The Agenda

Brief Note on Global Budgets and Defined Benefit vs. Defined Contribution

Clive Crook writes the following:

In a riskier world, and one where industrial-country demographic trends are unfavorable, public support for pensions and health care will need to be increased. In the U.S., the Republican Party has set its face against this. Its plans to contain the fiscal burden of Medicare, for instance, involve a gradual shifting of cost and risk to the system’s beneficiaries — adding to rather than offsetting the pressures that the economy will bring to bear in any event.

What he doesn’t recognize is that the Wyden-Ryan proposal, like Domenici-Rivlin proposal, is based on a very different premise, i.e., that today’s benefit will be preserved, yet that a global budget will be used as a backstop to protect taxpayers. The idea behind competitive bidding is that it will encourage providers, including public providers, to offer today’s benefit at lower cost. Crook’s critique applies to earlier versions of the Ryan Medicare reform than it does to its latest iteration, which makes the same assumptions regarding Medicare cost growth as the president’s budget. To the extent that there is a gradual shifting of cost and risk to the system’s beneficiaries, Republicans are moving in lockstep with the White House. 

Reihan Salam — Reihan Salam is executive editor of National Review and a National Review Institute policy fellow.

Most Popular

White House

The Failure of the Deal

EDITOR’S NOTE: The following is Jonah Goldberg’s weekly “news”letter, the G-File. Subscribe here to get the G-File delivered to your inbox on Fridays. Dear Reader (But especially Sammie), I had my say on the emergency declaration yesterday, and I’m sure I’ll have to say it all again not very far ... Read More
Politics & Policy

We’ll Regret This

Mitch McConnell says the president will sign the budget deal and he will also declare a national emergency to build the wall, as I expected. We’ll see the legal justifications he uses, but as a political and constitutional matter this is a long-term disaster. Oh, it might be good for Trump according to the ... Read More
Politics & Policy

Let’s Chill about Hate Crimes

‘Jussie Smollett, one of the stars of the television show ‘Empire,’ was attacked in Chicago by 2 assailants who yelled racial and homophobic slurs,” tweeted the New York Times on January 29. Mark the tone of absolute certainty about an unconfirmed claim. Many other news outlets took the same tack. ... Read More