PrintApril 14, 2011
Ryan's Budget or Bust
Everyone knew that releasing a plan to adjust, alter, or manipulate, social welfare programs was risking political suicide. Everyone understood then, and understands now, that the major programs are heading toward bankruptcy. However, in the last 30 years, Paul Ryan is the first to give an honest assessment and solution. The political attacks and outlandish claims of the left are appalling and untrue. The CBO, released a report that clearly defines the major problems this country faces.
In their assessment the CBO gives some astounding numbers: without any changes to current law, federal spending will equal over 28% of GDP and the debt held by the public will be 84%, by 2040. Contrast that with Paul Ryan’s budget, where CBO projects a budget surplus of .25% and the debt held by the public at 48% of GDP, by 2040. The stark contrast in numbers is achieved by limiting federal spending to 18% of GDP and adjusting benefits paid under Medicare. It is the latter that is causing the angst on the left.
Under the Ryan plan, it is true that the individual beneficiaries under Medicare would have to pay more out of pocket for healthcare, however, it is untrue that the President or Democrats in Congress can ensure that Medicare will be sustained without such “draconian” adjustments. Indeed, even the CBO doubts that Medicare can continue to pay out benefits, at todays levels, while still balancing the budget. CBO compared Ryan’s budget to two alternative scenarios and CBO noted that even if “revenues would reach higher levels relative to the size of the economy than ever recorded...payments to physicians under Medicare would be reduced well below current rates” under the two comparison plans. Furthermore, CBO noted that such reductions to physicians would “lead to reduced access to care or diminished quality of care for Medicare beneficiaries.” CBO clearly and blatantly said that such scenarios would make Medicare “difficult or impossible to sustain.”
On Wednesday, President Obama offered his “plan” during a 45 minute diatribe. His plan consists mainly of raising taxes to untold heights and continuing to redistribute wealth to the lower income brackets. Despite his claims, history clearly illustrates that taxes never only affect just one group; tax hikes on the rich will eventually reach the other brackets.
While I never agree with take hikes, there are two major problems with his argument. As stated earlier, CBO projects that even if revenues reach historically high levels, the federal government would continue to run deficits while pushing more of the direct costs onto seniors. Second, higher tax levels do not lower the cost of health but merely divert those costs to be carried through tax dollars. These subsidies will continue to raise the price of healthcare. Seniors and the poor, will be hurt significantly more under such a scenario as the price of healthcare continues to climb, taxes rise, and government assistance falls.
While I never agree with take hikes, there are two major problems with his argument. As stated earlier, CBO projects that even if revenues reach historically high levels, the federal government would continue to run deficits while pushing more of the direct costs onto seniors. Second, higher tax levels do not lower the cost of health but merely divert those costs to be carried through tax dollars. These subsidies will continue to raise the price of healthcare. Seniors and the poor, will be hurt significantly more under such a scenario as the price of healthcare continues to climb, taxes rise, and government assistance falls.
No matter which plan we chose seniors and the poor will ultimately have to pay a higher share of their health care cost. The only difference is, under Ryan’s plan it is phased in over two decades and leads to fiscal balance; under current law, and President Obama's plan, we just go bankrupt. You chose!
