A Roadmap to Better Health Care
Government "engineering" is no match for a functioning marketplace.


James C. Capretta

It’s not often that a single member of Congress generates as much media interest and debate as Wisconsin representative Paul Ryan has with “A Roadmap for America’s Future.” But, given the document’s focus and the political moment, the attention is entirely understandable. This is truly a case of a man with a plan in the right place at the right time.

The most serious medium- and long-term economic challenge our nation faces is that the federal government has committed itself to spending far more than it can collect in taxes. Most of this excessive commitment is in the area of entitlements. Social Security, Medicare, and Medicaid are already expensive — their combined cost to the federal government is expected to hit 9.8 percent of GDP in 2010. But they are set to become simply unaffordable in coming years with the retirement of the baby-boom generation and the continued rapid escalation of health-care costs. By 2030, federal spending on the Big Three is expected to reach 14.4 percent of GDP, according to the Congressional Budget Office.

When this explosion in entitlement spending occurs, the federal budget will already be badly out of balance. The Obama administration is planning to run budget deficits of $1.6 trillion this year and $1.3 trillion next year. (From 1789 through 2008, the federal government borrowed $5.8 trillion total.) Much of this spending is in response to the fiscal crisis, but if it continues, federal borrowing will exceed $18 trillion by 2020, with $1 trillion–plus budget deficits piling more debt on top every year thereafter.

Enter Paul Ryan. “Roadmap” is a comprehensive plan to head off such a crisis. Ryan’s goals couldn’t be more ambitious. He wants to restructure the nation’s middle-class entitlement programs to eliminate their unfunded liabilities, ensure a secure retirement for future generations, and make world-class health care a reality for one and all. Further, he wants to pay for a reformed and affordable welfare state with a tax system that promotes, rather than punishes, entrepreneurship and growth.

Bold as Ryan’s ideas are, they aren’t new. In fact, he released his first “Roadmap” in 2008. It got some attention then, but nothing compared to the wall-to-wall coverage version 2.0 has enjoyed since its release in January.

What’s different this time around is that the last two years have seen such explosive growth in federal spending and government activism that it looks as if the window for restoring some semblance of restraint might soon close. That’s why George Will, Robert Samuelson, and Michael Gerson have all devoted full columns to the Ryan plan and its implications, and have rightly lauded the congressman for taking on a challenge that is plainly central to the continued economic vitality of the nation.

Elected Democrats and their allies have also taken note of Ryan’s proposal. Their main interest seems to be, as usual, in scaring seniors about supposed Republican “privatization” plots. In particular, liberals are focusing their anti-“Roadmap” fire on the proposal to convert the Medicare entitlement for those currently under age 55 into a system of fixed contributions toward the purchase of insurance.