I really like Paul Ryan and I think that the debate over the general principles of his plan (a sustainable entitlement system, market-oriented health care reform, a tax code with fewer tax expenditures and lower rates) will be very good for the country - if the broad center-right makes its argument competently. We are very far from the cynical and calculated domestic policy stupidity of John McCain's 2008 campaign and we largely have Paul Ryan to thank for the improvement of our public discourse. Still, I don't think that a prospective Republican presidential candidate should run on Ryan's exact proposal. Some suggestions:
1. Listen to Reihan Salam and grow the premium support in defined contribution Medicare at GDP + 1 rather than at the level of the Consumer Price Index. Salam's proposal would still slow down the rate of government-sponsored medical inflation, but without the implicit assumption that the reforms will bring medical inflation for seniors all the way down to the broader rate of growth of the Consumer Price Index.
2. Instead of just eliminating traditional Fee For Service Medicare, adopt the Capretta-Miller approach of having a reformed FFS Medicare compete with private insurance programs based on competitive bidding. The government will offer all seniors a certain level of premium support depending on the senior's income and health condition. Medicare FFS will bid against private companies for the business of those seniors. Medicare FFS will fund its benefits from the premiums of those who choose Medicare FFS. If a private plan can offer comparable benefits at a lower price, seniors can go with the private plan. This way each plan (including Medicare FFS) will have an incentive to offer the most desirable set of benefits at the lowest price - rather than the price set by bureaucrats. Medicare recipients will be more likely to get more of what they want at the price they are willing to pay rather than what some bureaucrat think that they should be allowed to have. The Capretta-Miller plan has several advantages over the current Ryan proposal. As Capretta and Miller point out, the health care market in the US is internally diverse and there are places where a defined contribution version of Medicare FFS will provide better services at a lower price in a competitive bidding environment. Maintaining Medicare FFS on a defined contribution and competitive bidding basis might also gain some support from center-left wonks. These folks command no electoral divisions, but they could influence coverage from some news outlets. I suspect it would also reassure some part of the public to know that rather than traditional Medicare going away, it was remaining as a choice, but that if there was a cheaper plan that suited them better, they could go in that direction.
3. Listen to Avik Roy. Under the current Ryan plan, if senior gets a certain amount of premium support (say, $15,000) but a private plan offers a bid for $13,000 in premiums for a desirable product, the senior has no incentive to go with the cheaper plan. They might as well go with a plan that costs $15,000 in premiums even if they don't especially want the additional medical coverage. At least the $15,000 plan gives the some extra services for the extra $2,000. This is perverse. It contributes to medical inflation while decreasing the actual value that the senior gets from the premium support. The senior should be able to pocket the difference if they pick a plan that costs less than their government premium support. If a senior wants to buy a cheaper health insurance plan that does not cover some higher cost, and lower effectiveness end-of-life procedures (if it comes to that) and instead wants to spend that money to take more weekend trips with his grandchildren, everybody is better off.
This isn't a suggestion for a policy change, but I would be remiss not to remind everybody that the debate over economic policy is necessarily comparative. Our choices are higher taxes, fewer jobs, lower growth and lower quality bureaucrat-rationed health care on one hand and a sustainable patient-centered welfare state with pro-growth and pro-jobs tax policies on the other. Obama should always be tied to higher taxes and bureaucratic rationing of health care. That is where his deficits are leading us, and he is just stalling until he is reelected and the crisis is upon us. So don't let him stall. Hit him now.
I would also add that some presidential candidates would be better positioned to sell this message than others. It would b nice if the Republican presidential nominee had demonstrated the ability to cut spending while maintain core government services and instituted a free market-oriented health care reform that saved the government money, increased worker take home pay, and maintained people's health care security.
Run Mitch Run
Julie has been on fire this week and her highlighting and mocking of Harold Meyerson's reactionary and romantic statism is especially needed. Meyerson's column reminded me of Sidney Blumenthal's description of Walter Mondale's liberalism, "Its credo: anything that has been superseded has proved its worth. If it's gone, it's good. Nothing can be tried that hasn't already failed. The future is the endless rehearsal of the past." Meyerson looks at Ryan's plan to deal with our current and projected financial problems and sees a threat to the past. For Meyerson, the future happened between 1933 and 1966. We must ever live there regardless of changing demographics and economic conditions.
This is a secular faith-based worldview. Any new policies (like defined contribution Medicare and block granted Medicaid) are the past, even if those policies have never been implemented before. Meyerson's is a nostalgic progressivism where the future happened generations ago and anything new must be a return to the past.
Senator Shumer declares:
The dangerous, ideological cuts to Planned Parenthood that passed the House are never, never, never going to pass the Senate," said Schumer. "Let me repeat that, so all those who want to stomp on women's health and women's rights can hear us loud and clear. The dangerous, ideological cuts to Planned Parenthood that passed the House are never, never, never going to pass the Senate.
So Senator Shumer is willing to risk shutting down the government to ensure a few hundred million dollars for Planned Parenthood, and his opponents are extremists?
Exit question: what percentage of Americans think some of our tax dollars should go to Planned Parenthood?
A reader on Megan McArdle's blog does the math:
You can estimate the effects of various proposals in the best case, which is that each percentage point increase in the marginal rate translates to an equal increase in the effective rate. Going back to 2000 ("Clinton era") marginal rates on income over $200,000, let's call it a 5 percentage point increase in the marginal rate, would therefore yield $59 billion on a static basis. Going from there to a 45% rate on incomes over $1 million (another 5 percentage point increase) yields an additional $31 billion. Or, instead, on top of 2000 rates over $200,000, 50%/60%/70% on $500,000/$5 million/$10 million? An extra $133 billion, or nearly 1% of GDP. That's not accounting for the further middle class tax cuts that are usually proposed along with these "millionaires' taxes."
Now, compare this to deficits of $1,413 billion in 2009 and $1,293 billion in 2010, and using optimistic White House estimates, $1,645 billion in 2011 $1,101 billion in 2012, $768 billion in 2013, and continuing at over $600 billion after.
We simply can't balance the budget by taxing only the rich. We have to raise taxes on everyone, or cut expenditures massively.
There's also a principle involved. If we believe in private property, then we believe that property belongs to individuals. The state may tax some of it in order to pay for the government's expenses. High tax rates, except in times of emergency, tend toward the presumption that the government has first claim to the property, and citizens are only allowed to keep that which remains after the government has taken what it wants. Possession of property is no longer a natural right in that scheme. It is a right in the old sense--a dispensation granted by the government (which the government may take away at its whim).
I'll add that we are in an extraordinary situation. Hence very high tax rates might be acceptable, for a short time, to get our fiscal house in order. My guess is that many other Americans think that way, too. But the situation is like the immigration problem. Most Americans would be open to some kind of amnesty, if they believd the border was secure--and that this was not a repeat of the amnesty of the 1980s (fool me once . . .). So, too with federal spending. If the republic really is at risk, very high taxes are justified, but only so long as the risk remains. Making high taxes permanent changes the relationship between citizens and the government, and the meaning of property rights, and is, therefore, not justifiable on American principles.
What, exactly, is the difference between what David Sokol did at Berkshire Hathaway:
Sokol, 54, bought about 96,000 Lubrizol Corp. (L) shares in January, less than two weeks before recommending the company as a target, Buffett said yesterday in a statement. Sokol had started confidential talks with Lubrizol the month before.
And what George Washington Plunkitt called, "honest graft"?
EVERYBODY is talkin' these days about Tammany men growin' rich on graft, but nobody thinks of drawin' the distinction between honest graft and dishonest graft. There's all the difference in the world between the two. Yes, many of our men have grown rich in politics. I have myself. I've made a big fortune out of the game, and I'm gettin' richer every day, but I've not gone in for dishonest graft--blackmailin' gamblers, saloonkeepers, disorderly people, etc.--and neither has any of the men who have made big fortunes in politics.
There's an honest graft, and I'm an example of how it works. I might sum up the whole thing by sayin': "I seen my opportunities and I took 'em."
Just let me explain by examples. My party's in power in the city, and it's goin' to undertake a lot of public improvements. Well, I'm tipped off, say, that they're going to lay out a new park at a certain place.
I see my opportunity and I take it. I go to that place and I buy up all the land I can in the neighborhood. Then the board of this or that makes its plan public, and there is a rush to get my land, which nobody cared particular for before.
Ain't it perfectly honest to charge a good price and make a profit on my investment and foresight? Of course, it is. Well, that's honest graft.
Derek Thompson is at it again. I especially like this mistake where he writes "Ryan proposes to cure health care inflation by capping Medicare payments to beneficiaries at $15,000. How will that help a senior pay for medical expenses that exceed $15,000? It won't." This is stupid beyond words. The Ryan plan does not give seniors 15,000 dollars to buy health care and if they incur greater than 15,000 worth of expenses they have nothing. In fact, the Ryan plan will give different groups of seniors varying amounts of money (lower-income and sicker seniors will get larger subsidies) in order to buy health insurance that offers a package of benefits (hospitalization etc.) This way, insurers that can offer the widest array of services at a lower price would get more customers (this approach makes even more sense in a more broadly liberalized health care market.) This can't be repeated enough: Either the Derek Thompsons of the world are in favor of ruinous tax increases to pay for an unsustainable long-term projected rate of increase in Medicare spending or we are arguing about how to bring costs down to a sustainable level.
The choice here is pretty simple. Let companies compete to offer seniors a set of benefits based on price, or have the government ration care based on what a bureaucrat thinks a particular senior should have. We can have patient-centered care or bureaucrat-centered care. These are our choices.
This Sphinx of Pennsylvania Avenue routine, from a politician hailed just three years ago as an orator so compelling he would have driven Pericles into the tunic-wholesaling business, is the result of a political dilemma: Liberalism is much more forthcoming on the question of what the government ought to do than it is about how the government should pay for all its programs.Bingo! Yahtzee! Survey says: Ding, ding, ding! So of course there is a natural reason to explain this Liberal reticence: there are more people who want good things than there are people willing to foot the bill for them. In other words: generating enthusiasm for higher taxes is a tough sell. Just ask Walter Mondale.
In his address Saturday to the Republican Jewish Coalition gathered here, he lambasted President Obama for what he characterized as a weak approach to international forces based on a lack of negotiating skills. But Romney never directly discussed U.S. involvement in Libya, leaving a group of reporters chasing him down a hall to ask him about this puzzling omission and whether he had a position on the United States launching a military offensive in a third Islamic country.
"I've got a lot of positions on a lot of topics," Romney said over his shoulder, "but walking down the hall probably isn't the best place to describe all those."
The day before, Romney had sidestepped a question about his recent trip to Afghanistan, saying he would discuss foreign policy in his speech on Saturday. But he neglected to talk about his trip or about continued U.S. involvement in Afghanistan in those remarks.
"I've got a lot of positions on a lot of topics." That's precisely Romney's problem. And does he really think Obama's foreign policy problems are because Obama lacks good "negotiating skills"? Mitt, please go back to work for Bain Capital.
Henry Olsen points out Paul Ryan's stealing of the Democratic Party issue of security (see, among other sources, FDR's 1944 SOTU). In fighting Progressivism, we often need to turn Progressive guns against Progressivism: capture their commanding heights and use their own weapons against them. Leftist policies destroy Social Security, Medicare, etc. This does not show bad faith in compromising with these New Deal policies--quite the contrary; it's part of a much larger strategy.
As bad as California is, it would be far worse without the consensus that supported the initiative and referendum measures against racial preferences, property tax hikes, and so on. See Edward Erler's argument for using the Progressive means to conservative ends: Keep your eye on the ball and the real enemy--the administrative state.
Refine & Enlarge
America, on the president's orders, has intervened militarily in Libya; the president has given a speech explaining the intervention and the manner of it; the country and the world debate the matter as events unfold; the outcome remains uncertain. In his speech, the president insisted that, because the Libyan people faced "the prospect of violence on a horrific scale," America had a responsibility to act. "To brush aside...our responsibilities to our fellow human beings under such circumstances would have been a betrayal of who we are."
These letters are particularly concerned with "who we are" as a people and what this requires of our politics, domestic and foreign. So I leave aside for now the many other interesting and important questions swirling around the president's words and deeds, including his deference to the United Nations and his neglect of the United States Congress.What does "who we are" tell us about how we should act toward the rest of the world?
Megan McArdle gives a fair summary of the practical choices that the two parties offer voters when it comes to Medicare and Medicaid reform.
Derek Thompson is just obtuse. I especially like where he writes:
This picture is a partisan Rorschach test. Washington promised to pay for every senior's health care. We can't. Paul Ryan's sees the graph and says, "Let's change our promise." The White House's sees the graph and says, "Let's change health care."
Obamacare started to "change healthcare" by sharply cutting doctor reimbursements for current Medicare clients (which will make it harder for seniors to see providers) and using the savings to fund a new middle-class entitlement. We can look forward to future attempts by the Obamas of the world (and their media enablers like Thompson) to try to "change health care" through waiting lists, denials of service and other, less transparent ways of cutting back services.
We have to get this straight and repeat it always. The Ryan patient-centered approach will let future retirees decide on the care they get and they will get better value for their money. The Obama bureaucrat-centered approach will get seniors ever fewer medical services even as they are told a thousand lies about a thousand waiting lists and service reductions. And then they will tell you about how great they are for changing health care. The Ryan method is both more honest and will get seniors better care and more choices at a lower price.
A compelling argument on the Post's part. The administration should make the right decision here and let these low-income students escape the failing system that they would otherwise be trapped in.We understand the argument against using public funds for private, and especially parochial, schools. But it is parents, not government, choosing where to spend the vouchers. Given that this program takes no money away from public or public charter schools; that the administration does not object to parents directing Pell grants to Notre Dame or Georgetown; and that members of the administration would never accept having to send their own children to failing schools, we don't think the argument is very persuasive. Maybe that's why an administration that promised never to let ideology trump evidence is making an exception in this case.
Machiavelli is not a prophet of nihilism. His Prince (unlike Nietzsche's) isn't fighting simply for power. He is fighting to for the right and the ability to build a state and to become a lawgiver.
By the way, Thatcher's breaking of union power in Britain had the ironic benefit of breaking the total union stranglehold over the Labour Party, making possible the emergence of the more moderate "New Labour" under Tony Blair. This suggests the possibility that if Republicans succeed in breaking the power of public employee unions, the ultimate beneficiary might be the Democratic Party; it would free them at last to support genuine public education reform, for example. Mickey Kaus, call your office.