Budget Roadmap RSS Articles

Paul Ryan on ABC World News with Diane Sawyer

Wed, 26 Jan 2011 18:40:00 GMT

Paul Ryan says he sees controlling the debt as a moral obligation. "I would say that what is draconian is doing nothing and lying to the American people about these fiscal problems that we have," he said.

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CMS Chief Actuary on reducing health care costs

Wed, 26 Jan 2011 05:00:00 GMT

At one point, Foster indicated that he had more confidence in Chairman Ryan’s proposed Medicare reform plan to bring down costs than he has in the new health care law’s ability to do the same:

“If you can put that pressure on the research and development community, you might have fighting chance of changing the nature of new medical technology in a way that makes lower costs like this possible and more sustainable.

“I would say that the Roadmap has that potential. There is some potential for the Affordable Care Act price reductions, although I’m a little less confident about that.”

The Future of Health Care Reform: Paul Ryan’s “Roadmap” and Its Critics

Fri, 03 Dec 2010 05:00:00 GMT

Abstract: The future of health care in America looks grim—but it does not have to be. Representative Paul Ryan (R–WI) has proposed “A Roadmap for America’s Future”—the only comprehensive plan in Washington that deals with the looming fiscal and economic crisis, driven by ever-increasing government spending on health care. Ryan’s Roadmap would reduce the deficit, allow Medicare to become truly sustainable, establish equity and efficiency in the federal tax treatment of health insurance, and improve access to health care for middle-class and low-income families. Congressman Ryan’s critics have accused him of trying to destroy the Medicare system and claim that the Roadmap will increase the deficit. While they may have honed the harshness of their rhetoric, they have not offered a comparable alternative. Heritage Foundation health policy experts explain how the Ryan Roadmap would really work, and how it would benefit Americans.

Printable PDF: http://thf_media.s3.amazonaws.com/2010/pdf/bg2495.pdf

How much government is good government?

Thu, 02 Dec 2010 05:00:00 GMT

An American Enterprise Institute Debate
http://www.aei.org/event/100332

Congressman Paul Ryan’s remarks:
AEI billed this debate as the case for limited government, represented by me, versus the case for energetic government, represented by David. Unfortunately, I’m not going to do a very good job upholding my end of the bargain, because I happen to believe that the choice is a false one. In fact, energetic government is impossible without limits.

The idea that mainstream conservatives are anti-government is simply not true, and Arthur and I tried to make that point in our first op-ed in the Wall Street Journal. We quoted Friedrich Hayek from his book, The Road to Serfdom, in which he “reminded us that the state has legitimate—and critical—functions, from rectifying market failures to securing some minimum standard of living.” Edmund Burke, in many ways the founder of modern conservatism, was a champion of ordered liberty, recognizing the impossibility of one without the other. And recent history is filled with examples of conservative leaders who used government to achieve conservative ends.

Think about Rudy Giuliani. Think about what he did to clean up the police department in New York. Living in New York City is not the same as it was before he arrived. Look at Tommy Thompson, one of my political mentors, the former governor of Wisconsin, who took bold steps to clean up a moribund welfare system in Wisconsin. Take a look at Mitch Daniels, bringing consumer-directed health care reforms to Indiana. Think about Jeb Bush, who brought some much-needed and bold education reforms to Florida These leaders have a couple of things in common: They were no strangers to energetic government, and they are widely admired by mainstream, limited-government conservatives.

I’ve also embraced energetic, yet limited government with my Roadmap for America’s Future. It is a plan that does not do away with government. It’s a plan that does not even do away with our entitlement programs. It is a plan that makes these entitlement programs sustainable. It’s a plan that makes these programs something we can live with over the next century while keeping a limited government and a free-enterprise society.

I’ll talk more about the Roadmap in a minute, but I’d like to expand more upon this idea that energetic government is impossible without limits. Big government is lethargic government. A government whose size and scope is not properly limited will always seek to raise taxes before it looks for ways to innovate and do more with less. This is why those who do not share our attention to limited government have insisted that higher taxes are the best way, and the easiest and first approach, to close our yawning fiscal gap.

This is a solution I have rejected, not simply because I’m married to some magical, absolutely perfect level of tax revenue as a percentage of GDP. It is because I have a fundamental difference of opinion with those who think our biggest problem is not enough revenue. In fact, focusing just on the size of government entirely misses the point. We should not be asking, “How big should our government be?” We should be asking, “What is our government for?” What is its purpose? Should government enforce the rules, or pick winners and losers? Should government provide a basic safety net, or set up enormous transfer programs to fund entitlements for the middle-class and the wealthy? Is a government instituted by us to secure our liberties and allow us to thrive compatible with a state that consumes an ever-growing share of the private economy?

Rather than focus on size alone, we should be asking, “What makes America exceptional?” Who are we and what do we aspire to be at this juncture in our history? Abraham Lincoln said it best: “The progress by which the poor, honest, industrious and resolute man raises himself, that he may work on this own account and hire somebody else… is the great principle for which this government was really formed.” Do we want to have an opportunity society with a robust but circumscribed safety net, so that Lincoln’s resolute man is free to work, to take chances, to better himself? Or do we wish to inhabit a stagnant, cradle-to-grave welfare state, where opportunity is sacrificed to a misguided vision of equality? If we answer these questions correctly, the size of government will take care of itself.

If we answer these questions incorrectly, we risk crossing a tipping point where the size of government will do irreparable fiscal and moral damage – where we bankrupt the country and turn the safety net into a hammock that lulls able-bodied people into lives of complacency and dependency that drains them of the will to make the most of their lives. We do face a choice, and a battle over that choice.

On the fiscal side, we now face a debt so massive that, sooner than we think, we will be facing the collapse of our social safety net. Should the government fail to reform entitlements, those very programs will collapse under their own weight and bury the next generation under a crushing debt. Clinging to the status quo will not only lead, inevitably, to economically stifling tax increases, but to deep, sudden, and highly disruptive benefit cuts. Failing to address this problem now – when the necessary adjustments are manageable – assures forced austerity in the near future, imposed by credit markets in a state of panic.

On the moral side, I find the prospect of irreparable moral damage just as troubling, and I know David does as well. Europe’s people have labored under the rock of its welfare state for decades, and now that Europe’s debt crisis has lifted the rock, we see the moral ugliness has developed underneath. Turn on the TV and watch French teenagers lobbing Molotov cocktails at each other, burning down cars and schools, protesting an advancement of the retirement age and reductions in fat pensions they haven’t even begun to earn yet. Take a look at British university students shattering windows because they don’t want to share the cost of their own educations. Greek mobs murdering bank tellers because their workplace happens also to be a symbol of fiscal reality? Good grief.

Let’s contrast these riots with the Tea-Party protests we’ve seen over the last year or two. Instead of taking to the streets to demand more from the government, these citizens took to the streets peacefully to ask government to do less, to take less, and to return itself to the role for government envisioned by our Founders. David has argued that the Tea Party’s conception of this nation’s founding principles is flawed, and that energetic government has always been a part of this country’s tradition. I agree with David on the second part, but I think he has missed what the Tea Party picked up on, and that is that the current president’s vision for this country represents a shift, not just in the size of the government, but in the kind of government we have. Nowhere has this been on more vivid display than in the health-care debate.

The overriding problem with health care is the fact that health-care costs and prices go up faster than the rate of inflation, outpacing our incomes, so we know we’re on an unsustainable path. There are two approaches to this problem that simply cannot be reconciled. One approach is represented by the Democrats’ health-care bill, the Affordable Care Act, with its trillion-dollar expansion of government and its reliance on the same kinds of price controls that have failed for decades to control costs. The approach outlined by some of us – one that I offered with Alice Rivlin – would deliver premium support to individuals, run the money through the individual instead of the government, peg that support to a rate closer to general inflation, and use a decentralized market process to discover efficiencies.

There really are only two ways to go: Run the money through the individual, make them more powerful, and reform our insurance laws so that consumers can have more power, and so that the providers of health care compete with each other for our business in a marketplace; or run the money through the government, and trickle it down, top to bottom, through price controls and formulas. That’s the choice we have on health care.

I like to think of the plan I’ve offered as an example of energetic, smart government. It takes the Burkean approach of working to conserve the arrangements that people have built their lives around. The radicals are those who are committed to centralized approach to cost control and a blank-check version of entitlement spending, even though this approach has manifestly failed. In fact, with the Affordable Care Act, they doubled down on the same doctrine and the same dogma. This vision for our future – a vision that imagines we can just tinker at the margins of our entitlement programs and somehow avoid the coming collapse – would lead us into the kind of harsh austerity that would hit those who rely on the safety net the most, the hardest. It is a vision that is simply not compatible with mine, and I believe that there is nothing to be gained by pretending to Americans that we do not face a stark choice between the two.

Let’s focus on today, not the day after tomorrow. The consequences of this choice are too important to pretend that it doesn’t exist. I don’t want to get into a “do it for the kids” cliché here, but I think it is important to stress: What we are doing, and what are we doing to them? And if you simply look at what we are doing to the next generation, it is simply immoral. My three kids are what motivated me to put this Roadmap out there in 2008, back when deficits were going down during the Bush administration, before we were on the precipice of this debt and economic problem. The storm clouds were already growing then, and we could see that we needed a course correction, and that we would be giving our kids a lower standard of living and an impoverished and diminished country. Well, now the storm is right in front of us.

I see greatness in my three kids – who are six, seven and eight – as I’m sure every parent does. But as someone who spends all his time thinking about the budget – probably more than a healthy person should – I know that we are not building that prosperous opportunity society that they need in order to maximize their potential. There is nothing more dispiriting than to think that they won’t be able to chase their dreams because of the decisions that we make or fail to make right now. There is nothing that disturbs me more in this debate than to think of my kids coming into a country and a society where they’re more likely to be dependent on the government for their future than they are upon themselves.

The situation is even worse today than it was when we first started talking about these ideas – to the point that I am increasingly convinced that we might see a debt crisis in the near future. This is why it so incredibly urgent to act, to make no bones about the choice before us, and to mobilize a citizenry that appears receptive to our message, as evidenced by this past November 2^nd. We cannot skirt the edges of this problem. We must truly change course. And we don’t have the luxury of waiting until the “day after tomorrow” to make this choice. We have to decide today who we are and what kind of country we want to be, before we move on to other debates.

Ryan’s remarks can be found online at: http://on.fb.me/fOE5AG

Alarm over U.S. debt creates 'window' for tough choices

Mon, 29 Nov 2010 05:00:00 GMT

RACINE, Wis. — If Americans aren't prepared for the hard choices needed to control the national debt, most voters here must have missed the memo.

The local Republican congressman, Paul Ryan, campaigned for re-election by calling for reductions in the growth of Medicare and Social Security. He won with 68% of the vote.

Ryan's landslide in a southeastern Wisconsin district formerly held by Democrats may be a testament to the national mood when it comes to red ink, budget watchdogs and local business groups say. As President Obama and Congress turn their attention from energizing the economy to balancing the budget, even sacred items such as retirement programs will be fair game — something Ryan tells his constituents regularly.

"They know that he talks straight," says Michael Kobylka, president of the Racine Area Manufacturers and Commerce, the local business coalition. "It's those third-rail issues that nobody has wanted to talk about that are part of the problem."

"People are ready for an adult conversation, they're ready for the truth, they're ready for solutions no matter whether they agree on every detail or not," says Ryan, 40. His fiscal "Roadmap for America's Future" — which features dramatic changes that could boost Medicare costs and reduce Social Security benefits for Americans now under 55 — was endorsed by dozens of candidates in this year's elections. "This is no longer the third rail it was once thought to be."

The full article is available online at: http://www.usatoday.com/news/washington/2010-11-29-1Adeficit29_CV_N.htm

The Importance of Rivlin-Ryan

Wed, 24 Nov 2010 05:00:00 GMT

The political ground has been shifting rapidly ever since the American people delivered a vote of no confidence on the current direction of public policy when they went to the polls earlier this month.

Nowhere is that shift more evident than in the recent release of a bipartisan plan to dramatically reform the nation’s health entitlement programs. Sponsored by incoming House Budget Committee Chairman Paul Ryan and former Clinton administration budget director Alice Rivlin, the “Ryan-Rivlin” plan represents a real breakthrough in the long standoff between the parties over how to address the most pressing problem in the federal budget, which is the relentless, long-term rise in costs of Medicare and Medicaid. Ryan and Rivlin both serve on the presidential commission looking at ways to reduce the nation’s short- and long-term budget deficits, and they offered their health-entitlement reform plan to their fellow commission members for consideration.

In Medicare, the Ryan-Rivlin proposal would be transformative. It picks up on a key feature of Rep. Ryan’s “Roadmap” budget plan, which is that new enrollees in Medicare after 2020 would receive their entitlement in the form of a fixed contribution from the federal government rather than today’s defined benefit program structure. These Medicare enrollees would then apply their entitlement against the cost of health insurance. The value of the defined-contribution payment from the government would grow at a rate of GDP per capita plus one percentage point. The plan would also restructure Medicare for current beneficiaries by rationalizing the cost-sharing with a single, higher deductible and more uniform coinsurance across care settings, as well as an out-of-pocket cost limit. Secondary insurance plans would be prohibited from covering the first $500 of the deductible or more than half of the cost-sharing for services.

For Medicaid, Ryan and Rivlin propose moving toward a fixed block grant payment from the federal government to the states. The block grant payments would be indexed to grow with the size of the Medicaid population as well as per capita GDP growth plus one percentage point. The plan does not specify in detail what new flexibility the states would receive to administer the program, but it would presumably be significant new freedom to make changes as needed to run Medicaid according to state priorities.

Beyond Medicare and Medicaid, the plan would also impose limits on noneconomic and punitive damages in medical liability cases as well as repeal the ill-advised long-term care program (called the “CLASS Act”) that was created in the recently passed health care law.

The Congressional Budget Office (CBO) has already issued a preliminary assessment of the budgetary implications of Ryan-Rivlin, and the results are impressive. Over the next decade, Ryan-Rivlin would cut federal deficit spending by $280 billion, and by 2030, federal spending on the major health entitlement programs would be about 1.75 percent of GDP below a reasonable baseline projection.

But the importance of Ryan-Rivlin goes well beyond its details and current CBO cost estimate. The fundamental problem in American health care is that the federal government is providing open-ended financial support for health insurance coverage. Most Americans get their insurance through Medicare, Medicaid, or employer-sponsored insurance. And in each case, the federal government’s support for that coverage increases commensurately with costs. So when costs or premiums rise by an extra dollar, the federal treasury is picking up a sizeable portion of the added expense, thus substantially undermining the incentive for economizing by those enrolled in the coverage or those providing the services.

The solution is an across-the-board move toward more fixed federal financial support for coverage. That’s a central element in the Ryan Roadmap, and has been a theme in just about every market-based reform of health care proposed over the past quarter century. At various times, moving away from open-ended entitlements has gotten the support of some Democrats, most especially when former Senator John Breaux championed “premium support” for Medicare in the late 1990s. But, by and large, most Democrats have resisted these kinds of moves and attempted to control entitlement costs with arbitrary price controls instead.

Ryan-Rivlin is thus an important step because it brings a prominent official from the Clinton administration onto a proposal that would decisively move away from the health entitlement status quo. That’s no small matter.

Ryan-Rivlin is far from ideal. It is largely silent on ObamaCare, which would push the health system in precisely the wrong direction by extending open-ended entitlement promises to millions of new people. Households with incomes below four times the poverty line would see their premiums capped as a percentage of their income, regardless of the expense of their health plan coverage. Moreover, the new law leans heavily on price controls to cut costs, which only distort the marketplace and undermine the quality of American medicine. These damaging aspects of ObamaCare would substantially undermine the benefits that the Ryan-Rivlin approach would produce. The lesson is that there’s no getting around the need to repeal ObamaCare in its entirety. If it remains in place, there will be little that can be done to stop a full government takeover. What’s needed is a full replacement program, with fixes not only for Medicare and Medicaid but also for the tax treatment of health insurance so that workers too become cost-conscious consumers in a reformed marketplace.

Still, Ryan and Rivlin should be applauded for taking this courageous step and putting their health entitlement reform plan on the table for consideration. It is a clear demonstration that the conversation has shifted, and in a much more positive direction.

James C. Capretta is a fellow at the Ethics and Public Policy Center and project director of ObamaCareWatch.org.

View article at e21 here.

The Roadmap Lives

Mon, 22 Nov 2010 05:00:00 GMT

Last year, Rep. Paul Ryan's "Roadmap" -- his far-reaching plan to restore long-term budget balance through tax and entitlement reform -- was the subject of relentless attacks by those favoring a larger government role in American life. New York Times columnist Paul Krugman called Ryan the "Flimflam Man" in a widely cited opinion piece in which he tried to dismiss the Roadmap as not a credible solution to the nation's budget problems. The congressional Democratic leadership followed up with an organized campaign aimed at demonizing the plan as a callous assault on Social Security and Medicare beneficiaries. Their clear intention was to use the Roadmap to damage scores of Republican candidates for House and Senate seats by association.

None of it worked. In fact, not only did the Roadmap survive the 2010 mid-term campaign, the election results -- and the dominoes that have fallen since -- have made it far safer politically for Roadmap proponents to advance the plan's ideas in the public square.

That the political and policy landscape has started to shift, and rather dramatically, became apparent just a week after the election when the co-chairs of a commission appointed by President Obama, on which Ryan, a Republican from Wisconsin, also serves, offered draft recommendations on how to close the short- and long-term budget deficits. President Obama had appointed former Clinton White House Chief of Staff Erskine Bowles and former Sen. Alan Simpson, R-Wyo., to chair the 18 member group earlier this year, and he asked them to report back by Dec. 1 -- after voters were given a chance to decide the make-up of the 112^th Congress.

The draft proposal put forward by Bowles and Simpson caught just about everyone in Washington off guard. It's not a business-as-usual plan. Very few sacred cows were spared. It calls for radical tax reform to lower rates and broaden the base, a reduction in the corporate tax rate, long-term entitlement spending cuts, and elimination of programs that have been around for decades. Among the most controversial items now on the table for consideration by the presidentially appointed commission is the full elimination of mortgage interest and state and local tax deductions, dramatically lower future Social Security benefits for higher-wage workers, and real cuts in pay for federal workers.

On Nov. 17, just a week later, another bipartisan commission looking at the nation's deteriorating budget situation took its turn. This one is headed by former Sen. Pete Domenici, R-N.M., and former Clinton budget director Alice Rivlin, and is sponsored by the Bipartisan Policy Center. They and their commission colleagues -- many of whom are Democrats -- released their own version of a deficit- reduction plan, which received unanimous support from the 19 commission members.

Among other recommendations, the Domenici-Rivlin plan would cap the tax preference for employer-paid health insurance and then phase it out entirely over a number of years. It would also convert the Medicare program for future enrollees into a "premium support" program in which the beneficiaries get a fixed level of financial support from the government for the purchase of insurance. Enrollees selecting options more expensive than the average plan would have to pay the difference out of their own pockets.

Rivlin -- who is also serving on the Bowles-Simpson presidential commission -- followed up her work with Senator Domenici by announcing her public support for a "Ryan-Rivlin" health entitlement reform program, which the two then proceeded to offer to the presidential commission for its consideration. The Ryan-Rivlin proposal includes many of the same features in the health sector as the Ryan Roadmap. Future Medicare enrollees would receive their entitlement in the form of a fixed level of federal support for health insurance. The eligibility age would be increased gradually to age 67, up from 65 today. And the cost-sharing for current program enrollees would be modified to require most beneficiaries to pay something toward the cost of the services they receive before Medicare and secondary insurance kicked in. Medicaid would be converted into a block grant program to the states, with the states freed up to run the program as they see fit. The new long-term care program created in the health law -- called the "CLASS Act" -- would be repealed. And noneconomic and punitive damages in medical malpractice cases would be capped.

The Congressional Budget Office, in a preliminary analysis, estimates the Ryan-Rivlin plan would reduce the federal budget deficit by $280 billion over the next decade and 1.75 percent of GDP in 2030 (with reasonable baseline assumptions). That kind of savings is going to be needed to prevent the federal budget from going entirely off the rails in the next two decades.

Still, there's no expectation that any of these proposals are going to sail through Congress anytime soon. Indeed, what's most likely to happen in the short term is absolutely nothing. The Bowles-Simpson commission may not find common ground, at which point Congress is under no obligation to take up draft recommendations from a subset of its membership. Moreover, both the Domenici-Rivlin plan and the Ryan-Rivlin health entitlement program have already set in motion frantic efforts to mount counter-offensives among the protectors of the status quo to prevent these ideas from gaining any political traction.

But what's really important about the last month is not that any reform plan is about to pass. It's that the terms of the budget, entitlement and health care debates have shifted dramatically, and very likely on a permanent basis. The fundamental elements of the Ryan Roadmap are sweeping tax reform; changes in health care which emphasize a marketplace and consumer choice; and modifications to retirement programs that reflect demographic reality. All of these elements can now be found in budget plans endorsed by prominent Democrats, including Democrats the president himself turned to find solutions to the nation’s budget problems. Consequently, it will be much harder in the future for Democrats to demonize these ideas as they have tried to do in the past.

Paul Ryan took the courageous step of going first with a bold plan to fundamentally restructure the tax and entitlement policies that threaten to push the federal budget past the breaking point. Now others, even some from the other side of the aisle, are joining him in sponsoring similar plans. The Roadmap does indeed live on.

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Provided by Kaiser Health News: http://www.kaiserhealthnews.org/Columns/2010/November/112210capretta.aspx

The Rivlin-Ryan Plan to Reform Medicare

Thu, 18 Nov 2010 05:00:00 GMT

Two members of the Bowles-Simpson deficit commission, Rep. Paul Ryan and Clinton-era OMB director Alice Rivlin, have endorsed a sweeping plan to overhaul the Medicare system….

The Rivlin-Ryan plan…is, in my view, the best way to address the central problems facing the U.S. health system and the U.S. public sector more broadly. Love it or hate it, it’s important for all of us to understand it…

The real debate we’re having is over which approach is more likely to yield greater cost-effectiveness over time: a centralized, IPAB-driven approach or a decentralized discovery process.

To read the full post: http://www.nationalreview.com/agenda/253535/rivlin-ryan-plan-reform-medicare-reihan-salam

Rep. Ryan on His Medicare Plan

Wed, 17 Nov 2010 05:00:00 GMT

The following was submitted by Representative Paul Ryan, Republican of Wisconsin. More on Mr. Ryan’s plan to change Medicare and reduce the deficit is here.

For Medicare to meet its mission in the 21st century, this critical 20th century program must be secured for current and future seniors. Medicare’s open-ended, fee-for-service model distorts the health care market, inflates costs, and invites fraud and abuse. With tens of trillions of dollars in unfunded promises, Medicare is on an unsustainable trajectory, and yet ‘do-nothing’ politicians irresponsibly insist the program remain on autopilot.

Fierce opposition to Medicare reform is a disservice to both current beneficiaries and future generations.

In order to make good on Medicare’s promise, I’ve put forward reforms that offer future seniors the same health coverage options I enjoy as a member of Congress. My reform plan makes no changes for those 55 and older, as efforts to save this program ought not disrupt benefits for those in and near retirement. For those now under the age of 55, Medicare would provide seniors with a payment, a list of Medicare-approved coverage options, and the ability to choose a plan that works best for them. The Medicare payment would be adjusted so that the wealthy receive a lower subsidy, the sick would receive a higher payment if their conditions worsen, and lower-income seniors would receive additional assistance to cover out-of-pocket costs.

Both Democrats and Republicans have recommended similar reforms as a sustainable model for Medicare going forward. It is also an approach currently enjoyed by Democrats and Republicans alike, as this is how health care is delivered to members of Congress.

Going forward, we have one of two choices for Medicare reform: Put patients in charge of how their health care dollars are spent, as providers compete against each other on price and quality to better serve patients; or funnel funds through the government, force providers to lobby bureaucrats for favorable funding formulas, and leave patients on the sidelines while health care decisions are made for them.

In health care, as in any other economic arrangement, control of money is power. The question remaining is then: Who gets the power? The government or the patient? Patient power will always serve the needs of the people far better than bureaucrats managing the decline of a government-run system on the verge of bankruptcy.

Reform aimed to empower individuals — with a strengthened safety net for the poor and the sick — will not only ensure the fiscal sustainability of this program, the federal budget, and the United States economy, but also guarantee that Medicare can fulfill the promise of health security for America’s seniors.

This article available online here.

Paul Ryan joins Charlie Rose

Mon, 15 Nov 2010 05:00:00 GMT

To watch highlights from the interview: http://www.house.gov/budget_republicans/charlierosehighlightsnov2010.shtml

To watch the entire interview: http://www.charlierose.com/view/interview/11203