Paul Nitze: Paul Ryan’s year of magical thinking | AspenTimes.com
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Paul Nitze: Paul Ryan’s year of magical thinking

Paul Nitze
The Aspen Times
Aspen, CO Colorado

“Will the federal government close its doors?” is not the question making the rounds in Washington this week. Instead, it’s “What will happen with next year’s budget?”

It’s odd that with a quarter of the city’s workers facing a furlough and millions of other Americans facing disruptions in service, the capitol’s mood isn’t gloomy. Families that had thought they’d be hiking through Rocky Mountain National Park on spring break may be playing rounds at Tiny Town Miniature Golf instead. Soldiers may not get paid. But the president is out of town and congressional leaders seem checked-out.

Chalk it up, in part, to a widespread belief that a shutdown will be averted. And that’s not a crazy thought. This is high-stakes poker, and any decent player will tell you that big bets are made only when the odds are close or someone overplays his hand.

As to the former, once the president moved to $33 billion in cuts – a number that the House leadership previously hinted they’d accept – he made it harder for the GOP to “win” the shutdown. As to the latter, John Boehner is not Newt Gingrich. You may not like the tears or the tan, but the speaker is a practical guy who wants to live another day. He does not think he occupies the last spot on the Bell Curve.

Even if the collective hunch is wrong, “What comes next?” is the right question to ask. A lot of the oxygen that the punditry would have spent hashing out the stakes in the shutdown has instead been used up on “The Path to Prosperity,” Rep. Paul Ryan’s 2012 budget proposal. Consider the fight over this year’s budget a minor battle over a slim slice of discretionary spending, but consider the fight over the Ryan plan to be a war for the country’s future.

Some of Washington’s most intelligent pundits think the Ryan budget is just the thing to kick start a long overdue conversation about how we get out of debt. David Brooks calls it a “courageous” proposal and lauds Ryan for “grasp[ing] reality with both hands.” Jacob Weisberg calls it “brave, radical, and smart.”

I call those characterizations complete and utter nonsense. It’s not so much that the Ryan plan is unworkable – rather, it’s that the plan is shallow and unserious. It’s unworkable because Ryan’s budget refuses to raise taxes, which is a necessary condition to bringing our budget into the black. But at least that aspect of “The Path to Prosperity” is sincere.

No, the problem with the Ryan budget is that the Republican chair of the House Budget Committee “solves” our Medicare and Medicaid problems by turning Medicare into a personal voucher, and turning Medicaid into a block grant to the states. With one wave of his policy wand, Ryan would halt the growth in medical costs by simply capping federal outlays for both programs.

That is where Ryan finds nearly all of his cost savings, and that is what allegedly will make us healthy and wealthy in the decades to come. The only problem is the utter lack of evidence that this will work.

Instead, back in the real world, the evidence suggests that for all their faults, government-run health-care systems are the best means to address the cost conundrum. That’s one reason why we spend more per capita on health care than Britain or Germany. Private insurers here in the U.S. have never been able to control costs.

Ryan’s plan doesn’t just roll back the Affordable Care Act. It wishfully presumes that giving vouchers to seniors will somehow transform the way we deliver medical services. It’s too bad that fixing our health-care system is so complicated, but them’s the facts.

Rather than starting the conversation, Ryan’s plan is likely to kill it. It’s so far out there that the White House’s best strategy is to delay offering an alternative plan for as long as possible, and to stick to the timid steps outlined in the White House’s 2012 budget proposal. Ryan has handed the White House a massive gift, and you can be sure the president and his advisors will use it to their advantage through the 2012 cycle.

Instead of using one of the existing deficit reduction plans, like Simpson/Bowles, as a foundation for a thoughtful alternative, the temptation will be to take the much easier route of attacking the GOP for eliminating Medicare as we know it. As far as political tactics go, I can’t disagree.

But no matter who’s in power in 2013, when we’ll desperately need to pass a comprehensive deficit reduction plan, we’ll be worse off for these short-term tactics. As with the recent compromise on the Bush tax cuts, it’s clear that any far-reaching budget bill will require a sustained public information campaign. Just as Paul Ryan can’t waive a wand and make health-care cost inflation go away, the president won’t be able to magically conjure support for his brand of reform.


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