Give Republican Rep. Paul Ryan of Wisconsin credit. The House budget committee chairman has delivered a serious proposal to reduce the federal deficit and reform entitlements. The size of its ambition is overshadowed by the depths of its flaws, but it stimulates the discussion on the nation's long-term future. Now it is up to President Barack Obama and congressional Democrats to deliver another view with equal energy and vision, because the status quo is not sustainable.
In the broadest strokes, Ryan's budget blueprint for the next 10 years is not a radical departure from the Obama administration's. The Republican would spent $6 trillion less than the president, a difference of roughly 15 percent in total spending. Ryan would reduce federal spending to about 20 percent of gross domestic product; Obama would hold spending to under 24 percent of GDP. On the surface, at least, Republicans and Democrats appear to be in the same ballpark.
What is radical is Ryan's approach to cutting spending and his dismantling of the health care entitlement programs, Medicare and Medicaid, that are part of America's social compact. The Republican plan would repeal health care reform and financial regulation reform. It would encourage oil exploration, make the Bush-era tax cuts permanent and cut corporate tax rates. Instead of investing in education and public works projects, it cuts spending on student loans and infrastructure. Ryan's "Path to Prosperity'' is a march to mediocrity that relies on large spending cuts primarily in programs that help low-income Americans to help finance tax cuts largely benefiting the wealthy and big business.
Yet Ryan's overall message is correct: Washington has to get serious about reducing the federal deficit, and the nation cannot afford the escalating costs of Medicaid and Medicare as they are structured now. The cost projections are staggering as baby boomers retire, Americans live longer and health care continues to get more sophisticated and expensive. But instead of raising some new revenue or embracing a more sophisticated approach to measuring the outcomes of medical procedures vs. their costs, Ryan offers simplistic answers. He would slap arbitrary caps on the federal government's financial commitments, rely on competition in the health care industry to slow rising expenses and shift more responsibility to individuals for making medical care choices and paying the cost. It's not a fair trade.
Medicaid, the federal-state health care program for the poor, would turn into a block grant for states instead of an entitlement. Envision this future in Florida, where nearly 3 million residents already are on Medicaid: Washington sends Tallahassee a set amount of money, and Tallahassee pays a lump sum to managed care companies to care for the poor. Never mind how fast Medicaid rolls grow or how fast health care costs rise. That is a prescription for less care or no care at all for the poor.
Medicare, the health care entitlement for seniors, would morph into a subsidized private insurance program by 2022. Each senior would receive a subsidy based partially on his or her health and income, and each would shop for private coverage. But the nonpartisan Congressional Budget Office estimates those plans would cost significantly more than the subsidy, and seniors would pay a much larger share of the cost than they do now. Exempting everyone older than 55 from the changes is politically astute, but it does not hide the flaws in a plan that places too much faith in competition among private insurers and consumer choice to hold down costs.
Despite its serious shortcomings, Ryan's budget plan identifies the fiscal issues facing the nation. It frames the conservative approach to deficit reduction and entitlement reform. After the fight over the current federal budget concludes, it is up to the Obama administration and congressional Democrats to answer with their vision of the future so the national debate can commence.