Krugman: What’s In The Ryan Plan?

[ProSense]

What’s In The Ryan Plan?

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The first decade

In the first decade, the big things are (i) conversion of Medicaid into a block grant program, with much lower funding than projected under current law and (ii) sharp cuts in top tax rates and corporate taxes.

Is this a deficit-reduction program? Not on the face of it: it’s basically a tradeoff of reduced aid to the poor for reduced taxes on the rich, with the net effect of the specific proposals being to increase, not reduce, the deficit. Yet Ryan claims a big deficit reduction, via two big “magic asterisks”. First, he insists that the tax cuts won’t reduce revenue, because they’ll be offset with unspecified “base-broadening”. Here’s the CBO explanation:

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After the first decade

After the first decade, Medicare is gradually transformed into a voucher scheme, with the value of the vouchers lagging well behind projected health care costs. Even so, however, much of the supposed deficit reduction comes not from Medicare but from further cuts in discretionary spending relative to GDP, with the number eventually falling to 3.5 percent of GDP (see Table 2 in the CBO report). There is, once again, no specification of how this is to be accomplished; bear in mind that this number includes defense, which is currently around 4 percent of GDP.

Is this a plan?

Ryan basically proposes three big things: slashing Medicaid, cutting taxes on corporations and high-income people, and replacing Medicare with a drastically less well funded voucher system. These concrete proposals would, taken together, actually increase the deficit for the first decade and beyond.

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http://krugman.blogs.nytimes.com/2012/08/16/whats-in-the-ryan-plan/

[cthulu2016]

1. Thank you for your work in posting this

I was going to post this, but found finding the best four paragraphs too daunting a task.

You did a good job with it.

[ProSense]

2. Thanks.

Ryan's deficit-reduction lie is a big one.

[Jim__]

3. So there is no actual deficit reduction in the Ryan plan.

Gee, you'd think the corporate media might have noticed.

[Martin Eden]

4. The voters need to understand this in November

2 simple facts need to be stressed over and over again:

1) The Romney/Ryan plan would increase the deficit, not reduce it.
2) Medicare for seniors would be cut to fund tax cuts for the rich.

How many people who understand and accept those facts will vote for such a plan?

[Doctor_J]

9. None of the Fox viewers or Hate Radio addicts will learn any of this

[HopeHoops]

5. Well, to be fair, they DO offer free cyanide pills to the poor and the elderly.

[DallasNE]

6. Durning Nixon's Days Block Grants Were Called Revenue Sharing

And that was discontinued because the money given to the States went into their general fund and helped Governors take credit for lowering taxes rather than being used for the intended purpose. This, in other words, is an attempt to kill Medicaid as we know it. More race to the bottom crap. The Republican trifecta would be to kill Medicare, kill Medicaid and kill Social Security and the Romney/Ryan proposal is a giant step in that direction on all three fronts.

[Electric Monk]

7. k&r

&u&g&m&a&n

[DCKit]

8. Why does everyone forget that those vouchers are to be used to purchase health insurance?

Medicare is single payer. Ryan wants to bring the health insurers into the equation.

It's a win only for the health insurance companies, a huge loss for seniors and the budget.