One of the Best Things About the Ryan Plan

by Veronique de Rugy

I agree with David Brooks’s piece yesterday that one of the best things about Chairman Ryan’s plan is that “it forces Americans to confront the implications of their choices.” Brooks writes:

If voters want taxes that amount to roughly 18 percent of G.D.P., then they are going to have to accept a government that looks roughly like what Ryan is describing.

The Democrats are on defense because they are unwilling to ask voters to confront the implications of their choices. Democrats seem to believe that most Americans want to preserve the 20th-century welfare state programs. But they are unwilling to ask voters to pay for them, and they are unwilling to describe the tax increases that would be required to cover their exploding future costs.

Raising taxes on the rich will not do it. There aren’t enough rich people to generate the tens of trillions of dollars required to pay for Medicare, let alone all the other programs. Democrats, thus, face a fundamental choice.

I think this is at the core of the problems we have today. Brooks goes on to say that if the Democrats want that spending, they must be willing to increase taxes on everyone, a lot.

I have to say that I have been very conflicted about the chairman’s plan. On the one hand, it is a great start, and it really gets the conversation going on how to reform Medicare and Medicaid and reduce the debt as a share of GDP. I admire the courage that it takes for the chairman to tackle these programs when no one before him dared to.

On the other hand, it doesn’t go far enough, in that it leaves defense spending and Social Security off the hook. I realize that many of you will disagree, but I don’t think that some areas of government should be protected from reviews and potential cuts, especially in the current budgetary and political context.

Also, I wish the plan didn’t continue to promise that everyone will get government money through Medicare. When the Congressional Budget Office scored the plan, it noted that under his reforms, most Medicare beneficiaries would have to pay more for their health-care costs, which was promptly repeated by everyone as evidence against the plan. And yet that’s not only mathematically correct, it’s morally correct.

I should add that while many of the details of Ryan’s FY12 plan have yet to materialize, it looks like Medicare’s premium assistance would be progressive — middle- and upper-income beneficiaries would get less. Yet the plan is still giving an entitlement above and beyond the original intent of the program, which was to help the poorest seniors. 

Here is a question to you: Does criticizing parts of the plan jeopardize our chances of ever seeing reforms take place? It is one of these moments when the perfect could be the enemy of the good?

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