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Rep. Ryan Responds to CBPP's Analysis of "A Roadmap for America's Future"
Thursday, March 11, 2010
Yesterday, the Center on Budget and Policy Priorities [CBPP] published an error-riddled attack on what remains the only proposed solution to our nation’s fiscal crisis – “A Roadmap for America’s Future.” Congressman Paul Ryan put forward this plan (H.R. 4529) to lift our nation’s crushing burden of debt, fulfill the mission of health and retirement security for current and future generations, and makes possible future economic growth and spurs sustained job creation. The CBPP report is the latest is a series of partisan demagoguery against Ryan and the Roadmap – reminding the American people why bold, serious solutions are so rarely proposed in Congress.
In reviewing the CBPP’s analysis, it is important to keep in mind the lengthy series of factual errors and misleading statements – including the following:
Tax Reform
Claim: CBO was directed not to score revenues for the Roadmap by staff. (pg. 2 - http://www.cbpp.org/files/3-10-10bud.pdf) Reality: False. In fact, Congressman Ryan and his staff did ask CBO to analyze both the revenue and spending provisions in the Roadmap. However, CBO declined to do a revenue analysis of the tax plan, citing that it did not want to infringe on the jurisdiction of the Joint Committee on Taxation (JCT). The JCT is responsible for providing the official revenue score of legislation before Congress. JCT, however, does not have the capability at this time to provide longer-term revenue estimates (i.e. beyond 10 years) that Ryan’s long-term solution requires. Given these functional constraints for an official JCT cost estimate, Ryan relied on its original work with U.S. Treasury Department tax experts to formulate a reasonable expected path for long-term revenues given the tax policies in the Roadmap combined with long-term expectations for economic growth.
Claim: The Roadmap does not bring in the amount of revenue specified to the CBO according to the Tax Policy Center, and therefore it does not reduce the deficit as is claimed. (pg. 2) Reality: The Tax Policy Center does not give official revenue estimates, and in their analysis admit to significant uncertainty and unfamiliarity with a proposal of this size and scope. The tax reforms proposed and the rates specified were designed to maintain approximately our historic levels of revenue as a share of GDP, based on consultation with the Treasury Department. Congressman Ryan stands by his numbers, and of course would be open to adjustments in the specified rates under his tax reforms if in fact TPC’s estimates are closer to reality than Ryan’s estimates. We clearly cannot chase our unsustainable growth in spending with ever-higher levels of taxes – and the purpose of the Roadmap is to get spending in line with revenue – not the other way around.
Claim: The Roadmap imposes no requirement that private insurers actually offer health coverage to Medicare beneficiaries at an affordable price. (pg. 10) Reality: Title III, Sec 301 of the Roadmap requires the Department of Health and Human Services to certify plans and publish an annual list of Medicare-approved plans, at least one of which must be targeted to the “special needs of Medicare’s highest cost seniors.”
Claim: The Roadmap provides no specific standards for Medicare benefits. (pg. 10) Reality: Title III, Sec 301 of the Roadmap defines qualified health coverage for Medicare. The Medicare reforms are modeled on the Federal Employees Health Benefit Plans – giving all Americans the health coverage options enjoyed by Members of Congress.
Claim: The Roadmap would eliminate most of Medicaid and the entire SCHIP program. (pg. 10) Reality: The CBPP described similar provisions in a health care proposal introduced by Democratic Senator Ron Wyden of Oregon (the Wyden-Bennett plan) as “converting Medicaid and SCHIP into effective supplemental wrap-around programs.” The CBPP provides two dramatically different descriptions of the same policy. This raises the question on whether CBPP’s analysis is dependent on the party affiliation of a proposal’s author.
Social Security Claim: The Roadmap privatizes Social Security (title and on pg. 12) Reality: The Roadmap makes no change for those 55 and older. It provides future retirees with the option to either stay in the traditional government-run system or to enter a system of guaranteed personal accounts. Neither option is privatized. In the personal-accounts system, the accounts are owned by the individual, and managed and overseen by a government board — not a stockbroker or private investment firm. People choosing the reformed system select from a handful of low-risk, government-regulated options — just as Members of Congress and Federal employees do.
Claim: The Roadmap’s inclusion of personal accounts requires $4.9 trillion in general revenue transfers, more than the entire Social Security shortfall. (pg. 13) Reality: The CBO concludes that the Roadmap reforms would result in zero general revenue transfers (pg. 44, Table C-1). The CBPP analysis either relies on faulty or outdated data – or is simply dishonest. Claim: CBO did not analyze the cost of the guarantee for personal accounts. CBPP estimates the cost of the guarantee would equal $2.9 trillion on a risk-adjusted basis. (pg. 14) Reality: False. The Roadmap guarantees that all Americans that choose to take part in the personal account option would get back at minimum what they’ve contributed, adjusted for inflation. The CBO explicitly modeled the cost of the guarantee for personal accounts, which they included in their cost estimates. The CBO makes clear that the Roadmap reforms – including the cost of this guarantee – makes Social Security permanently solvent. Claim: The Ryan plan would cut traditional guaranteed Social Security benefits compared to the benefits now scheduled to be paid. (pg. 12) Reality: The Roadmap reforms, in fact, increase benefits for low-income individuals, and places Social Security on a sustainable path through common sense reforms. To be clear, the current trajectory for Social Security would require a 24% cut in benefits or 31% increase in taxes on workers. Debt Claim: The Roadmap will lead to much higher debt levels through 2080 using Tax Policy Center revenue estimates (pg. 6, Figure 1) Reality: The Tax Policy Center did not produce a deficit or debt estimate for the plan. They did produce revenue estimates for FY 2010-2020, but not revenue estimates beyond 2020. Only “by extrapolating data” is CBPP able to manufacture higher debt levels, but these are not the estimates of the Tax Policy Center. To be clear, the debt level in 2080 – absent the enactment of specific entitlement reforms – would be a crushing 716% of GDP. As made clear by the CBO (http://www.cbo.gov/ftpdocs/102xx/doc10297/06-25-LTBO.pdf), our economy would collapse far before such levels would even be possible. To read Paul Ryan’s Roadmap: http://www.americanroadmap.org Full plan: http://www.roadmap.republicans.budget.house.gov/plan/ Congressional Budget Office Analysis: http://cboblog.cbo.gov/?p=466 Full CBO analysis: http://www.cbo.gov/ftpdocs/108xx/doc10851/01-27-Ryan-Roadmap-Letter.pdf Highlights of CBO analysis: http://www.roadmap.republicans.budget.house.gov/News/DocumentSingle.aspx?DocumentID=169718
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