The following Op-Ed appears in the Wall Street Journal:
Did someone move the 2012 election to June 1? We ask because President Obama’s extraordinary response to Paul Ryan’s budget yesterday-with its blistering partisanship and multiple distortions-was the kind Presidents usually outsource to some junior lieutenant. Mr. Obama’s fundamentally political document would have been unusual even for a Vice President in the fervor of a campaign.The immediate political goal was to inoculate the White House from criticism that it is not serious about the fiscal crisis, after ignoring its own deficit commission last year and tossing off a $3.73 trillion budget in February that increased spending amid a record deficit of $1.65 trillion. Mr. Obama was chased to George Washington University yesterday because Mr. Ryan and the Republicans outflanked him on fiscal discipline and are now setting the national political agenda.
Mr. Obama did not deign to propose an alternative to rival Mr. Ryan’s plan, even as he categorically rejected all its reform ideas, repeatedly vilifying them as essentially un-American. “Their vision is less about reducing the deficit than it is about changing the basic social compact in America,” he said, supposedly pitting “children with autism or Down’s syndrome” against “every millionaire and billionaire in our society.” The President was not attempting to join the debate Mr. Ryan has started, but to close it off just as it begins and banish House GOP ideas to political Siberia.
Mr. Obama then packaged his poison in the rhetoric of bipartisanship-which “starts,” he said, “by being honest about what’s causing our deficit.” The speech he chose to deliver was dishonest even by modern political standards.
The great political challenge of the moment is how to update the 20th-century entitlement state so that it is affordable. With incremental change, Mr. Ryan is trying maintain a social safety net and the economic growth necessary to finance it. Mr. Obama presented what some might call the false choice of merely preserving the government we have with no realistic plan for doing so, aside from proposing $4 trillion in phantom deficit reduction over a gimmicky 12-year budget window that makes that reduction seem larger than it would be over the normal 10-year window.
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.Mr. Obama said that the typical political proposal to rationalize Medicare’s gargantuan liabilities is that it is “just a matter of eliminating waste and abuse.” His own plan is to double down on the program’s price controls and central planning. All Medicare decisions will be turned over to and routed through an unelected commission created by ObamaCare-which will supposedly ferret out “unnecessary spending.” Is that the same as “waste and abuse”?
Fifteen members will serve on the Independent Payment Advisory Board, all appointed by the President and confirmed by the Senate. If per capita costs grow by more than GDP plus 0.5%, this board would get more power, including an automatic budget sequester to enforce its rulings. So 15 sages sitting in a room with the power of the purse will evidently find ways to control Medicare spending that no one has ever thought of before and that supposedly won’t harm seniors’ care, even as the largest cohort of the baby boom generation retires and starts to collect benefits.
Mr. Obama really went off on Mr. Ryan’s plan to increase health-care competition and give consumers more control, barely stopping short of calling it murderous. It’s hardly beyond criticism or debate, but the Ryan plan is neither Big Rock Candy Mountain nor some radical departure from American norms.
Mr. Obama came out for further cuts in the defense budget, but where? His plan is to ask Defense Secretary Bob Gates and Joint Chiefs Chairman Mike Mullen “to find additional savings,” whatever those might be, after a “fundamental review.” These mystery cuts would follow two separate, recent rounds of deep cuts that were supposed to stave off further Pentagon triage amid several wars and escalating national security threats.
Mr. Obama rallied the left with a summons for major tax increases on “the rich.” Every U.S. fiscal trouble, he claimed, flows from the Bush tax cuts “for the wealthiest 2%,” conveniently passing over what he euphemistically called his own “series of emergency steps that saved millions of jobs.” Apparently he means the $814 billion stimulus that failed and a new multitrillion-dollar entitlement in ObamaCare that harmed job creation.
Under the Obama tax plan, the Bush rates would be repealed for the top brackets. Yet the “cost” of extending all the Bush rates in 2011 over 10 years was about $3.7 trillion. Some $3 trillion of that was for everything but the top brackets-and Mr. Obama says he wants to extend those rates forever. According to Internal Revenue Service data, the entire taxable income of everyone earning over $100,000 in 2008 was about $1.582 trillion. Even if all these Americans-most of whom are far from wealthy-were taxed at 100%, it wouldn’t cover Mr. Obama’s deficit for this year.
Mr. Obama sought more tax-hike cover under his deficit commission, seeming to embrace its proposal to limit tax deductions and other loopholes. But the commission wanted to do so in order to lower rates for a more efficient and competitive code with a broader base. Mr. Obama wants to pocket the tax increase and devote the revenues to deficit reduction and therefore more spending. So that’s three significant tax increases-via higher top brackets, the tax hikes in ObamaCare and fewer tax deductions.
Lastly, Mr. Obama came out for a debt “failsafe,” which will require the White House and Congress to hash out a deal if by 2014 projected debt is not declining as a share of the economy. But under his plan any deal must exclude Social Security, Medicare or low-income programs. So that means more tax increases or else “making government smarter, leaner and more effective.” Which, now that he mentioned it, sounds a lot like cutting “waste and abuse.”
Mr. Obama ludicrously claimed that Mr. Ryan favors “a fundamentally different America than the one we’ve known throughout most of our history.” Nothing is likelier to bring that future about than the President’s political indifference in the midst of a fiscal crisis.
Ryan’s plan does NOT maintain the social safety net; it destroys it for everyone currently under 55. His attempt to replace Medicare with a voucher system is a total fail on two accounts:
(1) The best private insurance companies spend five times as much on administrative overhead as a fraction of expenses as does Medicare. If you are looking to save money, you don’t go to a less efficient system.
(2) The amount of the vouchers proposed by Ryan is grossly inadequate to cover current Medicare benefits.
The Ryan plan is basically a corporate welfare plan for insurance companies. While it seems pretty much impossible to stop the growth of corporate welfare today, there is no way that the Congress will be able to allow the vouchers to be as low as Ryan has proposed.
In addition, Ryan’s budget makes overly optimistic assumptions regarding economic growth that are not taken seriously by economists outside of the Tea Party.
The WSJ, now a Murdoch propaganda outfit, selectively points out difficulties with Obama’s proposal but ignores the Ryan proposal’s even greater use of smoke and mirrors.
Why didnt they first print the obama plan itself?
below is the outline of the plan from the Washington Post
I knew when i started reading this editorial from a pundit writer on the WSJ editorial staff that I would be reading an article written by someone stuck in 1928 with the belief that markets regulate themselves and that capitalism exists today ( as it did sort of in 1928) that capitalism works without regulated markets and without the federal government working for big business to open markets abroad and keep them open while subsidizing the guts of what has become many main industries that wouldnt exist without it. (hi-tech and farming for example.) So i imagined what this editorial pundit would say and i was generally correct.
I knew he would not discuss the merits of the plan ( i will submit to this site the outline of his plan from the WASH POST after this post)
The editors of the WSJ don’t let us down. The article includes no critique of Obamas plan as to whether it would lower the deficit and/or if it would preserve the programs designed by democrats throughout the 20th century to keep people from dying in the streets, to keep people from living on the street with chronic untreated illnesses, to keep people from having to maintain themselves on non nutritious or unsafe food ( Ryan the republican wants to gut the FDA)
The WSJ pundit continued to not talk about the merits of the obama plan.
Instead the pundit writer of the WSJ critiqued the lack of nobility in Obama’s presumed psychological state regarding the bugdet, he critiqued obama’s mental motivations, he listed fraudulent remarks about the timing of Obamas plan which he critiqued, and other marginal critiques about how good obama is as a politician ( i.e. like the fact that Obama didnt accept his commission’s findings ( the one commission set up in 2010 to propose solutions to debt)) How is this relevant to critiquing the plan that the article calls ” dishonest”” Answer: it doesnt- it is the WSJ pundit who is being dishonest.
*The 4th to last paragraph in the article is incoherent.
*the 3rd to last paragraph contains a lie
*the last paragraph criticizes obama for criticizing Ryan.
So the WSJ pundit continues that Obama is somehow a dirty politician by Obama’s criticizing Ryans plan which crushes the majority of citizens in the country, who are also the neediest.
The next tot he last paragraph suggests that obama wanting to let the bush tax cut extension expire on the wealthiest 2% of the country in order to reduce the deficit is a scheme to spend the money other than on the deficit. That isnt worth commenting on, it’s actually embarrassing to the journal that they printed this monstrosity of an irrelevant and deceitful article which ignores a critique of the plan in exchange for a critique on everything but the plan along with a tirade laced with false innuendo and misleading paragraphs.
Then in the last sentence he tells the reader that “Mr. Obama ludicrously claimed that Mr. Ryan favors “a fundamentally different America than the one we’ve known throughout most of our history.” Nothing is likelier to bring that future about than the President’s political indifference in the midst of a fiscal crisis.
So again, it is obamas choosing the timing to do this, which is somehow in the wacky world of this pundiut supposed to crippal the country
The next posting of mine will be the outline of Obama’s proposal from the Washington Post
Here’s the basic outline of the White House Obama Long-Term Budget Proposal from the Washington Post ( Ezra Klein author):
* Top line: $4 trillion in deficit reduction over 12 years, backed by a “trigger” that begins making across-the-board cuts in discretionary spending and tax expenditures if debt if we’re not on track by 2014. That’s achieved through:
+Discretionary spending cuts: Increases the non-security spending freeze to the freeze-plus-cuts proposal favored by the deficit commission. That nets roughly $800 billion. Lops a further $400 billion off of the security-related discretionary spending.
Health care: Directs the Independent Payment Advisory Board to hold cost growth in Medicare to GDP plus 0.5 percent rather than GDP plus 1 percent. To make that achievable, IPAB gets new powers, including the ability to restructure Medicare’s insurance so it pays differently for treatments of different value. Also shortens the patent on biologic drugs from 12 years to seven years, implements the recommendations from the National Governors Association working group on Medicaid, and does a few more things. Total savings: $480 billion.
+ Non-Medicare, Medicaid or Social Security mandatory spending: Makes $360 billion in cuts.
Tax reform: Raises $1 trillion by clearing certain expenditures from the tax code. Also assumes the expiration of the Bush tax cuts for income over $250,000. The breakdown of spending cuts to tax increases in the proposal is 3:1.
+ Social Security: Supports negotiations to close the Social Security shortfall consistent with the principles laid out in the budget.
Initial impression is that this looks a lot like the Simpson-Bowles report, but in a good way. It doesn’t go quite as far on defense cuts, but it also doesn’t implement a cap on tax or spending. It goes a lot further than Ryan’s budget does in terms of actually figuring out ways to save money rather than just using caps to shift costs onto states/beneficiaries. More as I’ve had more time with it.
+ For some time now, Democrats and Republicans alike have been yearning for a great philosophical clash between the two parties. No more of this five percent of 12 percent of the federal budget stuff. We wanted entitlements, the role of government, the obligations that the old have to the young, that the rich have to the poor, that the powerful have to the powerless.
Paul Ryan’s budget offer exactly that sort of reconstruction of the social compact. America is a very different place before his budget than it would be after his budget. But though Obama’s speech was closer to that sort of clash of visions than anything he’s offered before — he used the word “vision” 15 times, for instance — what he offered was not philosophy. It was policy. But you have to read it closely — and know where it came from — to see that.
The assumptions and models included in the Ryan budget are this: “I can save an almost unlimited amount of money. My number can be anything I want it to be. The problem is I actually can’t save that much money because my math is based on fantasy. So my number is meaningless.”
+ President Obama says his plan cuts $4 trillion over 12 years. Rep. Paul Ryan says his plan cuts $4 trillion over 10 years. If you look at the numbers, the two plans appear quite similar. But if you look at how they’d get to the number, they couldn’t be more different. And it’s how you get to the number that matters, because that’s what decides whether you’ll get to the number. It’s also, incidentally, what decides the shape of our government going forward.
Ryan’s number is the product of holding the growth of Medicare and Medicaid to the rate of inflation, which is far lower than has ever been shown to be possible. How he gets there is, on Medicaid, he tells the states to figure it out, and on Medicare, he tells seniors to figure it out. Both strategies have been tried: Various states have gotten waivers to radically remake their Medicaid program, and the consumer-driven model that Ryan is proposing for Medicare has been attempted in the Federal Employee Health Benefits Program and Medicare Advantage. None of these programs have worked, which is why we’re in our current predicament. Which is why Ryan’s plan is fantasy
+ Obama’s number is the product of holding Medicare growth to GDP+0.5 percent — which is, in practice, a few percentage points beyond inflation, and a few percentage points behind the health-care system’s normal rate of growth. He mostly gets there through the cost controls passed as part of the Affordable Care Act, which hope to hold Medicare to GDP+1 percent. He then proposes to shave a further half-percentage point off the growth rate by introducing value-based insurance — where we pay more for treatments that are proven to work than for treatments that are not proven to work — into Medicare and giving generic drugs quicker entry into the marketplace. These programs have worked at smaller scales and in more limited pilots. We don’t know if they’ll work across the entire Medicare system, but we have reason to think they will.
+Then there are taxes. Ryan’s plan pledges to make the Bush tax cuts permanent, at a cost of at least $4 trillion over 10 years, and more after that. He’d then clean out the tax code, but he’d pump the money he made from closing expenditures back into tax cuts. Obama proposes to return to the Clinton-era tax rates on income over $250,000 and then raise a further trillion through closing tax expenditures. Altogether, that’s about $2 trillion less than letting all the Bush tax cuts expire, but at least $2 trillion more than Ryan’s plan. Notably, Obama hasn’t said which expenditures he’d close to get to $1 trillion. The difference between the two tax plans — particularly when added to Obama’s decision to cut $400 billion from security-related spending, while Ryan largely exempts that category — explains why Obama doesn’t have to make such deep cuts in programs for seniors and low-income Americans.
Obama’s budget is not philosophy. It is very similar to the Simpson-Bowles report, which attracted the votes of Republicans as far to the right as Tom Coburn. Few Democrats would say their vision of balancing the budget is one in which there was only one dollar of new taxes for every three dollars of spending cuts, but that’s what Obama’s proposal envisions. Obama’s budget, somewhat curiously, is what you’d expect at the end of a negotiation process, not the beginning. In fact, as it’s modeled off of Simpson-Bowles, it is the product of a negotiation process, as opposed to an opening bid. It is, in other words, policy.
+ Ryan’s budget is purer, but it is also more fantastical. It posits the government it wishes were possible, and the policies it wishes would work. It is an opening bid so ideological that it leaves little room for a process of negotiation. Every dollar it purports to raise comes from cutting spending. Not one comes from taxes. It privatizes Medicare and unwinds the federal government’s role in Medicaid. For all the philosophy in his budget — and his budget does have a very different philosophy about the proper role of government than we see in federal pllicy today — there’s neither policy that could pass nor policy that could work. And, curiously for a conservative who distrusts both government and congress, it has no answer to the question of “what if this fails?”
The policy that clarifies this difference is the “trigger.” Obama’s budget, aware that it might not pass and, if it does pass, it might not work, proposes to make automatic cuts to discretionary spending and tax expenditures if the promised savings don’t materialize. If Ryan’s budget falls shorts, there’s no comparable failsafe. That is to say, Obama’s budget has two plausible ways to get to its number, while Ryan’s budget has NONE. You don’t need a PhD in philosophy to understand why that’s a problem.
To be honest, I have not read the above article in full. I’ve read little more than the headline.
But when an affiliate of Fox News calls anyone a liar, one should sit down and not take notice.
not interested in whole speech how great obama plan is. all we need to know, is that obama plans on cutting deficit by raising taxes to enormous rates and ryan proposes to cut the deficit by cutting out of control spending. this is something the dems refuse to do. they refuse to cut out of control spending while most of their pet programs are useless and we cant afford them. a few examples;
1.planned parenthood, why should my tax dollars go to some abortion something which i dont agree with?
2.global warming etc and hundreds of other programs that peole like me and you dont even know about.
i refuse to pay taxes for 20% of society that doesnt work at all and gets benefits.
when you fix a problem, you need to get to the root of it.
the problem is out of control spending, not low taxes.
Did not get into this mess in 1 year and will not get out in 1 year but must make a SERIOUS start. Going more in deficit
is not going to do it. Taxes the rich will not do it. Cutting all and I mean all spending; no pork barrels, cut in discretionary spending and non discretionary spending. Raising retire age which i am pass and am working. Make sure
people also have in place 401’s and long term medical insurance sort of a life insurance for medicial insurance
This whole article is probably a copyright violation from WSJ/News Corp.
charliehall is right that the Ruan plan reduces the Medicare safety net. It has to, that’s the point, we can no longer afford what we are providing. We’ve promised it to our seniors so we will give it to them, but for those of us under 55 we have to realize that the government can no longer support us medically as long we live.
The private insurance industry is not less efficient than the public one. It only appears that way becuase we don’t factor the true costs of running a federal agency. Medicare and Medicaid have thousands of employees and they will all get pension and medical benefits for the rest of their lives costing tax payers billions of dollars in the long term. Private companies don’t have long term obligations like those and are therefore more efficient. Another reason that priavte companies seem less effeicient now is that they have to spend a lot of money complying with state regulations. Presumably the new insurance plans under the Ryan system would be regulated exclusively by the federal government further reducing costs.
If the Ryan system were to be enacted I’m sure that private companies would compete and create very basic plans that use only the stipend provided by the government as the premium.
But, yes entitlements as we know them today have to end. The government is not responsible for our long term health. We are. We are responsible to save for our own long-term insurance needs. The government will give us only enough to maybe keep us from dieing, but that’s it. With individual liberty comes individual responsibility. It is the cost of our freedom.
The main problem with Ryan’s budget is that it fails to enact measures to help stem the rise in costs of healthcare. We need to pass comprehensive medical tort reform. We have to allow tax free importation of drugs from developed coutries like Canada. We have to eliminate local and state regulation of medical providers and insurance companies. We have to provide long-term low interest loans to medical students to cheapen what it costs to become a doctor. We have to allow unlimited immigration of qualified medical professionals.
Obama’s plan just raises taxes on the people most likely to create new jobs. It claims to cut “waste” but doesn’t say how. It has no hope for success. New taxes will never pass the House.
You liberals like charlie hall and runwithharetz you’re so pathetic still supporting obama and his gangster liberal party. Get over it your socialist utopia is crumbling in front of your eyes. Liberalism is all sheker.
Charlie I agree with you especially about #2, however, it is nice to see both sides at least proposing issues to address our problems even if it is only for political posture. I think we will need tax increases and spending cuts. However, since our unfunded liabilites (and the states’ which will be forced to bail out) are so large the majority will have to come from spending cuts.
That being said I do not think you can eliminate Medicare, I read Ryan’s plan. You need to reform Medicare two simple ways (and this is a complex issue) would be to raise the age, and to not give Medicare to people with a very high net worth i.e $15m.
I think the bi-partisan Federal deduction committee had some good proposals, I do not agree with all of them, but I think that should be a starting point for negotiations.
Heaven help us if Obamas plan happen!
in response to the above: the adminstrative costs of Medicare is 1% of it’s entire expense. plus they pay less per procedure than PRIVATE INSURANCE
the adminstrative costs of PRIVATE INSURANCE ARE 15- 20 %
THE PAYMENT PER PROCEDURE IS higher than medicare.
the pool is greater in medicare which is why every doctor wants to take medicare patients
the private insurance companies cant compete with medicare in that respect.
this is why we should have a public option – so we are free to choose a private insurance or a public insurance and just like choosing tween fed ex and USPS we decide what we want and which works better for us