Nine Points About the
Republican Budget

Why Paul Ryan’s “Path to Prosperity” just might succeed


Avik Roy

There’s been an avalanche of commentary on Paul Ryan’s “Path to Prosperity,” and rightly so. Ryan’s proposal, which would reform entitlement spending, balance the budget, and begin paying off the debt, is the most important legislative proposal of my lifetime. It may not pass in its current form. But there is a much better chance than you’d think that it will pass in modified form, perhaps under another president. Either way, it will change the way we talk about the deficit and the debt for a very long time.

The plan is quite comprehensive, encompassing discretionary spending, defense spending, financial regulation, Fannie and Freddie, tax reform, welfare programs, and Medicare and Medicaid. (As David Brooks puts it, PTP “dodges Social Security,” which is acceptable, given Social Security’s lesser impact on our long-term fiscal problems.)

As for getting debt under control, here’s what the Congressional Budget Office had to say about the “Path to Prosperity”:

The resulting budget deficits under the proposal would be around 2 percent of GDP in the 2020s [down from 9 percent in 2010] and would decline during the 2030s. The budget would be in surplus by 2040 and show growing surpluses in the following decade. Federal debt would equal about 48 percent of GDP by 2040 and 10 percent by 2050.

And Yuval Levin has put together some nice charts, based on the CBO numbers, that show how dramatically PTP changes our country’s fiscal trajectory, relative to both current law and the Obama budget.

Much of the criticism — some of which came even before anyone knew the proposal’s details — has been plainly dishonest. Josh Marshall of Talking Points Memo described the “Path to Prosperity” as “getting rid of Medicare.” Incoming DNC chairman Debbie Wasserman Schultz called it a “death trap for seniors.”

That’s not to say that Representative Ryan’s plan is perfect. No proposal of its scope and ambition could ever be, and Ezra Klein has a good bullet-pointed summary of the “Path to Prosperity” from the liberal perspective. So let’s sift through the most controversial aspects of the plan: those related to health-care entitlements. It’s going to be a rather wonky exercise, though I’ve done my best to make it readable by breaking it up into bite-sized chunks.

But first, I have three words for those who disapprove of Ryan’s approach: Where’s your plan? If you think that slowing the growth of Medicare and Medicaid spending is a bad thing, which taxes would you raise instead? If you actually favor Medicare and Medicaid cuts, but using government-dictated rationing instead of individual choice, could you please explain why? And this is, at heart, why Ryan’s bold stroke just may work: by forcing his critics to produce an honest alternative.

1. Paul Ryan is not a mass murderer.

Most thoughtful people understand that it’s demagogic and dishonest to say that PTP will “get rid of Medicare,” act as a “death trap for seniors,” kick the poor onto the street, etc. But just for good measure, let’s confront these assertions with facts.

Consider this: According to 2008 figures from the OECD (the latest year available), public-health expenditures per capita in the United States were the third-highest in the world: $3,505. Bear in mind that that’s only government-sponsored care, which in the U.S. covers only about 30 percent of the population. By comparison, single-payer stalwarts such as France and Germany cover their entire population for $2,875 and $2,870 per person, respectively; market-oriented Switzerland achieves the same for $2,735.

Hence, the assertion that slightly reducing the growth of Medicare and Medicaid will jeopardize the health care of Americans is difficult to justify. Every other developed country in the world with a functioning health-care system spends far less than we do, and many of them, Switzerland especially, achieve comparable results.



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