Presidential Race
6:07 am
Sat August 11, 2012

A Look At Paul Ryan's Budget

Originally published on Sat August 11, 2012 12:38 pm

Transcript

LINDA WERTHEIMER, HOST:

The selection of Paul Ryan as Mitt Romney's running mate will energize conservatives and liberals for the same reason. Ryan is the architect of the Republican House budget, which makes him a champion for conservatives, but a lightning rod, as well.

Joining us now to talk about that Ryan budget is NPR's Scott Horsley. Scott, this is a choice that activists in both parties will have something to say about it.

SCOTT HORSLEY, BYLINE: That's right, Linda. It is a bold choice, because Ryan's one of those Republicans who say you just can't beat the president with nothing. You need to put forward an alternative of your own. And with his budget, he's done so. But being bold has its risks, and Ryan will be a big target for Democrats. Just last Friday, in Colorado Springs, President Obama was critiquing the Republican economic agenda. And he said: If you want to know what they do, just look at what the House of Representatives voted on in their budget. Well, that's the Ryan budget. And you'll be hearing a lot more from the president and his team about that.

WERTHEIMER: Well, do we have a clip of President Obama? Could you tell me what you think - I mean, what is most controversial about that budget is clearly that he makes a big change in Medicare.

HORSLEY: That's right. It would eventually change Medicare from the open-ended government commitment to cover health care costs, to a fixed voucher payment for seniors, which they could then use to shop around for private insurance. Now, the conservative idea here is to inject more competition in the healthcare market, and thereby control costs.

Experts disagree about how well that would work. But it's an idea that some Democrats have embraced, notably Alice Rivlin, President Clinton's former budget chief. But the big question is: How big would that government subsidy for insurance be, and how fast would it grow? Under Representative Ryan's plan, the subsidy would grow more slowly than the rate of healthcare inflation that we've seen so far.

In other words, the subsidy would cover less and less of the true cost over time. And the Democrats will use that to say Ryan is shifting the cost of healthcare onto tomorrow's seniors.

WERTHEIMER: It's also true, isn't it, that the kinds of insurance plans that are contemplated by that budget don't actually exist at this moment.

HORSLEY: Well, that's right. Although, for example, we have and little model here in the plan that's available to federal employees. They get a subsidy to shop around for insurance. And what the experience has been that their costs of actually grown more rapidly than Medicare costs.

WERTHEIMER: So what would that mean for seniors, do you think? I would...

HORSLEY: Well, one thing for two days seniors - one thing we should emphasize is this is a plan that would be phased in over time. So today's seniors, those nearing retirement age, would not be affected. I suspect that's a nuance that may not be made clear and the Democratic attack ads.

There'll be a lot of attention paid to today's seniors who have been a strong constituency for Republicans. And this will be an opening for the Democrats there.

WERTHEIMER: What about tax policy? How does the Ryan budget matchup with what Mitt Romney wants to do?

HORSLEY: Well, it's similar. It's a little bit simpler. It would cut tax rates, which Republicans say would help to stimulate growth. It's all supposed to pay for those tax cuts by closing loopholes. Although, like Romney, Ryan hasn't said what loopholes would be eliminated. It's subject to the same critique as Mitt Romney's, that it gives very large tax breaks to the wealthiest Americans.

And the Tax Policy Center, an independent group, has found that the only way that you can make that revenue neutral is to cut breaks for the middle-class. So the critique will be that the tax plan would shift the tax burden from the very rich to the less well off. Also, cutting those taxes makes it tougher to balance the budget. Ryan's plan doesn't claim to do that for some time, though it does get to the sustainability faster than the president's spending plan.

WERTHEIMER: NPR's Scott Horsley, thank you very much.

HORSLEY: You're welcome, Linda. Transcript provided by NPR, Copyright National Public Radio.

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