Besides the repeal of Obamacare, the most controversial aspect of Ryan’s proposal will be his Medicare reforms. They will be controversial not because the policy itself is remarkably austere — it is in fact very mild — but because Democrats know from long experience that they can have a great deal of success frightening old people and their economically illiterate base with the specter of helpless grandmothers’ having their Medicare benefits snatched away. In reality, Ryan’s plan will affect nobody over 55 years old, and it will not necessarily affect anybody else, either: Ryan’s plan is to offer “premium support” — converting traditional Medicare benefits into a subsidy for buying health-care coverage in the private marketplace — as an option for those seniors who prefer it. The other option is Medicare. The politics of this are obvious: Democrats have had great success with Medicare demagoguery; Ryan’s plan to allow seniors the choice to substitute private insurance for traditional Medicare will make such cynical manipulation of the electorate’s fears much less effective.
On Medicaid, the Ryan plan would see the federal government continue to provide the bulk of the funding for the program through block grants, which would be administered at the state level — an important money-saving move, but also one that would be desirable regardless of its effect on spending: State legislatures and governors are better positioned to understand and respond to local conditions in their jurisdictions than are faraway Washington pooh-bahs.
Changes to Social Security will be necessary at some point, but they are not contemplated by the Ryan budget. They should be: Along with accelerating the schedule for Medicare reform, reforming Social Security would enable a balanced budget with smaller but more realistic cuts.
As a broad vision for the fiscal future of the United States, the Ryan budget would represent an important step in the right direction if it were to become law. Its structural reform of Medicare would do a lot to limit the welfare state’s cost while making it less bureaucratic; it would thus be a more important achievement even than eliminating the deficit in a decade. As a workable legislative package, the budget is in need of two pieces of companion legislation: The first order of Republican business is coming up with a practical vision for health-care reform to replace Obamacare after its repeal; the insecurity that many Americans feel with regard to their health-care coverage is acute and it is justified, and it is the reason we got Obamacare in the first place. Repealing Obamacare will be a knife fight; replacing it will be all-out war. But it must be done. The second task is for the tax-writing committees to flesh out the specifics of the broad reforms the Ryan budget envisions.
Critics will say that the Ryan budget is unserious because its enactment would require President Obama to sign off on the repeal of his hallmark legislation as well as swallow entitlement reforms that are inimical to his party’s political interests. But the reality is that the continuation of Obama-scale deficits into the indeterminate future creates a brake on economic growth, certainly in the long term and likely in the present. If Barack Obama wants to hold reform hostage to his own political interests, it is not Paul Ryan and the House Republicans who are unserious.