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5/30/2008 Ryan's road map lacks fiscal details By Ken Lamke The column below reflects the views of the author, and these opinions are neither endorsed nor supported by WisOpinion.com. The positive critical reaction to Wisconsin Republican Congressman Paul Ryan's recent "road map for America's future" might lead you to believe that Ryan is a both a policy genius and profile in political courage. Well, he may be -- but not because of anything in his "road map." Ryan's so-called plan appeared as an op-ed in the Wall Street Journal on May 21 and immediately spawned uniformly positive comments in Wisconsin, ranging from "extraordinary" (conservative talk show host Charlie Sykes) to "interesting" from the generally liberal editorial page of the Milwaukee Journal Sentinel. (Conservative Madisonian Christian Schneider's comment while appearing on Sykes' Sunday TV panel show that he has a "man crush" on Ryan is not included. My wife says that Schneider is playing at being actor Matthew Perry. And he is pretty good at it, she says.) Mark Belling, the dean of Wisconsin conservative talk, summed it up a week later: Ryan, said Belling, "is a one-man idea factory who has wowed even liberal pundits with the entitlement manifesto released last week." Well, not so fast. First, Ryan's road map is not a "plan." It's parts don't fit together and have no hope of being enacted as a package, either all at once or ad seriatum. Second, there is nothing new in the plan. It rehashes previous proposals from sources as various as John McCain, Ronald Reagan, George Bush and earlier would-be tax code reformers. Third, there's no way to know whether Ryan's "plan" or any of its parts adds up fiscally -- that is, that it solves the "looming fiscal crisis" that Ryan (and everybody else, for that matter) says the nation faces if it does not reform health care, Medicare and Medicaid, Social Security and the tax code in general. The reason that you can't add up the parts of the plan is that, while Ryan provides the rhetorical arguments for his plan on his web site, and even the proposed bill langugage in all its legalese gobbledygook, the numbers that Ryan says back up the plan's claims are contained in two appendicies -- that are, conveniently, not available on the Web site. It's my experience over 43 years in one form of journalism or another that when the numbers are missing, something's fishy. So let's actually run quickly through the Ryan plan. There's some value, I believe, in looking at what Ryan is actually proposing, in a little if not great detail, rather than simply bowing before it's good intentions. First, Ryan's plan, in scope, goes beyond even a hot dog eating contest. It's a pig eating contest. Isn't meant to be done. Each one of the parts of Ryan's plan (again, health care, Medicare and Medicaid, Social Security and the tax code) is a huge problem on its own. Past reforms in each single one of these areas have required the total attention of the Congress for months at a time, even years. Not only are the problems too big to be taken up together, there is no conceptual or policy need to tie them together, except as a laundry list. Second, Ryan may or may not be, in Belling's words, a "one-man" idea factory, but in this case, Ryan's ideas have all come out of somebody else's factory previously. For example, the congressman's proposal to provide refundable tax credits of $2,500 ($5,000 for families) to buy health care insurance is the John McCain campaign plank for health care reform. Ryan's plan to replace Medicare with $9,600 vouchers with which to buy health insurance is a Reagan proposal from 25 years ago. (It is a plan to privatize Medicare, plain and simple. Did the Milwaukee Journal Sentinel understand that when it called Ryan's plan "interesting?") I'm not sure exactly what Ryan's Medicaid plan is because the language used to describe it is so vague ("The bill modernizes Medicaid by giving states maximum flexibility to tailor their programs to the specific needs of their populations," Ryan's plan says.). It's probably not much of an exaggeration to say that every governor who has been elected in each of the 50 states since the inception of Medicaid decades ago has asked for more flexibility in the program. Turning to Social Security, the congressman's ideas include an unspecified increase in the retirement age and unspecified slowing of the growth of benefits -- both of which have happened in the past, so nothing new there -- and a voluntary plan that would allow Social Security recipients to invest one-third of their Social Security taxes in private investment accounts. That, of course, is taken from the Bush private investment account proposal, which went nowhere. As for tax reform, Ryan would allow taxpayers to either stay in the current system or opt to pay under a new tax code that would have only two rates (10% on taxable income up to $100,000 for joint filers and 25% above that amount, with virtually no deductions or other "loopholes.") Such flat-tax proposals have been a staple of tax reform ideas for at least the past 30 years. The third major objection I have to the Ryan road map -- or, to be more precise, to the uncritical praise for it -- is that you can't tell if the numbers add up, absent a look at the figures. Which, as I mentioned, are not readily available. But here are a few simple starting questions, among potentially hundreds, about the numbers: The health care plan, although Ryan never admits it in his op-ed, requires that current employee health benefits paid by an employer be made taxable income to the employee. That's right, a tax increase. Does Ryan's $2,500 tax credit (or $5,000 for a family) offset the tax increase? How much coverage will the proposed $9,600 Medicare voucher buy? Remember, that's all there is. There will be no more Medicare, just the policy you buy on the private market with $9,600. How much of an increase in the Social Security retirement age, and how much of a reduction in promised future benefits, are required to make the Ryan plan work? Who gains and who loses under the Ryan tax reform? Since the plan also abolishes taxes on capital gains, dividends and estates, we're pretty sure that upper income taxpayers don't lose. But we could be wrong. I'm not necessarily against the Ryan "road-map." But even if I could see the numbers and be turned into an advocate for the plan, I'm sure it wouldn't pass anytime in the near future, if for no other reason than the fact that both houses of Congress are currently controlled by the Democrats and the Democratic margins seem foreordained to increase in the November elections. Ryan is generally regarded as a serious, fiscally conservative congressman who works well with everyone, including Democrats. Ryan could be a future speaker of the House, or a U.S. senator or, much less likely, John McCain's vice-presidential running mate. But it won't be because of his road map. -- Lamke is a former political reporter for the Milwaukee Sentinel. |
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