A Critical Look at the Ryan Plan

This article was originally published in National Review Online

The overwhelming response coming out of the free-market movement is that the proposed Ryan plan is great. And parts of that plan are good. But I thought the only way I can add something productive to this conversation is by pointing out how this plan isn’t doing nearly enough to reduce the size of government and make our lives and the lives of our children and grandchildren better.

I apologize in advance to all of you who think that we should only be encouraging Chairman Ryan who, after all, is one of the very few members of Congress who has had the courage to talk about reforming Medicare. But I think this is not the time to compromise. Considering the situation we are in today, the size of government, the level of our debt, the continuous violations of our economic and personal freedoms, free-market advocates should be breathing fire everyday and fight for truly smaller government. This plan isn’t enough.

• It doesn’t balance the budget in the next ten years. In fact, if everything goes according to plan, we won’t have a balanced budget for decades. There areseveral plans out there showing that it can be done within the next 10 years or less. (Senator Mike Lee (R., Utah), for instance, has a plan that would balance the budget fairly quickly and create a far more stable framework.)
• It will spend $4.9 trillion in 2022. That’s $1.2 trillion more than we spend today under the plan ($3.6 trillion). That’s before the explosion of Social Security, Medicare and Medicaid. That’s only 13 percent less than the president’s plan.
• It focuses on a few villains like high-speed rail and the president’s healthcare law but it fails to propose the elimination of programs, agencies, or departments that should be terminated either because they are the responsibility of the state and local governments or the private sector.
• It once again fails to reform Social Security. This comes at a time when Republicans continue to support cuts to the payroll tax without reductions in benefits. Maybe more importantly, if you want to preserve Social Security, without reform the program will grow itself into insolvency hurting the poorest in our society.
• It reneges on sequestration-induced reductions in military spending (it finds the “savings” elsewhere). I think a serious plan would put everything on the table. More importantly, this will guaranty that no one in their right mind will ever agree to make a deal with Republicans since they will turn around and try to change the terms of the contract they don’t like. If they didn’t want defense cuts, they shouldn’t have made them part of the debt ceiling deal. (The Obama budget too reneges on sequestration cuts but doesn’t even try to find the savings if I remember correctly.)
• This plan doesn’t close the emergency loopholes. This means that spending cuts brought about by the BCA caps or the Ryan budget can be easily restored by claiming that the spending is an emergency.
• On Medicare reform: Why push off urgent reforms for a decade? According to the Trustees’ Report, Medicare will become insolvent by 2024. If you read the letter at the back of the Trustees’ report, however, it is obvious that these are extremely rosy estimates and Medicare will be insolvent way sooner than that.
• This is a good example of dessert-now-spinach-later policy. In this case, however, older people are the only ones eating desert and younger people are left with the spinach and little prospect of any dessert at all.
• The proposal includes no credible plan to force future Congresses to implement its reforms.

Please, understand that I am not ignoring the good things in this plan. But many people have already uncritically written about them. And let’s be honest, considering the circumstances, I was hoping for more, much more. Considering the level of compromises and the amount of watering down that Congress will do once they put their hands on this or any budget, the original document should have been much stronger.

For a good piece on the Medicare-reform part of the plan you can read Reason’s Peter Suderman here. For positive feedback you can read Keith Hennessey here.