Contrast this plan with the Democrats’ health-care bills. Their legislation relies on cuts to Medicare for current retirees — and uses the proceeds to pay for a new entitlement instead of making the program solvent. These Medicare reductions would significantly affect the delivery of services to beneficiaries.
On the health-care tax-credit issue, Director Orszag is correct that eliminating the tax preference for employer-sponsored health insurance alters the health-insurance market. But there is consensus among health-care experts — even those in the administration — that the current tax treatment of health care is discriminatory and inflationary. In its analysis of the Roadmap, the CBO states that this change in the tax code reduces the number of uninsured primarily among low-income earners, as the current tax structure is most helpful to high-income workers.
On Social Security, the Roadmap provides seniors with the option either to stay in the traditional government-run system or to enter a system of guaranteed personal accounts. Neither option is privatized. In the personal-accounts system, the accounts are managed and overseen by a government board — not a stockbroker or private investment firm. People choosing the reformed system select from a handful of low-risk, government-regulated options — just as members of Congress and federal employees do.
Director Orszag is also mistaken that the tax plan in the Roadmap would shift the burden onto middle- and lower-income households. The Simplified Tax was designed to be just as progressive as the current code. It cleans out the tangled web of tax deductions and credits that are disproportionately used by the wealthy so that the tax base can be broadened and rates can be lowered. It also offers generous standard deductions so that a middle-income family of four pays no taxes on the first $39,000 of its income. More important, the business-tax changes in the Roadmap would deliver what all Americans seek at this time — increased job opportunities and higher economic growth.
The overall tax plan would also keep the tax burden in line with its historical average. Under the status quo, the tax burden would have to double in the coming years just to meet the government’s spending obligations. That revenue path would increasingly fall on low- and moderate-income individuals, would sink the economy, and would lead to a decline in living standards for everyone.
There are few paths forward more destructive, more painful, and more irresponsible than the one advanced by those clinging to the unsustainable status quo. There is consensus that entitlement reform is urgently needed, and I welcome constructive criticism of my plan — a CBO-certified plan that actually solves the long-term fiscal crisis. What is unaffordable and unacceptable, however, are political attacks unaccompanied by alternative plans. Those who would rather kick the can down the road are consigning the next generation of Americans to not only a broken social safety net, an inferior standard of living, and bankruptcy — but a future in which America’s best days are behind it.
– Rep. Paul Ryan represents Wisconsin’s 1st congressional district.