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April 06, 2011

Why are the Ryan Proposals So (Politically) Self-immolating?

Harold Pollack

This is an actual question, not a rhetorical one.

I spent some time yesterday, before the Ryan proposals' details were fully known, writing something to slam the notion of converting Medicare into a defined contribution voucher program. I spent some time slamming the notion of block-granting Medicaid, too. As I was writing, I assumed that Ryan's proposals were actually more reasonable than they turned out to be. I figured that the unspecified details of Ryan's current plans would resemble the previous Ryan-Rivlin plan, in which the Medicare vouchers rising every year by the rate of GDP growth plus one percent, adjusted for population growth. I asked around. Most experts were assuming the same things, too....

Then last night, some colleagues and I were reading through the Congressional Budget Office's preliminary analysis, and we saw that Ryan wants these vouchers to rise at a much slower rate. Adjusting for the consumer price index and for population growth, the real annual rate of increase would be …zero. Because medical expenditures are rising much faster than inflation, Ryan's plan would produce striking cuts in Medicare benefits by 2022, cutting the predicted benefits by more than half by 2030.

This is crazy. I don't mean "crazy" in the sense that it is bad policy, or policy I didn't like.

I mean crazy in the sense that Ryan's proposals would self-immolate if anyone actually implemented them. They have already politically self-immolated, with self-avowed fiscal hawks and moderates abandoning them as soon as they understood what Ryan was proposing. Normally-moderate Isabel Sawhill offers scathing comments about it. Alice Rivlin—who was providing Ryan's ideological cover in this entire venture--jumped ship, too. The fact that Ryan threw a whopping regressive tax cut in there didn't help, either, and exposed him to a rather nasty filleting at the hands of Jonathan Chait.

In short, this seems politically incompetent.

If I were President Obama, I would put on my reading glasses, go on TV with some seriously boring Perot-vian powerpoints, and read aloud the juicy portions of the CBO report. Once voters understand what Ryan and his Republicans colleagues want to do, they won't like what they will see.

I'm puzzled by Ryan's approach. If one is exploiting public fears about entitlements and the deficit to attack pillars of American government, wouldn't it have been smarter to be more seductive, to present something that ends traditional Medicare without an obvious and huge benefit cut? That's certainly what the liberal conspiracy would have tried to do.

Ryan's proposals were never going to be implemented, anytime soon, anyway. They were put out there to frame political debate, to force Democrats to move right in response to Ryan's supposedly serious, adult conversation about the deficit. Instead Ryan's design of the thing gave the Democrats a huge political and policy argument for resisting Republican efforts to shut down the government.

I'm not really complaining. I'm just puzzled.


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