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Paul Ryan Talks 2012, Town Hall Protesters, Medicare, Tax Reform, and More!

8:00 AM, Apr 28, 2011 • By JOHN MCCORMACK
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Milwaukee
During the town hall meetings of 2009 and other protests of the national health care bill, then-Speaker of the House Nancy Pelosi tried to marginalize the opposition as "astroturf" at best and "un-AmericanNeo-Nazis at worst.

Paul Ryan

For Paul Ryan, his detractors at the townhall meetings on his budget resolution are simply a normal and predictable part of American politics.

"Like the health care town hall crowds, there’s an effort from various groups to get their people into the town halls to [use] their talking points," Ryan told me Wednesday afternoon. But that doesn't make his opponents' criticism illegitimate.

“This is Wisconsin," Ryan says. "We have divergent political views. We have a lot of political diversity. Any town hall is going to represent that, some more than others.”

"I’ve come away from these town halls encouraged," says Ryan. "I’ve come away from these town halls impressed with how well people have versed themselves in budget problems and issues."

"The crowds have been overwhelmingly positive," he continues. (And you don't have to take his word for it: Just pick up the New York Times.)

Of course, the debate over Ryan's budget proposal has only just begun. In recent weeks, he's faced criticism not only from Democrats, but also from some potential 2012 Republican candidates.

Newt Gingrich suggested that future seniors (those now younger than 55 scheduled to get a Medicare subsidy when they turn 65 under Ryan's plan) should have the option to stay in the current Medicare system. What's wrong with that?  

"I don’t have a problem with that," Ryan replies. "I think it’s a fine idea worth considering. [Bill Clinton's budget director] Alice Rivlin and I have talked about that in the past."

But could his budget achieve the same amount of savings if future seniors had that choice?

Ryan says it's possible "because it wouldn’t be an open-ended fee for service system, like the current one for the under-55 plan. They would get a set amount of money to go toward the traditional fee for service and then, like current Medicare they’d probably buy coverage to supplement it. I would think a person would prefer a comprehensive plan like Medicare Advantage is today, but you can do this in a way that doesn’t have a budgetary effect, that it doesn’t bankrupt the program."

Ryan was dismissive, however, of likely presidential candidate and former Minnesota governor Tim Pawlenty's idea to reform Medicare through "payment reforms" that would incentivize health care providers to produce better health care outcomes.

"Medicare has yet to do this successfully," Ryan told me. "The president wants his IPAB [Independent Payment Advisory Board] to do essentially the same thing. It’s very difficult for a centralized bureaucracy to do that.... When they get these targets, like the president is giving them, you know a half a trillion dollars, they just sort of do indiscriminate cutting across the board, lowering reimbursement to providers, causing providers to drop out of the program altogether."

Indiana governor Mitch Daniels seems to be the potential GOP presidential candidate most supportive of Ryan's plan. "I think that’s accurate," Ryan says. He's talked to Daniels recently about the budget in general but says "your guess is as good as mine" when asked for the odds that Daniels actually runs. 

Ryan continues to have high praise for Daniels. "He understands the issues and the system pretty well," Ryan says. "He understands if we don’t fix this now, people are going to get hurt."

But if no viable candidate emerges to champion real Medicare reform, would Ryan consider making a run for president himself?

"I’m not even going there," Ryan replies. "I’m not even going there with my mind or my discussions. I’ve been pretty clear about this stuff with folks. I think the field’s going to keep emerging. I have no doubt somebody who’s running for president sees the true nature of our fiscal condition, they’ll come to the similar conclusions about how best to fix it, if they’re a conservative."

But at the very least, is Ryan willing to consider being the vice presidential nominee--for Donald Trump? "No comment," he says with a laugh. (He was similarly tight-lipped when asked when he'll release his long-form birth certificate: "I have no comment... You know, my mom has it, I think.")

Ryan also discussed some criticism his Medicare reform has faced from Democrats. For example, Alice Rivlin, Clinton's OMB director with whom Ryan has collaborated in the past, has said that the growth rate of the proposed Medicare subsidy is too low. 

"I think that’s a very debatable, reasonable and negotiable point," Ryan says. "She likes the structure of premium support. She still believes that premium support is the way to reform Medicare."

And what does Ryan make of the comparisons between his call for a subsidized Medicare health care exchange and Obamacare's exchanges? 

He offers a thorough response:

Medicare already has exchanges. Medicare prescription drug benefit is an exchange. Medicare supplemental is an exchange. Medicare Advantage is an exchange. So Medicare already operates like this. So we’re not talking radical change about how Medicare operates.

Doing that for the under-65 population—a federal government-run exchange—is radical and is dramatically different from where we are today for the under-65 population—point number one.

Point number two: Medicare is a much more unique population with high health care costs… health problems. The under-65 population is not. … What we want is to have a more vibrant, innovative market for health care for the under-65 population, and that will help produce a better system for the over-65 population.

If you turn the entire health care system into a government-run system, you won’t have the choice, you won’t have competition, you won’t have innovation, and productivity improvements. So the Medicare reforms are very similar to the way Medicare works in many aspects, but doing that to the rest of population would deeply damage the entire health care system and take a lot of freedom away from people who have it right now.

On tax reform, Ryan says he wants to lower all tax rates but keep revenues the same by eliminating or reducing deductions. While the Ways and Means Committee will hammer out the details this summer, I ask Ryan if he can say whether he can offer just a few examples of what's likely to happen. Will the mortgage interest deduction be reduced or eliminated?

"I’m not trying to beat around the bush," Ryan says. "I just don’t know. Yes, we go down the same path that the [Simpson-Bowles] fiscal commission does, broadening the base lowering the rate. But we’re targeting the historic revenue line of 18.3 percent. They’re targeting 21 percent, and then another trillion on top for deficit reduction. They had to target a far higher revenue line than we do, so there’s more room within the tax code along deductions for us to look at and achieve these rates. So we want to figure out through hearings and research what’s the best way to do that. We have more room to play with among the broader based deductions."

Simpson-Bowles also proposed taxing capital gains as ordinary income. Is that something Ryan would consider as part of a tax reform package?

"It depends on what the tax rate is," he says. "The key is that you don’t have a high tax on capital gains.... Raising capital gains rates to the income tax rates we have today would be a disaster."

Looking ahead to the next big congressional battle over raising the debt ceiling, Ryan says: "We want to use our leverage to get real spending controls to address the reason why the debt ceiling is being hit in the first place." 

Are Republicans raising expectations too high and setting up conservatives for disappointment on what may be achieved in terms of spending cuts or caps tied to the debt ceiling vote? "I don’t think most people believe that we’re going to get the Senate to address it, sign it into law, everything we’ve always wanted as part of the debt limit," Ryan says. "But I do think they expect us to get a good downpayment on fiscal controls and spending reforms. I think that’s reasonable."

One concession some Republicans would like in exchange for a debt ceiling vote is a balanced budget amendment, which has the support of all 47 Senate Republicans. That amendment requires the federal budget to be balanced 5 years after its ratified (about 10 to 12 years from today in the unlikely scenario that it actually won approval of three-fourths of the states).

Isn't that problematic for Ryan, since his budget gradually eliminates the deficit over two and a half decades? Not necessarily, he says.

"You'd have to have faster economic growth with low interest rates" to achieve balance in shorter time. "You'd have to run models [that predict greater growth than CBO does], and it'd take a while, to figure out whether you could get there or not" in the next 12 years.

Ryan faces more questions from constituents Thursday and Friday when he'll conclude his 19th town hall meeting of the last two weeks.

It's been a busy recess, but Ryan says he's "having fun" and enjoying time with his family. "We had Chinese food last night," he says. "We're halfway through a game of Monopoly that we're gonna go finish after dinner."

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