Critical Condition

Newt Gingrich Makes Mitt Romney Look Good

Yesterday on Meet the Press, former House speaker Newt Gingrich had some interesting things to say about health-care policy and entitlement reform — and by “interesting” I mean that it’s hard to see how, after his remarks, he can continue to be considered a plausible conservative spokesman on health policy.

When host David Gregory asked Gingrich for his thoughts on Paul Ryan’s Path to Prosperity, Gingrich called it a “radical” plan that amounted to “right-wing social engineering”:

I don’t think right-wing social engineering is any more desirable than left-wing social engineering. I don’t think imposing radical change from the right or the left is a very good way for a free society to operate… I’m against Obamacare, which is imposing radical change, and I would be against a conservative imposing radical change.

So what’s Newt’s grand plan for reining in runaway entitlement spending? The old 1970’s classic — waste, fraud, and abuse:

I think we need a national conversation to get to a better Medicare system with more choices for seniors.  But there are specific things you can do. At the Center for Health Transformation, which I helped found, we published a book called ‘Stop Paying the Crooks.’ We thought that was a clear enough, simple enough idea, even for Washington. Between Medicare and Medicaid, we pay between $70-120 billion a year to crooks.

Stopping waste, fraud, and abuse would be a good thing, except that waste, fraud, and abuse are inherent in government-run systems. Unless institutions and individuals have an economic incentive to root out waste, as they do in the free market, it will never happen. As a platform for Medicare reform, merely aspiring to “Stop Paying the Crooks” is unserious.

Gingrich explicitly defended Mitt Romney’s advocacy of the individual mandate:

I agree that all of us have a responsibility to help pay for health care. I think that there are ways to do it that make most libertarians relatively happy. I’ve said consistently we ought to have some requirement that you have health insurance or you post a bond or in some way you indicate that you’re going to be held accountable. It’s a variation on [the individual mandate]…I don’t think that having a free rider system in health is any more appropriate than having a free-rider system in any other part of our society.

The so-called “free-rider” problem is a manufactured one: it is an artifact of unfunded government mandates, for which the prescribed solution (forcing everyone to buy comprehensive insurance) is overkill, and requires massive taxpayer subsidies that far exceed the cost of uncompensated emergency care.

What’s funny about Gingrich’s fusillade against Paul Ryan is that Gingrich had a substantially different opinion of Ryan’s plan six weeks ago. Here’s Byron York quoting from an interview of Gingrich by Bill Bennett on April 5:

At that time, Gingrich was full of praise for the Ryan budget. “Paul Ryan has stepped up to the plate,” Gingrich said. “This is a very, very serious budget and I think rivals with [what] John Kasich did as budget chairman in getting to a balanced budget in the 1990s, just for the scale and courage involved…Paul Ryan is going to define modern conservatism at a serious level,” Gingrich continued. “You can quibble over details but the general shape of what he’s doing will define 2012 for Republicans.”

As David Gregory noted on Sunday, back in 1993, Gingrich advocated a Swiss-style system that was even bolder than the Ryan plan: “I am prepared to vote for a voucher system which would give individuals on a sliding scale a government subsidy so to ensure that everyone as individuals have health insurance.”

Clearly, Gingrich’s health policy positions have been all over the place. While we’re on the subject, however, it’s worth noting what Gingrich actually achieved on health care while he was Speaker of the House. His two most consequential pieces of health care legislation were passed as part of the Balanced Budget Act of 1997: the creation of the State Children’s Health Insurance Program, or S-CHIP; and the imposition of the Medicare Sustainable Growth Rate, or SGR.

S-CHIP, at the time, was the largest entitlement expansion in a generation, and is today one of the fastest-growing components of government spending. Effectively, it expanded Medicaid to cover uninsured children in families whose incomes were too high to qualify for traditional Medicaid.

The Medicare Sustainable Growth Rate, a revision of an old system called the Medicare Volume Performance Standard, required that increases in Medicare spending could not exceed GDP growth. If spending did exceed GDP growth, Congress would be authorized to cut payments to doctors and hospitals so as to bring spending in line. However, since 1997, both Republican and Democratic Congresses have overridden the required cuts, resulting in endless “doc fix” legislation. Even more perniciously, the fiction of SGR-driven Medicare cuts has introduced a massive accounting gimmick into government budget projections, making our future budget deficit seem much smaller than it actually is.

Gingrich says he opposes both “right-wing social engineering” as much as “left-wing social engineering.” But when he was in office, he actively supported left-wing social engineering. So what does that make him now?

— Avik Roy is an equity research analyst at Monness, Crespi, Hardt & Co., and blogs on health-care policy at The Apothecary. You can follow him on Twitter at @aviksaroy.

Avik Roy — Avik Roy is the President of the Foundation for Research on Equal Opportunity (, a non-partisan, non-profit think tank.

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