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Fun With Paul Ryan and the Washington Post

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Friday, 13 August 2010 04:29

The Washington Post really really hates Social Security. They hate Medicare almost as much. Therefore they are willing to give its critics space to say almost anything against the program (the real cause of September 11th) no matter how much they have to twist reality to make their case.

Today, Republican Representative Paul Ryan stepped up to the plate. The Post felt the need to give him an oped column after Paul Krugman cruelly subjected Mr. Ryan's "Roadmap for America's Future" to a serious analysis last week. This violated the long accepted practice in elite Washington circles of not holding proponents of Social Security and Medicare cuts/privatization accountable for the things they say. It is therefore understandable the Post would quickly give a coveted oped slot to Mr. Ryan to make amends for such a grievous breach of protocol.

The rest of us may not have the power to invent the facts that would be needed to push our policies, but that doesn't mean we can't have fun. Let's count the inaccuracies (they call them something else outside of DC) in Mr. Ryan's piece.

 

1 and 2) In the second sentence we get the line:

"Only in Washington could the government raid one entitlement program [Medicare] to finance a brand-new one [Obama's health care program] and still claim that deficits have been reduced and entitlements have been reformed." 

Let's see, "raid" refers to proposals to contain costs in Medicare. If I spend less on groceries this week, have I "raided" my food budget? At the least, this is an interesting use of the term "raid." Assume for the moment that the projected cost savings can be achieved without jeopardizing the quality of care (Ryan does not argue this point), what is the problem with using savings from one program to finance another and still have some additional savings left over to reduce the deficit?

That's the same arithmetic they use everywhere, even in Representative Ryan's home state of Wisconsin. (I know this, when I was in high school I went to a math contest there.) And President Obama's program was scored as reducing the budget deficit by the non-partisan Congressional Budget Office, so it was not his administration's own funny numbers.

The second sentence of the second paragraph tells readers: "Last year's report revealed a $38 trillion shortfall over the next 75 years."Actually, that was the projected shortfall over an infinite horizon with the vast majority of the bad news coming after 2100. The shortfall over the 75 year horizon was $13.1 trillion.

Presenting a huge sum like this without any context (e.g. approximately 2.6 percent of future GDP) is certainly misleading, but in keeping with the Post's policy of affirmative action for deficit hawks like Ryan, we'll ignore this one.

3) In the next sentence Ryan tells readers:

"This year the shortfall appears to have decreased, but only after the Democrats' health bill cut $529 billion from Medicare." Okay, this may not be a misrepresentation, just a non sequitur. Yes, if you are to improve a program's finances you must either increase its revenue or cut its spending, so the Democrats propose to cut spending on Medicare. You caught them in the act, Mr. Ryan.

4) In the next sentence we have: "This apparent improvement was the basis for Democratic celebration -- even though the program remains tens of trillions of dollars in the hole." 

This one is beyond debate. The new projections show a Medicare shortfall equal to 0.3 percent of GDP over its 75 year projection period. This is equal to $2.7 trillion. And, even in Washington, $2.7 trillion is not "tens of trillions."

The next sentence is: "With the same legislation that cut more than half a trillion dollars in Medicare spending, the Democrats created a nearly $1 trillion health-care entitlement." Okay, this is not an inaccuracy, but Mr. Ryan the deficit hawk has now managed to attack the Democrats for cutting Medicare three times and we have just started the third paragraph.

5 and 6) Ryan then tells us: "The Obama administration's own chief actuary has explained that in addition to the dubious assumptions on provider cuts and other claims of savings, the health-care law's Medicare cuts cannot be used to both reduce Medicare's unfunded obligations and pay for a new entitlement."

The chief actuary is a non-political position. The current chief actuary, Richard S. Foster, was not appointed by Obama.

The accounting used by the Obama administration with the Medicare savings is the standard accounting used for trust funds for decades.

7) Ryan begins the fourth paragraph: "Put simply, Medicare is on course to collapse." No, the trustees report released last week implies that it has a relatively minor shortfall. The trustees could be wrong, but if their projections prove accurate, then Medicare is actually in fine shape.

8) In the middle of the paragraph we get: "Exacerbating our unsustainable trajectory, health spending explodes under the Democrats' health plan -- raiding Medicare, expanding Medicaid and creating two entitlements without any clue of how to finance the ones we have now." Actually, CBO and the trustees showed health spending growing less rapidly than they had been without the plan. And, note that we have our fourth "raid" of Medicare. 

9) The paragraph concludes: "the CBO warned last month of a devastating debt crisis within two decades." Actually, CBO bears part of the blame on this. It made a mistake in its projections which it subsequently corrected.

10) The fifth paragraph begins: "We do not have a choice as to whether Medicare will change from its current structure." No, if the trustees projections are correct, then we do not have to change Medicare's structure beyond the changes in current law.

11 and 12) Later in the paragrpah Ryan tells us: "the Democrats' political machine has attacked my contribution to this debate, making the false claim that the only solution put forward to save Medicare would "end Medicare as we know it."

The main attacker of Ryan is Paul Krugman. Krugman is very far from being part of the "Democrats' political machine." In fact, he is almost certainly the prime embodiment of the "professional left" recently criticized by White House spokesperson Robert Gibbs.

Of course Ryan's plan would end Medicare as we know it. It replaces a Medicare system that pays directly for health care with a voucher system. The voucher is explicitly designed not to keep pace with health care costs. Ryan describes the rate of increase in the size of the voucher as "a blended rate of the CPI and the medical care component of the CPI." In other words, something less than the rate of increase in health care costs. It is also means-tested, so that individuals with incomes above $80,000 would see their voucher cut in half (we might see a lot of people earning $79,999 under the Ryan plan) and those with incomes over $200,000 would not get the voucher.

13 and 14) In the next paragraph Ryan boasts that his Medicare cuts (raids?) would maintain the program's solvency: "while reforming the program to ensure it will be there for younger generations. Future seniors would have access to the same coverage I enjoy as a congressman."

Of course the current projections already show that the program will be there for younger generations, so they don't need Mr. Ryan's plan, if the projections are correct. And there is absolutely nothing that ensures that Mr. Ryan's Medicare voucher will provide seniors with the same coverage that he enjoys as a member of Congress.

15) The next paragraph reads:

"Far from the claims of "radicalism," this proposal is based on a key reform from the National Bipartisan Commission on the Future of Medicare, chaired by then-Sen. John Breaux (D-La.). That commission in 1999 recommended "modeling a system on the one Members of Congress use to obtain health care coverage for themselves and their families."

Ryan's Medicare plan is a voucher system like the Congressional health care system is a voucher system in the same way that a Yugo and a BMW are both cars, but there is absolutely nothing about Ryan's proposal that ensures Medicare beneficiaries the same quality of care as members of Congress.

16) Ryan then describes his Medicare voucher:

"The Medicare payment would grow every year, with additional support for those who have low incomes and higher health costs, and less government support for high-income beneficiaries."

Actually, the payment is explicitly designed to fall behind the rate of medical care cost inflation. Rather than those with lower incomes getting more, those with higher incomes (above $80,000 a year) would fall further behind inflation.

17 and 18) The penultimate paragraph begins: "If we act now, we can avoid disruptions for current seniors while advancing patient-centered reforms so Medicare will be strengthened for future beneficiaries. The alternative is the European-style death spiral of the welfare state: kick the can down the road as our debt explodes."

Again, the latest projections from the Medicare actuaries imply that there is no great urgency to "act now." The "European-style death spiral" might be useful political ad hominem, but it has no meaning. Some European countries, like Greece and Italy, do face severe budget problems, however some of the countries with the most expansive welfare states, like Denmark and Sweden, have much lower debt burdens than the United States.

19) Ryan continues: "Under an ever-expansive, all-consuming central government, costs will be contained with Washington's heavy hand imposing price controls, slashing benefits and arbitrarily rationing seniors' care."

Actually no one has raised the issue of rationing in any context. President Obama's plan will limit the procedures for which the government will pay, as is currently the case with Medicare. However, there is nothing that President Obama has put forward that would do anything to prevent people from getting whatever care they are willing to pay for. Apparently the word "rationing" scores well in focus groups, which is why Ryan and other Republicans use it frequently in their attacks.

20) The second to the last sentence in the last paragraph tells readers: "Ironically, if Democrats succeed in demagoguing to death efforts to save Medicare, that political victory will hasten the program's end." Of course, the Medicare trustees projections are correct, the program is nowhere near death, so we don't need Mr. Ryan's voucher plan to save Medicare.

Ryan concludes by telling readers that his proposal is "my sincere attempt to break the political paralysis on entitlement reform, to show that this challenge can be met -- mathematically and politically -- and to challenge those who disagree with my proposal to offer their own."

In the forgiving spirit of Friday the 13th, I will not count the reference to sincerity as an inaccuracy. The 20 inaccuracies and 4 references to raiding Medicare can speak for themselves. Of course to the seniors who would be unable to afford decent health care if Mr. Ryan's plan became law, his sincerity won't make any difference.

But, I am happy to offer my own test of Mr. Ryan's sincerity. How about giving Medicare beneficiaries the option to buy into the more efficient health care systems in Europe, Japan, and Canada. The beneficiaries and the taxpayers will split the savings. This leaves the current system intact for those who like it, while offering seniors who opt to go elsewhere for their health care the opportunity to pocket tens of thousands of dollars while saving taxpayers money as well. What's wrong with giving people a choice, Mr. Ryan?

Comments (22)Add Comment
Dean gives no credit for the humor in ryan's column
written by frankenduf, August 13, 2010 8:26
"under an ever-expansive, all consuming government..."- ok, to be honest, when i first read this, i became filled with terror, and i ran to the shed to take up arms and fight this doomsday fiend...- but then i remembered it's an exact quote from an old fantastic four comic, where they were fighting this evil blob that kept growing (i think thing eventually squashed it)- at that point, i just got nostalgic and chuckled
rationing is needed., Low-rated comment [Show]
Time is money
written by nancycadet, August 13, 2010 8:45
Dean, You probably spent more time correcting the article than it took the "reporter" to write it! But, thank you for the intelligence, math skills, and common sense---all of which are sorely lacking in our most famous newspapers' editors and writers.
I agree, also, that US citizens should be able to buy into other countries' medical systems with their Medicare or other funds. Again, it makes sense.
...
written by Stuart, August 13, 2010 9:50
Actually, I think that we should test Mr. Ryan's sincerity more directly. Let's make sure that he is telling the truth when he says that members of Congress get the same health care as the medicare recipients: replace their existing health care options with medicare. Whatever "vouchers" are received by the public would be received, in exactly the same amount and under the same conditions, by members of Congress. Of course every member of Congress has much higher than $80K of income, so their vouchers would be only half-vouchers---and most members of Congress have far more than $200K, when all of their income is counted, so...I guess under Mr. Ryan's plan most members of Congress would get no health care benifits at all. That seems fair, doesn't it?
This is what Politicians do
written by floccina, August 13, 2010 11:28
This is what Politicians do, they saying things to get and keep voters is their main concern so they do not check the facts as well as they should.

Now we the FICA tax payers and we the SS and medicare recipients need to be more honest about SS and Medicare. First let's all admit that they are welfare programs where the young pay for the old. Then we can debate paying more SS to those that earned more. We can debate the structure of the taxes perhaps exempting low income people. We can debate the ways to get people to opt for less or cheaper medical care.
You've missed the point
written by Bruce, August 13, 2010 11:35
Ryan's entire point is that the projections put forth for medical care cost declines are unrealistic. He cites Foster as support for that position. Your post equates to saying "if we assume Ryan's main point is incorrect, then all his conclusions can be proven incorrect".

Assuming for a minute that Foster is right, then Ryan's points are valid - the program has a shortfall in the tens of trillions ($38 trillion) and it will soon encompass a large part of the federal budget. The spending cuts aren't being used to "shore up" a trust fund, but rather are being diverted to other programs (if I claimed to be "saving" $100/month for a new car, but then spent the $100/month on dining out, it would be silly of me to claim I was saving money for a new car).

Sincerity?
written by leo, August 13, 2010 11:58
So the guy's a sincere right-winger? So what? That still means the kind of solutions he comes up with are the political equivalent of malpractice.
...
written by izzatzo, August 13, 2010 12:31
One time when I was just a baby Teabagger sitting on my Founding Fathers knee I learned that rationing and raids and tea taxes and stuff was evil incarnate and the only way to stop it was to take guns to political events and strut around yelling about death panels and stuff so the socialists would get the message to keep their hands off my privately earned government entitlements paid by other peoples taxes and stuff like that and that's why I support Paul Ryan because he understands that something like Medicare can't go on forever like a perpetual force because someday it will run into an immovable object and create scarcity like he discovered on Google which can be cured by vouchers. And stuff like that.
Silly?
written by diesel, August 13, 2010 1:17
Dean's proposal that Americans be allowed to use Medicare to buy foreign health care may be more a debating point than a substantive shift in resource allocation, but it isn't "silly". More than a few of us along the northern border have gone to Canada for dental care, especially for major work such as crowns. Less expensive, no waiting, excellent care. I'm sure retirees living in Costa Rica, Mexico and Europe would be happy to see his idea implemented.
SufferWell
written by Roger Hancock, August 13, 2010 1:38
If Congressman Ryan is going to attack entitlements, he should attack them all - including the multitudinous ones granted to the wealthy (such as 15% tax bracket for investment income, tariffs to protect business, many tax incentives for large businesses and investors, etc.) rather than focusing exclusively on those least able to cope with today's expensive living conditions.
You are double-counting
written by AB, August 13, 2010 3:12
Dean writes: "The accounting used by the Obama administration with the Medicare savings is the standard accounting used for trust funds for decades."

Who cares if it has been used for decades? It is either right or wrong. Both Richard Foster and the CBO say it is wrong, that you cannot count the Medicare cuts as both strengthening Medicare and being used to fund new entitlements. This is more of that basic arithmetic you accused Paul Ryan of not understanding.
...
written by VictorLaszlo, August 13, 2010 4:02
You nearly lost me with "professional left." That's not a real thing. It's a silly epithet made up by Gibbs or some speechwriter just a few days ago.

I'm sure Gibbs a) is a volunteer and b) never makes statements he personally disagrees with as part of his job.

What's that? Oh. Oh I see. So Gibbs himself is a "professional centrist" or something.

Point being, "professional left" is a silly epithet made up by a hypocrite. It needs to die quick.
It's all about the 'horse race'
written by Christo Gilberti, August 13, 2010 4:31
Paul Ryan is a contenda; the media can't let this opportunity go by. He's too good looking, and young to boot. Look out Sarah Palin.
...
written by zinc, August 13, 2010 6:17
Paul Ryan is Representative from wisconsin, ground central to the worst welfare program, other than the military industrial complex, ever devised: the agricultural subsidy. He is not the only sucker from ag states that are turning the US into a comic circus. Senators and Representatives from Montana, the Dakotas, Arizona, Texas, Michigan, Nebraska, Kansas, Georgia, etc have siezed the high ground about "welfare" reform, safe in their smugness about the lobsided and obscene agricultural subsidy. I, personally, have had enough of trading high paying manufacturing jobs, with a multiplier of 3/1, for agricultural jobs with a multiplier of -.2 so that these fools can sell subsidized agricultural products to the rest of the world.

Duh ! Fwee Twade.
The New York Times loves Ryan just as much
written by Jim, August 13, 2010 9:40
The New York Times article on Ryan is could have been written by him. It's a reminder of the bipartisan nature of the forces aligned against the average American.

Jim
commentsongpe.wordpress.com
Realism
written by Lord, August 13, 2010 9:42
Ryan complains the current approach isn't politically workable; the problem is, his is even less so. If congress won't stick to the current plans, what likelihood is there of sticking to even more draconian ones, and don't believe they are not. His is only an attempt to kick the can further down the road, though the higher deficits it would induce would boost the economy.
...
written by Lou Kaye, August 13, 2010 10:41
Actually, the federal government already "vouches" Paul Ryan's health insurance since we (taxpayers) pay about $9,200 of Ryan’s family health care. He co-pays about $4,300 a year for a grand total of $13,500. Numbers are approximate. But Ryan intends on funding his proposed Medicare vouchers by annulling health care tax credits private employers can claim on their employees. The bottom line is: He wants to end private employer based health care benefits once and for all. His plan has nothing to do with an individuals care quality or affordablity.

So, how does he intend on funding federal employees health care benefits? He doesn't. In fact, this where he claims everybody will have the same government plan as congress does - because he'll get to keep his employer-based health care under his plan.

Very slick.

"Raiding Medicare"? Actually, it may not be so inappropriate
written by Nerrie, August 14, 2010 8:28
Remember that even now, many doctors won't take Medicare patients.

So if you suddenly spend much, much less on Medicare, before developing extensive, well-tested alternatives, it is likely that seniors will suffer seriously and needlessly. Such high-handedness may well be considered "raiding."
What CBO said
written by Jim Luckett, August 14, 2010 2:08
The CBO report cited by Ryan actually shows no debt crisis under the baseline scenario which tracks what would happen under current law. The debt crisis scenario in the CBO report assumes more tax cuts (extension of the Bush tax cuts, indexing AMT). So, this is actually warning us not of the unsustainability of medicare or other entitlements. It is warning us of the unsustainability of more tax cuts.

The correction of the error in the report about the effects of crowding leaves this point intact. It would be a much better refutation of Ryan to point out what I point out above.
Bad math
written by NM, August 14, 2010 5:00
It looks to me like your math is a little lacking here. For instance, in 2085 the shortfall in the intermediate cost case is 1.66 percent of GDP (455,253 billion, or 455 trillion), which equals 7.553 trillion. And that is just for one year. I am not going to do the math for the remaining years, but it is clear that it would total into the tens of trillions, as Ryan said.

I am not sure where you get your .3 percent figure, but the percent shortfalls in the document you referenced are annual shortfalls, not cumulative. The summary statistics, it looks like to me, are average annual numbers. It looks to me like Ryan is right about the numbers.

By the way, it also looks like this projection assumes gdp growth of >4%. Sweet! I have some beachfront property in Arizona to sell you also.
Paul Ryan could you look into these Health Insurers
written by Scott ffolliott, August 15, 2010 9:06
CMD Calls For Federal Investigation of Health Insurers
http://www.prwatch.org/node/9359
Ryan's Roadmap leads only to the castle.
written by Jack E Lohman, August 16, 2010 10:37
Let’s call this what it is. Congressman Paul Ryan wants to privatize Social Security and Medicare, not because it saves money for the taxpayers, but because “private” banks can give campaign contributions and “public” entities can’t. Add in their corporate profits, executive salaries and bonuses and “private” will be more costly and less useful.

Taking people off of Social Security and putting them onto food stamps, which is what will occur, is foolish. As is moving people from Medicare to Medicaid. But I will agree with Ryan that ObamaCare is atrocious; the most cost-effective system would have been to extend Medicare to all. Its 95% ownership by private doctors and hospitals is a winner, and though not perfect (yet) would save our nation over $400 billion in unneeded administrative costs.

And incidentally, would have allowed companies to better compete with foreign product whose manufacturers do not fund their health care systems. More American jobs would be created.

But I digress. Can you imagine the crash of Social Security two years ago with the rest of the market, had President Bush won SSI privatization in his first term? The taxpayers would again have had to bail out the SSI losses, though by now we have become pushovers.

And understand this: private Medicare already exists as an option, as 20% of seniors have chosen. It’s called Medicare Advantage and costs the taxpayers 17% more than traditional Medicare. I thought private was supposed to be less costly than public, but the Pols defend it because the private companies are very, shall we say, “politically active” with their cash.
Save the Bush tax cuts???

As a former small business owner I can assure you that ZERO of my colleagues were in the top 3% of wage earners that would be affected by letting the Bush tax cuts expire. And if we wanted to expand business and create jobs we’d simply use pre-tax company checks rather than writing a personal after-tax check. Too simple?

Besides, those making over $1M a year are not investing in America. They invest where workers get paid $1 per hour and profits are high and their economies are growing!

The bottom line is that the poor people are not going to pull us out of our recession; only the rich people can. And that will take a repeal of the tax cuts, at least until we get our feet on the ground.

But our core problem is far more serious than all of the above. Taxpayers (and Ryan) have yet to understand that politicians spend money because the special interests WANT them to spend money on pork and other no-bid contracts and giveaways. And these special interests fund the elections so they get what they want. And these corporate executives give money because money works. Go figure.

And when state and federal money goes to the Fat Cats instead of to communities in revenue sharing, local taxes must rise to compensate. Fighting that change at the local level does not change the corruption at the top.

Nothing is going to change until we have public funding of campaigns. If politicians are going to be beholden to their funders, those funders should be the taxpayers. And at $5 per taxpayer per year it would be a bargain.

But Paul Ryan has not lifted a finger to fight the cause; he is too focused on the effect. And moving up the Republican ladder.


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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.

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