In 2010, Republicans won control of the House by offering to resist the Obama agenda. But their victory left open the question of whether they would also confront the grave fiscal challenges facing the country, and move beyond mere opposition to present an alternative governing vision to that of the Obama Democrats.
It was by no means obvious that they would do so. The key component of any effort to avert fiscal catastrophe in the coming decades, and to create the kind of stability in the American economy required for serious growth in the near term, would have to be entitlement reform—especially Medicare reform. And proposing such reform carried political risk. In the early months of the 112th Congress, Republicans held an intense debate, in public and in private, about whether to take the lead in proposing bold fiscal measures, or whether being an effective opposition to an increasingly unpopular president would be enough to lay the groundwork for an eventual presidential nominee who could offer such reforms himself.
In the end, House Republicans decided that the substantively responsible course was also politically prudent. They passed a budget that illustrated what a recovery of sound fiscal policy would look like in both the short and long term. Crafted by Budget Committee chairman Paul Ryan, the “Path to Prosperity” set out to cut discretionary spending while sustaining a commitment to national defense; reform key safety-net programs to make them more effective and efficient; broaden the tax base while lowering rates so the tax code enabled growth; and transform Medicare into a premium-support program that could unleash innovation in the health sector and reduce costs, while continuing to provide seniors with a guaranteed benefit.
The Medicare reform was the most risky. Although it would leave current seniors and those within a decade of retirement in the existing system, and although some reform along the lines of premium support is utterly necessary if we are to avoid a debt crisis in the coming decades, it was always clear that the Democrats would demagogue the issue and try to scare seniors away from Republicans. Indeed, for a time earlier this year, it seemed as though such a campaign of reckless fearmongering would be at the very core of the Democrats’ 2012 agenda.
Since Republicans controlled only the House, and could not hope actually to enact their budget, the main purpose of putting forward their ambitious proposals was to define the presidential race—to make it easier for a Republican candidate to champion serious entitlement reform, and to make it more difficult for that candidate to ignore the issue (as candidates have in the past). But would the Democrats’ attacks mean that the effort would have exactly the opposite effect, and scare presidential contenders from making a forthright case for essential changes? This crucial question lingered in the air through much of 2011.
The past month has settled that question, and in a way that should make Republicans proud. Until late October, most of the party’s presidential contenders had remained vague about Medicare reform, and were clearly trying to keep their options open. But, by late November, all the major candidates had lined up behind a serious premium-support overhaul of the program, and several of them presented their plans in some detail. Rick Perry proposed such a reform in an October 25 speech, Mitt Romney proposed his own version in a November 4 speech, and Newt Gingrich did so in a November 21 speech.
Meanwhile, congressional Republicans have reasserted their commitment, too. In the course of the ill-fated supercommittee negotiations, Republicans proposed the Ryan plan and, according to committee co-chair Jeb Hensarling, also said they would be willing to pursue the version of premium support proposed by the Bipartisan Policy Center’s debt-reduction task force, headed by former Republican senator Pete Domenici and Democratic budget guru Alice Rivlin. (The Domenici-Rivlin reform is much like Ryan’s, but with a higher rate of benefit growth and with a government fee-for-service option on the menu of Medicare plans available to seniors.)
Democrats on the committee reasserted their own party’s views, as well: They demanded a trillion-dollar tax increase and refused to consider any structural entitlement reforms, and thus any way of actually averting a long-term debt disaster.
All of this should help to clarify the choice before voters next year. If November 2010 showed that the American people had grown wise to the perilous excesses of the Obama Democrats, November 2011 showed that the Republican party is willing to step up to the challenges of our long-term budget problems. When the two forces join together in November 2012, America can begin in earnest to chart her course back to prosperity and strength.