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Home Publications Blogs Beat the Press From Foot Fetishes to Footnote Fetishes: Krauthammer on Ryan

From Foot Fetishes to Footnote Fetishes: Krauthammer on Ryan

Friday, 08 April 2011 18:25

We all know the line about history repeating itself. The first time is tragedy, but at this point we are well past farce. Ezra Klein calls attention, via Paul Krugman, to the fact Charles Krauthammer is impressed by Paul Ryan's use of 37 footnotes in his budget plan.

With the prospect of a government shutdown facing the country it's hard not to think of Dick Morris, the architect of President Clinton's triangulation strategy between the Republicans majority in Congress and the Democratic minority in Congress. Clinton had to break his ties to Morris when he was caught with a prostitute, with whom he apparently engaged in strange activities with her feet.

But the footnotes are far less important that Krauthammer's substantive errors which he kindly numbered for readers. His error number 1 is a criticism of Ryan's critics for claiming that Ryan's cuts would hurt the poor. Krauthammer's trump card is the foolishness of the liberals who complained about Clinton's welfare reform, singling out Peter Edelman who resigned from the administration in protest over the policy. We are told that:

"Within five years child poverty had declined by more than 2.5 million — one of the reasons the 1996 welfare reform is considered one of the social policy successes of our time."

The decline in child poverty was real, but it is more typically attributed to the unemployment rate dropping to 4.0 percent in the late 90s boom. More recently, the child poverty rate has risen back to its mid-90s level, meaning that we have made no progress in eliminating child poverty over the last 15 years. One of the reasons that Edelman and others objected to welfare reform is that the new TANF program that replaced the old welfare system would not guarantee that resources would expand during a recession when they were most needed. On this score, it looks like Edelman was exactly right.

In error number 2, Krauthammer complains about the people who have attacked Ryan's Medicare plan as privatization. He tells us that:

"instead of paying the health provider directly (fee-for-service), Medicare would give seniors about $15,000 of 'premium support,' letting the recipient choose among a menu of approved health insurance plans."

In fact the premium support is set at $8,000 per person in 2022. That translates into $6,100 a year in today's dollars. According to the Congressional Budget Office (CBO), this will be enough to pay less than 40 percent of the cost of a Medicare equivalent benefit in 2022. The assessment of CBO, based on the experiment with Medicare Advantage (we have tried this before) and an examination of the private health insurance market, is that Ryan's plan will raise, not lower, Medicare costs.

Krauthammer touts the lower than expected cost of Medicare Part D. The main reason that this program cost less than expected is that drug prices in general have risen less rapidly than had been projected. This in turn is due to the fact that many blockbuster drugs have gone off patent, leading to lower prices now that they face generic competition. The industry has produced few important new drugs in the last few years thereby reducing the upward pressure on costs.

Finally we have Krauthammer's error number 3:

"The final charge — cutting taxes for the rich — is the most scurrilous. That would be the same as calling the Ronald Reagan-Bill Bradley 1986 tax reform 'cutting taxes for the rich.' In fact, it was designed for revenue neutrality. It cut rates — and for everyone — by eliminating loopholes, including corrupt exemptions and economically counterproductive tax expenditures, to yield what is generally considered by left and right an extraordinarily successful piece of economic legislation."

No, actually it is not designed to be revenue neutral. It is designed to cut taxes on the wealthy. Ryan has not produced a set of loopholes whose elimination would offset the cost of his tax cuts. He just wrote in numbers. When the Tax Policy Center of the Urban Institute and Brooking Institution examined Ryan's tax plan, they found that it came up $2.9 trillion short over the course of the decade. Ryan did not describe a specific set of loopholes to close that they could score, but they would have to be quite large to fill this gap.

I suppose after reading through Ryan's plan, if you can't find much good to say about it, you can always talk about the footnotes.

Comments (6)Add Comment
written by izzatzo, April 08, 2011 8:21
Baker missed error number four by Krauthammer where Ryan offers seniors the option to remain in regular Medicare in lieu of vouchers if they read Atlas Shrugged by Ayn Rand along with Ryan's staff and chant it out loud as they do jumping jacks and push ups with Ryan every morning to affirm their loyalty.

Krauthammer apparently interpreted this in error to be driven by incentives under Health Savings Accounts to be more healthy and avoid expensive medical care until it became clear that for every two seniors lured in to do the John Galt Goose Step at least one had to have a hip replacement.
written by MS, April 08, 2011 10:30
Hate to be hateful, but how much fed $$ covers Krauthammer's paraplegic care? Hope it isn't my tax dollars. Its usually the one who carp the loudest are the hypocrites.
written by joe, April 09, 2011 2:46
The Economist says Ryan's plan "effectively privatizes medicare" (page 9 politics summary) and then on page 14 they have an article titled "Praising Congressman Ryan."

Until Ryan says he is going to increase GE's yearly tax bill by $3 billion, we can assume it's a rate cut with no offsets.

Between 1996 and 2001 (5 years after welfare reform), real per capita GDP grew 2.59% per year and with the unskilled wage rising 3.93% per year (1.5% above the CPI of 2.54%).
written by ccaffrey, April 09, 2011 2:53
Re Medicare (and Medicaid) costs, I'd like to encourage people to go to the whistleblower site Taxpayers Against Fraud www.taf.org. Noteworthy is their list of the biggest (dollar-wise) defrauders of the taxpayers/government over the past decade or so. Twenty-five of the top 26 were private for-profit health care industries, many of them found guilty of Medicare/Medicaid fraud. Number 1 was Pfizer (apparently they are also recidivists.) Amazingly, of those offenders, ONLY the relatively small Florida operation billing for fake patients saw the perps doing any jail time. The rest received fines (cost of doing business) and some monitoring. No Jail Time.

We still haven't begun to have any real discussion of the swollen program costs. Yet the solutions always seem to involve citizens sacrificing services and never involve reining in vendor costs. Ever. Or fee-for-service for providers which is almost akin to when Sears Auto Dept was found to be paying their mechanics on commission. So many options before slashing services for our elders. We ought to be ashamed.
written by ed hardy shirts, April 09, 2011 4:01
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written by Matt, April 09, 2011 4:33
@ccaffrey: Pfizer is bad, but it's even worse to note that the CEO responsible for both #2 AND #5 on the list is now Governor of Florida...

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About Beat the Press

Dean Baker is co-director of the Center for Economic and Policy Research in Washington, D.C. He is the author of several books, his latest being The End of Loser Liberalism: Making Markets Progressive. Read more about Dean.