JONATHAN CHAIT APRIL 27, 2011
Paul Ryan, in an interview with CBS News, offers up the latest incarnation of his budget spin. Ryan is a very smooth front man, and has skillfully employed carefully crafted language worked out by a team of pollsters, but -- being in the position of defending wildly unpopular priorities -- he is offering up a stream of misleading and outright false claims. Here's Ryan:
Since Ryan is nothing if not robotic in repeating his talking points, it's worth examining his spiel in some detail, as he will be repeating versions of this for the next year and a half.
1. Asked if he is "trying to balance the budget on the backs of the poor and the elderly," Ryan replies:
We're saying to anybody who's 55 or above, 'No changes to your Medicare whatsoever.'...
We're saying save Medicare by reforming it for people who are 54 and below by working it like a system just like members of Congress and employees have.
The biggest problem here is that Ryan turns the question into one entirely about Medicare. He imposes a massive, disproportionate share of his cuts on programs that aid the poor and elderly, yet -- unless CBS edited out this portion of his answer from its web video -- he evades the issue of the poor completely. Indeed, many elderly people rely upon Medicaid for their health care, and Ryan subjects them to large, short-term cuts.
His claim that he would make Medicare like what members of Congress enjoy is likewise false:
[I]f the rate of growth under this Medicare proposal were applied to federal employees’ most popular health option, the Blue Cross Blue Shield Standard Option, federal workers, including members of Congress, with family coverage would have to pay another $3,330 for the care they enjoy today. Those with individual coverage would have to pay another $1,555.
Moreover, his assurances that leaving Medicare unchanged for those over 55 while phasing it out for those younger will never effect current beneficiaries are almost certainly false. The destabilization he introduces into the current system will eventually make it impossible for beneficiaries of traditional Medicare to find providers.
2. Ryan asserts that the alternative proposal is to allow the Independent Payment Advisory Board to "just indiscriminately cut Medicare."
This is not a defensible description of the board. IPAB is charged with finding wasteful practices within Medicare. By law it cannot "include any recommendation to ration health care, raise revenues or Medicare beneficiary premiums…increase Medicare beneficiary cost- sharing (including deductibles, coinsurance, and co- payments), or otherwise restrict benefits or modify eligibility criteria." Jonathan Cohn rebuts this bit of demagoguery in greater detail.
3. Ryan says his planned changes to Medicare "Use the ideas that have worked before -- bipartisan ideas, premium support, to fix Medicare in the future."
In fact, Ryan's plan is not premium support, according to the health care expert who invented premium support. The "bipartisan" label refers to the support of Alice Rivlin to an earlier health care plan she co-sponsored with Ryan. Rivlin says Ryan's current plan won't work. Ryan knows Rivlin does not support this version of his plan but he keeps calling it bipartisan anyway.
4. Ryan insists he's not cutting taxes for the rich. This is based a string of highly shaky assumptions. One of those assumptions is that Ryan would pay for reducing upper-bracket tax rates by closing loopholes for the rich." Ryan says:
The tax reform we’re proposing is just like the tax reform the president’s bipartisan fiscal commission is proposing — supported by a majority of Democrats on the fiscal commission.
Not true. The bipartisan commission proposed to end the preferential treatment of capital gains, a major source of income for the rich and a major factor in the tax code's progressivity. Ryan's plan proposes, in the form of buzzwords easily understood by tax wonks, to widen it:
Raising taxes on capital is another idea that purports to affect the wealthy but actually hurts all participants in the economy. Mainstream economics, not to mention common sense, teaches that raising taxes on any activity generally results in less of it. Economics and common sense also teach that the size of a nation’s capital stock – the pool of saved money available for investment and job creation – has an effect on employment, productivity, and wages. Tax reform should promote savings and investment because more savings and more investment mean a larger stock of capital available for job creation.
This is a crucial difference that makes his plan unlike Bowles-Simpson. It's possible to reduce tax rates to around 25% while leaving the tax code as progressive as it is right now if you close the capital gains loophole. Ryan wants to make it bigger. That will mean lower effective rates for the rich.
In any case, his misrepresentations of his tax plan aside, Ryan is hiding behind a lawyerly construction. Even if you accept every point at face value, he is proposing large-scale sacrifice upon most Americans, and enormous cuts on programs for the poor, while allegedly keeping tax rates on the rich constant. He has reasons to do this -- he believes that returning tax rates on the rich to Clinton-era levels is unfair and harmful to the economy. I believe he's wrong about that, and the public overwhelmingly rejects his priorities. So, rather than admit it outright, he's playing hide the ball.