The Ryan Medicare Plan Could Work Under the Right Circumstances

Congressman Paul Ryan (R-Wisconsin) has proposed that Medicare be replaced by a subsidy paid to seniors to purchase health care insurance. Medical care would be paid by insurance companies instead of the federal government. Ryan has been excoriated by seniors for this proposal. He has been accused of throwing Grandma under the bus. In fact, this radical restructuring of Medicare could work if several conditions were true. These involve availability and affordability.

Firstly, plans need to be available to all seniors. Even a 92 year old Alzheimer's patient with end stage lung cancer who smokes should be able to purchase a policy. Currently, Medicare covers everyone over 65.

Secondly, the subsidy should be high enough that the part seniors would have to pay out of pocket for premiums would be about the same as they do today. Under Medicare seniors pay a portion of their premiums and these policies should be similar. Additionally, this subsidy should be indexed so that medical inflation does not make the policies unaffordable.

Thirdly, the level of coverage under these policies should be similar to that presently covered by Medicare. If the coverage is less, these plans would not provide the necessary value.

Fourthly, the copays for procedures and doctor visits should be similar to what Medicare requires now. Otherwise, seniors would not be able to afford these. These copays, should be indexed as the premiums should.

Unfortunately, it is unlikely that these four conditions would occur. What financial incentive is there to cover those seniors who are near death and whose conditions cost millions to treat? The problem is that seniors are the most expensive medical population; they have more serious conditions that need the most expensive treatments than any other population. Even if the government required policies to be available, how could they keep the price of these policies in check?

It is seductive to have a policy where private enterprise provides and pays for the services instead of the government. Unfortunately, competition alone will not make insurance companies cover the expensive aged infirm nor will it make these policies affordable; the problem of medical inflation still needs to be addressed and this proposal doesn't. Insurance companies must make money to stay in business and that means that medical care would have to be rationed in some manner.

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What you are not being told and what we need to do about the federal debt and budget deficits

With all the talk of the federal debt and budget deficits, there is a lot that is not being discussed. Yes, the deficit is huge and worrisome, but we need to hear the truth before we make huge spending cuts that would affect millions.

In 1980 the deficit was less than $1trillion. By the time Bush41 left office, the debt had ballooned to nearly $5 trillion. That was an increase of 500% that was directly attributable to the Reagan tax cuts. Reagan had promised to offset the tax cuts with budget cuts. Those never happened. Republicans claimed that they were hampered by Democratic congresses. However, they could have played hardball and used their filibuster power to push through cuts.

The debt remained around $5 trillion during the Clinton era. However, by the time Bush43 left office, the debt had ballooned again to $10 trillion or an increase of 100%! Again this was attributable in part to tax cuts that were not matched by spending cuts. In fact Bush43 pushed through new spending on two wars, Medicare part D, and the Bank bailout.

Now, during Obama's tenure the debt has increased 40% to nearly $14 trillion. What has alarmed everyone is that this happened in only two years. However, this is due to the Bush43 legacy and the Obama stimulus program. That program is a one-time event. The Bush43 legacy endures.

Since 1960, only two presidential administrations have had budget surpluses: Johnson and Clinton. Republicans won't tell you this.

A mix a budget cuts and tax increases is the best solution for the problem. Budget cuts alone are not politically feasible. Tax increases alone will not reduce the deficits.

Here is what I think we need to do:

• wind down our involvement in Afghanistan and Iraq - get out by 2015
• significantly reduce our overseas military footprint - wean our allies (except perhaps Japan and Korea) away from our military umbrella
• eliminate wasteful and unneeded military programs
• raise the retirement age to 70 and eliminate early retirement for all under the age of 60 - medicare and social security would not be available until age 70, period
• lift the cap on social security and medicare taxes so that all income is taxed - why do only the poor and middle class contribute when everybody can draw benefits?
• means test medicare and social security - those with millionaire incomes should pay a portion of their medicare and get less social security
• raise the federal tax rates to Clinton era levels - there was unprecedented wealth creation during this era at these tax rates
• reduce or eliminate most tax deductions
• eliminate different filing rates for married, head of households single, joint filing etc. - everybody pays individually at the same rates

With the above suggestions we could actually have budget surpluses, be able to pay down the debt, the poor would still have a safety net and the middle class would still get their benefits.

Playing with the debt limit is playing with fire

Up until this year, raising the federal debt limit was a non-event. Every so often it was raised and reported on page eight of the newspaper. Even Alan Greenspan, former Fed Chairman, wondered aloud why we even have a debt limit. Now the Republicans and especially the Tea Party want to use the upcoming vote to raise it to extract maximum concessions (read: budget cuts) from the Democrats and the President.

Last December the Republicans complained that companies weren't creating jobs becuse they were uncertain about the state of taxes and that the Democrats were keeping the situation murky. Now the shoe is on the other foot. It is the Republicans who are muddying the waters by talking about not raising the debt limit. If the limit is not raised, the federal government will have to stop paying its bills, or make drastic cuts. Federal obligations may be in jeopardy and companies may not get paid by the federal government on time. This could lead to job cuts instead of job growth.

The American electorate did not give the Republicans last November a majority in the House of Representatives only to cut spending. They want job creation and economic growth. That won't happen if the debt limit is not raised.


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So the Republicans want to repeal the new health care law...

I don't get it. The Republicans are good at being against things but they never tell you what exactly they support. They tell you they are against government spending, but don't tell you what they would cut.

Now they want to repeal the new health care law even though the non-partisan CBO (Congressional Budget Office) says repeal would add $230 Billion to the deficit. They claim the CBO is using funny logic. When it suits them, they quote the CBO, but when it doesn't they pooh pooh it. In addition, they have no alternative except for the old system which was unworkable.

So now they want to waste tax payer dollars spending time trying to repeal health care when they know it won't be repealed in the Senate, and Obama would veto the repeal anyway. They need to spend time finding ways to balance the federal budget, paying down the debt, and creating conditions that favor job creation; and they need to do this in a way that it will pass both houses of congress and be signed by the president.

Be careful what you wish for! Republicans are not necessarily the answer to bad Democrats.

So you plan to vote for Republicans as a protest against what the Democrats are doing? Be careful! The cure could be worse than the disease. Republicans got us into this mess and the Democrats made it worse. Now Republicans want to get us out by making things even worse.

• They want to lower federal taxes without saying how they would pay for it causing the deficit to balloon further. The Bush tax cuts are a main contributor to the current out-of-control deficits.
• They want to cut the federal budget but won't tell you where. "Trust us!" they tell us. "We'll find waste, fraud and abuse." But one person's lifesaving program is another's waste. Do you trust them to not cut your favorite program?
• The few who will tell you where they will cut the budget want to abolish the departments of Commerce, Labor and Education. But these have programs and offices that do things that either the public wants or are mandated by the constitution. These include the Census Bureau, whose function is mandated by the constitution, and the Bureau of Labor Statistics, which provides non-partisan economic data necessary for policy making and all kinds of businesses of business activity.
• They want to privatize portions of Social Security and Medicare tying the results to the stock market. Our 401K accounts were devasted during the current recession. The same would happen to these new private accounts they propose. When you ask the seniors in the Tea Party whether they want to keep Social Security and Medicare as they are, an ovewhelming majority says yes.
• Some have proposed modifying the 14th amendment to disallow children born of non-residents on US soil from getting automatic citizenship. Your ancestors may have been non-residents at the time you or your parents were born.
• They want to repeal healthcare reform that forces insurance companies to cover pre-existing conditions. That is very important to many who lose their jobs and face a gap in coverage.
• They want to roll back regulation on the banks and financial institutions that participated in getting us into this mess because they were already lightly regulated.
• They don't want bipatisanship. They don't want compromise. So if they are in the majority, they and the President won't get anything done.

You need to think twice before you vote for Republicans for whom you might not have otherwise voted.