GWEN IFILL: And we return to politics with more on Paul Ryan, the congressman.
As chairman of the House Budget Committee, Ryan is best known in Washington as the author of a fiscal blueprint that passed the GOP-controlled House, but stalled in the Democratic Senate. It would change Medicare to allow future retirees the option of government subsidies for private insurance, index Medicare payments to inflation, and raise the eligibility age from 65 to 67. It would also cut Medicaid, which provides support for the poor, disabled, and elderly, largely turning it over to the states.
Will Ryan’s vision help or hurt the Republican ticket?
Joining us to sort through the particulars are Robert Greenstein of the Center on Budget and Policy Priorities, Patrick Knudsen, a senior budget expert at the Heritage Foundation who spent 20 years working on budget issues on Capitol Hill, and Steven Dennis, a reporter for Roll Call who has covered the Ryan plan.
Steven Dennis, let’s talk about Paul Ryan, budget wonk. How successful was he at that?
STEVEN DENNIS, Roll Call: He was very successful.
You know, he was the guy when the Republicans were down and out after losing the majority in 2006, who helped them pick up the pieces, come up with a new plan to get behind and rally around.
And when he — when they took back the majority, and he had his plan, there were a lot of folks in his own party, in his own caucus, his own conference who were afraid of his plan, afraid of the Medicare proposal, afraid of the deep cuts.
And he got — he managed to get them to get behind his plan and rally around it. And instead of having a budget passed by just one or two votes, the way it normally is done politically, because it’s too dangerous to vote for real change and real pain, he got his folks to overwhelmingly pass it. They got behind it and rallied around it.
And it’s really become something that, if you’re a Republican and you don’t support the Paul Ryan plan, you have a potential primary challenge. You have trouble from your base. He is a rock star in the Republican base.
GWEN IFILL: Is it the power of his charm or is it the power of his ideas?
STEVEN DENNIS: It’s both.
One of the things that Paul Ryan brings to table is, he’s put some serious ideas out there, ideas that really resonate in the Republican base, ones that really change the system of benefits and entitlements that we have, dramatically reducing many of them, including things like Medicaid for the poor, in ways that Republicans have dreamed of doing, but haven’t had really the courage or the unity to get behind.
And he has this happy warrior mentality and persona that really comes across well to that base. And the question now is whether he can translate that to the national stage.
GWEN IFILL: Robert Greenstein, let’s talk through some of these, starting with Medicare. Good or bad, what he has planned to do?
ROBERT GREENSTEIN, Center on Budget and Policy Priorities: Well, our analysis suggests it would cause very serious problems.
He would basically convert Medicare for people turning 65 in the future into a voucher. Now, you could use it to buy private insurance or you could try to use it to keep traditional Medicare, but if the healthier people went into private insurance, traditional Medicare would become more costly. And that would be expensive.
He also would end the provision of the health reform law, the Affordable Care Act that filled in the donut hole. So many middle-income seniors would have higher drug prices. And one of the striking proposals is he would raise the age at which you could start to get Medicare from 65 to 67. But, at the same time, he would repeal the provisions of the health reform law that set up these new health insurance exchanges for people to go into.
So, 65 and 66-year-olds would largely be left to try to buy insurance in the current type of health insurance market, where people at that age often can’t buy a policy.
GWEN IFILL: Patrick Knudsen, what he just described is an accurate description of what’s in the plan. But then you take it to, is it a good thing or a bad thing? Is it a necessary place for America to be going right now?
PATRICK KNUDSEN, Heritage Foundation: It’s definitely necessary.
And I think, even Bob would agree, that the fiscal path we’re on now is simply unsustainable. Medicare is a particularly good example. It’s going bankrupt. Everyone is fully aware of that. And it has a severe demographic problem. Some time in the next 20 years or so, we will have 80 million retirees who will need medical care.
Medicare itself, as currently structured, can’t sustain them. What Chairman Ryan has tried to do — and it’s not a particularly new idea — he has tried to describe a new way to restructure Medicare, so that it will be fiscally sustainable in the future, and without overburdening the federal budget.
GWEN IFILL: What about Medicaid?
PATRICK KNUDSEN: As Bob described, the idea here is to move more control back into the state governments, let them tailor their Medicaid programs according to their own populations.
It’s a concept that worked reasonably well with welfare reform in the mid-1990s. And he’s simply trying to apply that to the Medicaid program.
GWEN IFILL: Has the time for austerity come, Mr. Greenstein?
ROBERT GREENSTEIN: We have to make very tough choices to get our fiscal house in order, especially as the economy recovers.
But let’s take Medicaid as an example here. What the Ryan plan does is it cuts federal funding for Medicaid by a third by the 10th year. By Ryan’s own numbers, Congressional Budget Office numbers he requested, it cuts it in half by the 20th year.
Medicaid already pays doctors and hospitals much less. It costs 20 percent less per person than private insurance. Where would the savings come from? The nonpartisan Urban Institute looked at it and said the Ryan proposal would lead to between 14 and 27 million low-income people becoming uninsured. These are some of the most vulnerable people in the country.
And one more thing. If we need tough budget choices — you know, Ryan gets credited for courage in proposing deep cuts in Medicare. I think courage is when you take on your party’s base, not when you play to it.
And just to finish the thought, massive tax cuts in this plan, the Ryan plan, for the wealthiest people in the country, Tax Policy Center says average cut $265,000 a year for millionaires. So, a lot of the savings from big cuts in Medicare and Medicaid would go to fund tax cuts, especially for the richest…
GWEN IFILL: Let’s start with the tax cut question, Mr. Knudsen. And then you can go from there.
PATRICK KNUDSEN: The tax cuts aren’t quite what Robert suggests.
But let me try to go back to the vulnerable people that Bob has spoken about. Under the current situation, if these programs continue the way they’re going, they’re going to overwhelm the economy, and the people who are going to suffer most from that are not the millionaires. It’s the poor people, the very people Robert is concerned with, and I understand that.
What we need is to pare back government spending so that it’s not overburdening the economy anymore to allow for more growth. And that will benefit everybody.
GWEN IFILL: What did he say wrong about tax cuts?
PATRICK KNUDSEN: What Ryan is trying to do is change the tax code into two brackets, essentially, 10 percent and 25 percent, and eliminate most of the special deductions.
Now, if that looks like a big tax cut for wealthy people, Robert may see it that way. I don’t. I think it’s a tax benefit for everyone because of the simplification.
GWEN IFILL: Steven Dennis, how does this plan, this Ryan plan that’s out there, whatever version it currently is in, how does this compare to anything we have heard from Mitt Romney? Are they on the same page, as the Republican presidential nominee said today?
STEVEN DENNIS: They’re in the same ballpark. But they’re not exactly on the same page.
Paul Ryan’s plan is a lot more specific. It still does — it still leaves out a lot of the specific tax breaks that he wants to eliminate. He doesn’t say whether he will keep the home deduction or health care tax breaks, which cost a lot of money and help a lot of people. So, they’re both equally vague on some of those issues.
But the general gist of where they’re trying to go is roughly the same. Romney’s been pretty vague about where he would cut spending. Ryan’s been a lot more detailed, although still on a lot of these individual programs, the detail is not quite there for either of them.
I think one thing that is interesting is how Paul Ryan’s own tax policy proposals have evolved. You know, his original road map plan would have eliminated taxes on capital gains, dividends and interest, which, you know, we have reported that that would have been a 1 percent tax rate for Mitt Romney in 2010.
Now, he didn’t put that in his budget, and, basically, because you couldn’t pass that in the Congress. And, instead, he has this sort of tax reform idea of 25 percent, 10 percent. Mitt Romney said, well, I will have a 20 percent across-the-board tax break and delete some deductions to pay for it.
The problem is, it’s hard to get the math to add up so that you’re not getting a big tax break for the wealthiest Americans. Romney again on “60 Minutes” said, hey, I’m not going to have the wealthiest Americans pay a smaller share.
GWEN IFILL: But he didn’t say how.
STEVEN DENNIS: But he didn’t say how. And I think that that’s going to be a real problem for the Romney folks.
Are they going to either put more detail out there, or how are they going to handle this?
Because, you know, the Obama campaign has been basing their campaign for the past year — they knew the economy wasn’t going to be great. They have been basing their campaign for the last year on the issue of fairness.
And they can jump for joy over this Ryan pick by saying, look, here’s a guy who is cutting Medicare. He’s cutting Medicaid. He’s cutting food stamps. He’s cutting transportation. He’s cutting everything. And he’s not willing to raise a penny of taxes on the wealthiest Americans.
GWEN IFILL: So, which argument — we don’t have a lot of time — which argument has the most traction right now, Bob Greenstein?
ROBERT GREENSTEIN: Well, I’m not sure what has the most traction politically. But I think this is a very stark contrast.
The Ryan budget takes over 60 percent of it budget cuts from programs for the most vulnerable Americans: food stamps, Medicaid, housing assistance. And it — the math doesn’t add up to avoid a huge tax break at the top, because whenever we have cut tax rates before, like under Ronald Reagan, the way that they avoided it being a huge tax cut at the top was to raise the tax rate on capital gains, so that it was the same as the regular income tax rate.
GWEN IFILL: Mr. Knudsen…
ROBERT GREENSTEIN: Ryan has said he wouldn’t do that.
GWEN IFILL: We really have to be fair here.
PATRICK KNUDSEN: Just to put it simply, we are now in fourth year of trillion-dollar deficits. We’re on a path in which the public debt will be twice the size of the entire economy.
We need to do something about that. You may disagree with portions of Chairman Ryan’s proposal, but you can have no doubt that something has to be done to correct the path we’re on.
GWEN IFILL: Patrick Knudsen, Bob Greenstein, Steven Dennis, thank you all very much.