Having long criticized Mitt Romney for being too vague and risk averse in laying out how he would address the country’s major fiscal problems, I have to say that I was very impressed with what he had to say in
today’s speech on spending, and especially with what he had to say about Medicare reform.
Some further thoughts and details below the fold:
A willingness to speak plainly about the scope of Medicare’s immense fiscal problems and to offer serious solutions is an absolutely essential test of seriousness for anyone who wants to be a leader on the national stage today. Our long-term debt problem is almost entirely a health-care cost problem, and therefore in turn a Medicare problem. Most congressional Democrats deny the very existence of the problem, or insist that Obamacare will fix it when in fact Obamacare promises only more of the same inefficiency and price controls that have caused Medicare’s woes. President Obama has at times noted the scope of the problem and acknowledged that, despite Obamacare’s enactment, “If you look at the numbers, then Medicare in particular will run out of money and we will not be able to sustain that program no matter how much taxes go up.” But he has refused to consider any steps that could actually address that problem.
It has been clear for many years what such steps would need to look like. Medicare’s “fee-for-service” payment system, which creates horrendous perverse incentives throughout the health sector, would have to be transformed into a “premium-support” system that, by providing seniors with a choice of private coverage options rather than a public monopoly, would create consumer pressure in a competitive insurance market and so create powerful incentives for efficiency and cost-effectiveness in health care.
The bipartisan Breaux-Thomas commission proposed such a reform in the 90s, but it was not pursued. House Republicans offered such a proposal in the Ryan budget in April, and almost all the Senate Republicans then voted for it too. Paul Ryan also offered a slightly different version of the idea together with Democratic budget guru Alice Rivlin as part of the Bowles-Simpson commission, and Rivlin then offered yet another similar idea together with former senator Pete Domenici in the fiscal commission they co-chaired for the Bipartisan Policy Center. The response from President Obama and congressional Democrats, however, has been unmitigated demagoguery, seeking to scare seniors about the Ryan plan (even though it would not affect current seniors or anyone near retirement today) and generally send the message that serious structural reform of Medicare was unacceptable.
The question all year has been how the Republican presidential candidates would approach the issue. Would they take up the challenge of making the case for a premium-support reform—trying to cut through the Democrats’ noise machine to explain to today’s seniors that nothing would change for them and showing tomorrow’s seniors why more choice in a more efficient system would be a better way to get comprehensive coverage? Or would they avoid the political risk and stick to vague platitudes and trimming around the edges? A reform of this magnitude could not succeed without the support of a president who had made clear before being elected that he would pursue it, so a great deal depends on how the candidates decide to proceed.
It is now clear that essentially all of them have made the right choice. Several (like Rick Santorum and Jon Huntsman) have endorsed the Ryan plan. Others (like Rick Perry and Newt Gingrich) have backed different versions of premium support in general terms. Until today, Mitt Romney had said that while he would sign the Ryan budget if it came to him, his own Medicare plan would be different.
In today’s speech, Romney began to lay out what that plan would like look, and the details are promising. The fact sheet put out by the campaign along with the speech puts it this way:
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Nothing changes for current seniors or those nearing retirement
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Medicare is reformed as premium support system, meaning that existing spending is repackaged as a fixed-amount benefit to each senior that he or she can use to purchase an insurance plan
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All insurance plans must offer coverage at least comparable to what Medicare provides today
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If seniors choose more expensive plans, they will have to pay the difference between the support amount and the premium price; if they choose less expensive plans, they can use any left over support to pay other medical expenses like co-pays and deductibles
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“Traditional” fee-for-service Medicare will be offered by the government as an insurance plan, meaning that seniors can purchase that form of coverage if they prefer it; however, if it costs the government more to provide that service than it costs private plans to offer their versions, then the premiums charged by the government will have to be higher and seniors will have to pay the difference to enroll in the traditional Medicare option
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Lower income seniors will receive more generous support to ensure that they can afford coverage; wealthier seniors will receive less support
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Competition among plans to provide high quality service while charging low premiums will hold costs down while also improving the quality of coverage enjoyed by seniors
Of the various versions of premium-support proposed this year, this comes closest to the Rivin-Domenici plan, particularly because it offers fee-for-service Medicare as an option in the new system along with the private insurance options. The purpose of doing so is basically to smooth the transition for seniors, and to answer the charge that the reform would “end Medicare as we know it.” A form of it remains an option, but it can’t throw its weight around and force price controls on providers, so over time it would very likely grow more expensive and so less appealing and seniors would move away from it. Ryan didn’t include this option in his versions of premium support, though he has said he would have no problem with a plan that did.
The major question still unaddressed in the details released today has to do with how the rate of growth of the premium support payment would be set—whether there would be some pre-set rate tied to inflation or GDP growth (as all the plans proposed this year had) or whether it would be set by competitive bidding among insurers so that the market would set the pace of change and the risk would be borne by the government rather than seniors (as the Breaux-Thomas commission proposed and as
I frankly think would be preferable). That’s not a small detail, but it is a detail: As a general matter, Romney has committed himself to a very bold and absolutely essential course of reform. And he has done so in greater detail (and so in a sense to a greater extent) than any of the other candidates—taking himself from most vague to most clear on this critical issue in one speech.
It can now be plainly said that the Republican Party is committed to facing up to the problems of Medicare and to a smart and plausible path toward fixing them—a path that many centrist Democrats also understand is necessary. On an issue that carries significant political risk, an almost-total consensus of the party’s elected officials and high-office seekers have taken the responsible path rather than the easy one.
The other ideas presented in Romney’s speech were also on the whole quite encouraging. He proposed to raise the Social Security retirement age and introduce greater means testing into the program (though I think it would be better to do this using the lifetime-earnings calculations Social Security already uses rather than based on income). These two reforms would make a big difference, and it’s good to see Romney (like Perry last month) stepping up with ideas for reforming both of our old-age entitlements—even the Ryan budget steered clear of Social Security. He also proposes block-granting Medicaid, significant cuts in domestic discretionary spending, and a variety of institutional reforms of the federal bureaucracy. If he combines this with an equally serious and straightforward tax-reform agenda as part of a plan to encourage economic growth and job creation, Romney could really claim the mantle of the conservative reformer in this race.
I have to say, for all of its eccentricities, and for all the conservative policy innovators who seemed like they might run but then chose not to, in terms of policy this is actually shaping up to be a very constructive and useful primary season. It is moving Republicans in the right direction on a series of crucial fronts—although not yet on every front. They still have not directed their appeals to the middle class sufficiently, and they have not given enough thought to a replacement for Obamacare. Perhaps most important, I think they still lack the right language for expressing the vision that unites their various policy proposals—the language of dynamism and growth in opposition to the stagnation that has been the defining feature of this final chapter in the story of the dying liberal welfare state. While the Democrats beat their chests over how equitably they plan to divide up the flesh of the economy once they have killed it, Republicans need to focus on reviving and growing it so that all could have more. We are instead still mired in the language of austerity—which is neither very attractive nor the best justification for any of the particular reforms that increasingly compose the conservative agenda.
One step at a time, I suppose. But we have seen some major steps in recent months, and today’s was definitely among the more important of them. Good for Romney.
Isn't at some level Romney essentially little more than a pathological liar?
How can anybody that values some logical consistentcy want to go stand in line to vote for Romney?
What's so hard about identifiying some core values and sticking with them, especially when you are a man well into your 50's and 60's?
What kind of precendent are we setting if we nominate a politician as shifty and disengenous as Romney has been? Are we not rewarding dishonesty in politicians if we reward Romney with the nomination?
If Romney wins, what does he have a mandate to do, since nobody knows exactly what he supports and what he opposes?
It's amazing the lack of scrunity of Romney in general. Don't you poli sci Republican pundits think it would be better to have a candidate that the conservative base is at least somewhat excited about supporting?
Reply to this commentLinkReport AbuseThere is no issue more important to conservatives than entitlement reform. Romney's plan is the best I've seen, and I will vote for him. If you prefer a motivational speaker, with no experience, you are free to vote for him...but that's what got us into this mess three years ago.
Reply to this commentLinkReport AbuseWhat happened three years ago? Are you reckoning entitlement bloat with the ascension of Barack Obama? That is an unserious assertion, friend. Obama didn't cause this problem. It has been many decades in the making. Romney's plan may strike you as the best you have seen (and as yet it is a speach, not a plan) but it is still quite short of what is necessary. Shall we vote for that and get "conservatism" slandered with the responsibility? That is the best case scenario of a Romney Presidency on the subject.
Reply to this commentLinkReport AbuseMatt X,
If a perfect consistency is what you're after I'm afraid you can't even hold the God of the bible to your standard.
Thou shalt not kill...
Thou shalt utterly destroy...
I know it would cause you to reconsider some who you have perhaps disowned ideologically to open your world view this way, but I neither believe God is a pathological liar, nor Mitt Romney.
However, one who insists on your way of framing things, which I consider incorrect, would find both to be inconsistent liars.
Reply to this commentLinkReport AbuseTruth is an important issue. You just labeled this man as a pathological liar. Back it up with facts. Please provide a list of lies. Where has the man lied? You may or may not agree with his positions. But a liar is a real problem. I would like to know how the man should be characterized as a liar.
I'm all ears.
Reply to this commentLinkReport AbuseWow. Ever heard of constructive criticism. Probably not. People can complain about what they wish were true all they want but at the end of the day we have what we have and Romney is certifiably smart and has achieved much success in business and government (see Bain and the Olympics). I prefer the full part of the glass myself. I'm getting more and more excited for the day when Romney puts his ideas up against Obamas because I think he'll whup him good. IMO better than anyone else running on our side --- and that's gonna have to do or we're looking at 4 more years of H. E. Double Toothpick.
Reply to this commentLinkReport AbuseRomney does not strike me as dishonest in the slightest. Certainly your use of the term pathological is hyperbolic and not really all that persuasive.
I very much value logical consistency and will very gladly be standing in line to vote for Romney.
Your concern that someone would alter their opinions at 50s or 60s is a bit too judgmental in my mind. Reagan, in his younger years, held views similar to where Romney was back in the 1990s, then he moved to a more conservative viewpoint later in life. If Reagan is held out as a paragon of conservatism why is Romney ridiculed for having traveled a similar path? I think the answer is a simply that those who are mocking Romney are doing so for political advantage. Some of the negative stuff said about Romney is exaggerated; some is downright dishonest and becomes amplified in the echo chamber of the conservative blogosphere.
I have studied Romney’s statements about his changes in opinion and have found his explanations credible and consistent for many years now.
By the way, Romney has not enjoyed a lack of scrutiny as you have suggested. He is constantly under withering attack as a RINO on nearly every conservative website and radio talk show.
Reply to this commentLinkReport AbuseSo you would have voted against Reagan, who changed his mind on abortion in his 60s, correct?
>>>"If Romney wins, what does he have a mandate to do, since nobody knows exactly what he supports and what he opposes?"
Read his book. And read this speech. When you put your policies in writing, you are committing to what you support.
>>>"It's amazing the lack of scrunity of Romney in general."
It's amazing you can make such an ignorant statement. No candidate has had more scrutiny than Romney.
Reply to this commentLinkReport AbuseFrom this post, I think it's safe to say that Mr. Matt X will not be voting for Romney this primary season...Just my guess.
Hey NRO, maybe it would be wise to dedicate an entire section on your website where people like Matt X and Teflon 93 could visit frequently to vent their anti-Romney screeds, embed their clever gotcha videos, and chat amongst themselves. I think it would be a very therapeutic way to bring peace to their lives.
Reply to this commentLinkReport AbuseHow can you claim, "If Romney wins, what does he have a mandate to do, since nobody knows exactly what he supports and what he opposes?" as part of the comments section of an article where Romney specifically spells out what he will do, and the author of the article explicitly commends Romney for taking up the mantle of "Conservative reformer" who will be elected with a specific mandate?
Do you realize how ignorant you sound?
Romney is certainly not a liar, and I will gladly vote for him for the GOP nomination. He's the best candidate we have for turning this economy around and beating Obama!
Reply to this commentLinkReport AbuseIt's a shame Romney is too much of a coward to just commit to balancing the budget.
Reply to this commentLinkReport AbuseMatt, I also find it interesting that you phrase things as, "Are we not rewarding dishonesty..."
As if someone with a few hundred million in net worth is interested in being rewarded. I really do not think power is what Romney is after. I may be mistaken, on this, but unlike someone like Obama who is looking for an ideological evolution/revolution, or someone like Clinton who is obsessed with government and power someone like Romney seems to me like someone who wants to solve problems and is looking for feasible solutions to do so.
Reply to this commentLinkReport Abuse"Romney has committed himself to a very bold and absolutely essential course of reform. And he has done so in greater detail (and so in a sense to a greater extent) than any of the other candidates—taking himself from most vague to most clear on this critical issue in one speech."
Agree with you here. I thought Mitt was masterful today.
I think that Mitt is the strongest candidate to get this implemented with his wonderful history of being able to work with both consrvative Democrats and Republicans.
Also with Mitt's superior communication skills he'll be the best to bring understanding to the American people.
"and they have not given enough thought to a replacement for Obamacare."
I disagree with you here. Mitt Romney in May of this year put out a very detailed plan regarding repealing and the replacement of Obamacare in a his healthcare speech at the University of Michigan Cardiovascular Center.
Reply to this commentLinkReport Abusesheryl, you're right, Romney has amazing communication skills. I especially like this video and how clearly he articulates his positions.
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"very detailed plan...in a his healthcare speech"
A speech is not a detailed plan. Can't be, unless you're Obama.
Reply to this commentLinkReport Abuse"Our long-term debt problem is almost entirely a health-care cost problem"
This is true.
But it really puts the lie to the whole "Obama spending us into ruin on purpose" thing.
Did you really mean to do that at NRO???
Reply to this commentLinkReport Abuse"Our long-term debt problem is almost entirely a health-care cost problem"
Statement regarding the future.
"Obama spending us into ruin on purpose"
Statement regarding present and past.
There is no discrepancy between the two statements.
Reply to this commentLinkReport Abusesheryl, you know I love you (don't tell Politico I said that) but I do want to remind people that you are the woman that said we should vote for Romney because he is smooth like the Don Draper character on a Mad Men (although you modified that after I pointed out that his character isn't an admirable one).
Now go doctor my tea would you? :)
Reply to this commentLinkReport AbuseYour secret is safe with me Matt X :)
You are almost right representing my views but not quite. I didn’t actually say it was the reason to vote for him, I was just giving my views of who Mitt reminds me of though in all fairness I did say Mitt reminded me a bit of a Jimmy Stewart character as well some aspects of Don Draper’s character.
But physically…come on…..Mitt at the same age as Draper…puh-lease these two could easily be in the “separated by birth” category....handsome men!
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Reply to this commentLinkReport AbuseGiven Romney's flip floppy persona, I estimate he'll try to implement about 50% of his plan and change positions on the other 50%.
Reply to this commentLinkReport AbuseThe problem with a serial liar is you simply can't trust what he says at any given time.
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Romney in particular has presented himself to liberal Democrats as someone who is "one of them" and will govern as a liberal even if he has to talk like a conservative from time to time.
Watch what he DOES. Don't listen to what he says. He will simply say anything to be president.
Which is why he must never be.
Reply to this commentLinkReport Abuse