On April 5, 2011, Rep. Paul Ryan (R-Wis.) introduced a sweeping budget proposal, The Path to Prosperity: Restoring America's Promise (House Committee on the Budget 2011), designed to trim the federal budget by nearly $6 trillion over the next decade, (1) Greeted with much fanfare by pundits and legislators on both sides of the aisle, the Ryan plan was touted as a bold and courageous effort to start a serious conversation about our nation's fiscal health. Among the key elements of the plan were a change from traditional Medicare to a premium-support (or voucher) program for the purchase of private insurance; a conversion of Medicaid from an open-ended entitlement to a federal block grant; and a dismantling of key provisions of the 2010 Patient Protection and Affordable Care Act (ACA). Other critical provisions included retaining the income tax reductions enacted under President George W. Bush; significant reductions in safety-net programs such as the Supplemental Nutrition Assistance Program (SNAP) (formerly the food stamp program) and low-income housing assistance; and a reduction in Pell education grants for low-income students. The Ryan-inspired budget proposal was not simply a trial balloon. Before its defeat in the Senate, it received robust support and was passed by the House of Representatives.
With all due respect to Congressman Ryan and his admirers, I want to take issue with the characterization of his effort as providing a valuable public service. To be sure, the recent acrimony over our budget debates and efforts to increase the federal debt ceiling has demonstrated that the time for serious bipartisan discussion of our long-term fiscal health is long overdue, as is the necessity for constructive compromise solutions. But from my perspective, Ryan's plan falls short of addressing these critical needs. While his proposal may be bold, it is hardly courageous. First, by proposing a radical restructuring of two basic social insurance and safety-net programs, it provides little room for compromise, and as such is likely to be a non-starter for a serious discussion of our fiscal dilemma. Instead, it perpetuates the divisiveness in our politics and in attempts to develop meaningful public policy. Next, the Ryan proposal for Medicare raises serious issues regarding intergenerational equity, and the budget cuts affecting vulnerable populations exacerbate the three decades long problem of growing income inequality. Finally, by eliminating key provisions of the ACA, it does little to ensure equitable access to meaningful health insurance coverage and payment for health care by nonelderly Americans, especially those of modest means who find themselves the victims of cyclical economic crises.
In this column, I explore some implications of the approach laid out in the Ryan budget proposal. My reason is not to attack a convenient "straw man" and easy target for rebuke. Indeed, given the prominence of conservative elements in Congress, we are likely to revisit elements of the proposal in subsequent budget debates, and it may gain new currency after the pivotal elections of 2012. Nor is nay purpose to be a naysayer who unabashedly supports the status quo and is resistant to any meaningful change to our conventional social insurance and safety-net programs. Instead, I believe it is important to recognize that policy approaches that emphasize significant program restructuring and spending reductions, but ignore their second-order implications for our most vulnerable citizens, are short-sighted and incomplete. At the same time, I believe that any meaningful and thoughtful change in our public policy requires serious efforts to avoid ideologically driven proposals and must seek compromise and shared sacrifice.
The Ryan Proposal and Health Care
Recognizing that controlling health care spending is key to restoring our nation's fiscal health, the Ryan proposal imposes major changes to Medicare and Medicaid. …