When the Republicans retake the U.S. House in November, as most expect, and perhaps even the Senate, the question arises: Then what? Paul Ryan, the representative from Wisconsin’s 1st District and the ranking member of the House Budget Committee, thinks he has the answer.
Ryan has published what he called “The Roadmap for America’s Future” an ambitious and detailed set of proposed legislation that would reform entitlement programs such as Social Security, Medicare and Medicaid, the health care system and the tax code. The idea is not only to place the federal government on a path to eliminating the deficit and begin paying down the debt, but to also ease the tax burden, including the burden of compliance, on the American people.
The Road Map’s Executive Summary covers health care, Medicare, Social Security, tax reform and job training.
It’s worth noting the GOP adopted a similar platform on Thursday — the Pledge to America. It differs somewhat from Ryan’s plan. But, still, there is a lot to like in the so-called “Road Map.”
But there is a lot that is going to be attacked. In this election year of 2010, because of the latter prospect, the Republican leadership of the House and Senate has proven reluctant to embrace Ryan’s plan. The theory is that being vague about what one proposes to do if given power makes one less of a target. On the other hand, without a specific mandate, being vague makes actually doing something that much harder.
Ryan’s health care reform suggests a repeal of the current health care reform legislation, a popular position to take. Ryan would make the American health care system more flexible and more market-oriented, which would undoubtedly make it more efficient, competitive and less prone to price spikes. The health care reform includes tax credits to buy health insurance on the open market, transparency in health care cost and quality and reform of high-risk pools. The Medicare portion establishes a payment adjusted for income and inflation and adjusted for risk and medical need.
Ryan’s proposal to reform entitlements will prove to be the most controversial, but also the most necessary. Cost increases in Socials Security, Medicaid and Medicare are driving the deficit and curbing those increases would bring the deficit down and, if sufficient, allow the government to start paying down the debt. The cost-of-living adjustment would be lowered and the retirement age raised.
The most controversial part of Ryan’s proposed entitlement reform is the inclusion of private accounts in Social Security. This would be a great reform that would help Americans save more money over the long run, especially if a prudent investment strategy is followed. Democrats have claimed it will subject peoples’ retirement to the vagaries of the stock market.
Tax simplification will certainly be popular with most Americans. Almost as burdensome as the tax rate tends to be is the trouble it takes to comply with the tax code, with its Byzantine credits, exemptions and other provisions. A number of special interests that have helped to insert those credits and exemptions will fight tax simplification to the last ditch. The Alternate Minimum Tax would be eliminated as would taxes on interest, capital gains and dividends as well as the death tax.
Finally, consolidation of job-training programs is a simple, good government measure that is designed to reduce bureaucracy and provide more funding for actual programs. There should not be too much resistance for this idea.
Does Ryan’s Road Map have a chance of passing? It is not likely to pass in the near term, mainly because even if the Republicans take Congress, President Barack Obama will still have the veto pen. But it might prove appealing for the next president, as the basis of a solution to the fiscal crisis the country finds itself in.
Indeed, just as Jack Kemp’s across-the-board tax cut, which languished in the 1970s, only to become the basis of Ronald Reagan’s economic revolution, Paul Ryan’s Road Map could become the basis of the next revolutionary change in the way government operates.