August 15, 2012

Paul Ryan

So who is Paul Ryan, and what are his plans for America? As near as I can figure, he is first and foremost a policy wonk. That's not such a bad thing. Nobody was better at rattling off numbers and facts than Bill Clinton, and he worked out okay. The question is what do Ryan's numbers all add up to?

The best place to find out is the budget Ryan, in his role as chairman of the House Budget Committee, put forward to much hoopla last March. Ryan will be subtly rounded and smoothed to better fit into the Romney campaign, but the March budget is pure Ryan. This is his claim to fame. This is why he was nominated. This is what he will press for in White House meetings if elected to the vice-presidency. It is a plan that I think would change America as we know it today. Judge for yourself.
  • First, taxes would be changed to a two-tiered rate system of 25% and 10%, the effect being to reduce revenues by some $4.6 trillion over the 10 years. These cuts would be offset by "broadening the tax base." This is wonk-speak for eliminating tax deductions. The plan doesn't say which tax deductions would go, but certainly the mortgage deduction would have to be among them if anywhere near the numbers he suggests for revenues are to be achieved. Ryan's plan also eliminates the Alternative Minimum Tax, cuts the 35 percent corporate rate to 25 percent and eliminates taxes on foreign profits.

  • Second, there would be a large increase in defense spending and a major reduction in all other government spending (as a percentage of the total economy) to levels that existed prior to the New Deal. Under Ryan's budget, the government would consist mostly of Medicare, Social Security and defense spending. Everything else would be cut to levels that would profoundly alter the ways in which the federal government operates. The trickle-down effects on state governments are unknowns at this point, but there will be a huge impact one way or another.

  • Third, Medicare would end in 2022, to be replaced by a new plan for people born after 1956, with new enrollees receiving vouchers to buy private insurance. The annual increase in Medicare voucher payment rates would be smaller due to changes to the present system for calculating increases.  Already, hospitals are issuing dire warnings about the impact these changes would have on their ability to treat Medicare patients. Medicaid would become a program of block grants to states. President Obama's Affordable Care Act would be repealed. Social Security is left to the perennial-favorite bipartisan committee to solve.
The plan, like all budget plans, was dead on arrival. It will never be passed and was never intended to be passed. It was intended to draw a political line in the sand, the point of the spear that would be used to attack Obama's failure to cut the debt. The immediate effect of Ryan's budget was to completely undercut the deal the Republicans agreed to after last year's debt crisis, a deal that would balance cuts evenly between defense and other spending. Ryan's plan puts the thumb heavily on the domestic side on the scale. Democrats immediately cried foul, raising questions as to the trustworthiness of Republicans as bargaining partners. You will hear lots more about this in the upcoming debate over Taxmageddon.

Now that Ryan is on the ticket, the plan's greater significance is in what it reveals about the mindset of a man who wants to be a heartbeat away from the presidency. This is a guy who wants to reshape America as it has evolved since Franklin Roosevelt's New Deal. This is a guy who takes his ideas very seriously. Maybe this appeals to you. I find it alarming, but then I tend to be conservative when it comes to radical change.

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