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If He's Ryan He's Lyin'
CBO shows that Ryan plan would be devastating

by Bryan Zepp Jamieson
April 18, 2011

Back last month, Republican House Budget Committee Chairman Paul Ryan presented a proposed budget for 2012 and beyond. The House voted to approve the proposal on a straight party-line vote the other day, and it will go to the Senate to die.

But the plan shows just how vicious and antagonistic the Republicans have become to the poor and the elderly in America. Ryan takes a meat ax to granny, the kids, and the guy who mows your lawn.

First off, the proposed budget doesn't address Social Security at all. That is bound to perplex right wingers who have been running around howling that Social Security is what is bankrupting America, but the fact is SS isn't a part of the debt problem. It will run in the red from about 2024 to about 2037 (under the most pessimistic) estimates, whereupon it will move back to a positive balance as the boomers die off. Even the worst scenario for SS can be “fixed” by simply raising the cutoff point for having to pay payroll taxes to about 50% higher than they are. That would ensure SS maintained a positive balance, and by the rosiest scenarios, it would run a huge surplus.

But if Ryan was smart enough to step gingerly over the third rail of Social Security, he took the third rail of Medicare and licked that sucker.

According to CBO Chairman Robert A. Sunshine (Swear! I didn't make that up!), “Under the proposal, most elderly people who would be entitled to premium support payments would pay more for their health care than they would pay under the current Medicare system. For a typical 65-year-old with average health spending enrolled in a plan with benefits similar to those currently provided by Medicare, CBO estimated the beneficiary’s spending on premiums and out-of-pocket expenditures as a share of a benchmark amount: what total health care spending would be if a private insurer covered the beneficiary. By 2030, the beneficiary’s share would be 68 percent of that benchmark under the proposal, 25 percent under the extended-baseline scenario, and 30 percent under the alternative fiscal scenario. Federal payments for Medicaid under the proposal would be substantially smaller than currently projected amounts. States would have additional flexibility to design and manage their Medicaid programs, and they might achieve greater efficiencies in the delivery of care than under current law. Even with additional flexibility, however, the large projected reduction in payments would probably require states to decrease payments to Medicaid providers, reduce eligibility for Medicaid, provide less extensive coverage to beneficiaries, or pay more themselves than would be the case under current law.”

As anyone who has ever compared Canada's health system with America's knows, the cost of medical care through private insurers is significantly higher than a single-payer program, which is not profit-driven, would cost. About 60% more, in fact, and that doesn't even include so-called “premium” services such as elective cosmetic surgery or procedures where doing nothing at all would not adversely affect the health of the individual.

Presently premiums and out-of-pocket expenditures are about 25% of what a private health care plan would cost under existing conditions. The CBO estimates that might rise to 30% by 2030, based on the fact that health care costs are rising faster than the overall rate of inflation. Under the Ryan plan, that share of cost would rise to SIXTY-EIGHT percent. In other words, a senior, right off the bat, would be paying nearly triple what he is now for goods and services. Even worse, it would be means tested. Each year, the senior beneficiary would have to report his previous year's income to Medicare, and anything over $7,800 would be subject to an increase in share of cost. Aside from the fact that this would require a huge new bureaucracy, and a whole new universe of hassles and concerns for the elderly, there is the fact that for anyone on Social Security, this would be, in effect, a massive tax on that Social Security. And on top of that, out-of-pocket would go up, as well.

If you envision a future where you are 80 years old, have chronic health problems, and live off your Social Security (and for over half of all people, that's what the future holds), then that's what you have to look forward to: much higher medical costs (60% higher or more), much higher out-of-pocket expenses (nearly three times as much) and a massive new invasive bureaucracy that every twelve months will demand an accounting of every penny you made.

Oh, and that will become part of the medical costs, as well.

Gosh, who could possibly refuse a future like that? There's already a lot of people who have to choose between prescription medications and skipping meals, and this will make that far worse.

Ryan's plan, according to the CBO, will eventually cut government spending to 14% of the GDP. That would be the lowest level seen since 1932, a truly wonderful year for working people and the poor in America.

Really, it was heavenly for them. But communists infiltrated them, and persuaded them to stop buying food and feeding themselves and their children, and to stop buying clothing, and stop paying rent or mortgages. Just pure class war, it was. They resented the rich so much that they lost their jobs, their homes, and their health. Republicans have never understood why they did that, either.

The CBO does state that spending will climb under present scenarios, and revenues will have to climb significantly above historic levels in order to pay for same. And while that's nothing to look forward to, the fact is that since the advent of Reaganomics, we've been paying revenues significantly below historic levels—amounting to about $13 trillion not paid over the past 30 years. The debt is a little over $15 trillion, and interest on that debt is about a half trillion. Hmmm.

Oh, did I mention the proposal included another huge rounds of tax cuts for the major corporations and the wealthy? Just so you know your sacrifice is for a noble cause... Ryan, perhaps in hopes of making it look like some serious thought had gone into his proposal, had two scenarios: The extended-baseline scenario which assumed that most programs relating to health care would be intact, and an alternative fiscal scenario in which Republicans would be able to dismantle the Health Care Reform that was passed last year, and give insurance companies the ability to capriciously refuse to cover people again.

Of these, Chairman Sunshine remarked dryly: “Both of those scenarios deviate significantly from the nation’s past budgetary experience.” Translated from bureaucratese, that means, “Ryan thinks he's blowing rainbows and unicorns out his ass, but he's really just blowing toxic black smoke.” There's no real need to get alarmed over the Ryan proposal. It doesn't have a prayer in the Senate. But it needs to be remembered because it so clearly shows what the Republicans want to do: give billions, even trillions to the insurance companies, at the expense of the poor, the elderly, and the sick. And the huge bureaucracy and hassles show what an utter joke their claims that they want to get government off our backs really are.

Interesting note: government spending in 2001 was the lowest, as a percentage of GDP, that had been seen since 1981. It was only a bit higher than it was in those halcyon days of small government, 1952. Spending jumped under Bush and the GOP congress, and then the Great Recession hit, worsening the situation.

Had Gore taken office in 2001, and followed Clinton's policies, it's likely that the national debt would be retired by now. We probably wouldn't be in Iraq and Afghanistan, and there's even a possibility the twin towers would still be standing, and we wouldn't have Gitmo and all the police state apparatus that burdens our lives today.

Not only is Ryan lying to us, but the Republican party as a whole have been lying to us for 30 years, and they've cost us trillions.

Time to throw out the thieves!

Posted: April 22, 2011

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