

The same concept governs the Federal Employee Health Benefits Program, which insures everyone from postal workers to Members of Congress. The same is true for several large university systems and Calpers, the benefits program for public workers in California. None are known as incubators for the pitiless ideology that Democrats impute to Mr. Ryan.

Despite this experience, one common criticism is that the subsidies wouldn't keep pace with the rising health costs that Medicare now promotes. But medicine has always proven adept at reorganizing itself when the incentives change, and costs would fall over time if more patients were demanding their money's worth.

Health care's lack of accountability to consumers helps explain why Medicare's unfunded liabilities over the next 75 years are about $31 trillion. That number is beyond human comprehension and among the reasons that creating one more new entitlement in ObamaCare was so reckless. Keeping Medicare's generational promise—that children assent to be taxed to pay for their grandparents' health care so that their grandkids can one day pay for theirs—would mean under current trends that every income tax rate, in every bracket, would need to more than double.

The brutal arithmetic is that total federal health spending is about 10% of GDP today and on pace to hit 15% in 20 years. The liberal response is more central planning and eventually the political rationing of care, even as taxes continue to climb. The alternative that Mr. Ryan has offered, including an ObamaCare repeal and a conversion of Medicaid into block grants to states, would bring that share down to 6% as premium support began to limit Medicare's open-ended spending.

The reality that Mr. Ryan has recognized is that Medicare can't be fixed with nips and tucks. Premium support is easily as important an advance as the shift from defined-benefit pensions to 401(k)s, and the transition could be as smooth. Major changes to the social compact must be grounded in some rough public consensus, and Republicans now have an obligation to persuade the country that their reform is the only one with a chance of saving Medicare for future generations.
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