As Republicans contemplate what sort of budget they should propose (real budget solutions, not continuing resolutions), it's important to realize that they are in a somewhat enviable position: What is clearly best for the country is also likely best for them politically.
Social Security’s looming deficit can be handled, for the time being, by adjusting benefits a tad downward. Medicaid’s runaway spending can be restrained by giving state governors more flexibility in administering the program. These are modest solutions. Medicare is different. It needs a big solution.
Wisconsin Republican congressman Paul Ryan, likely the next chair of the House Budget Committee, was on CNBC's Squawk Box this morning. Ryan said the United States needs "low tax rates," "sound and honest money," "regulations that are fair, predictable, transparent, [and] reasonable," and to "cut spending." Watch the video:
Yesterday the Senate voted 85-13 for John McCain's anti-VAT resolution. The lack of any substantial support for a VAT in the Senate would suggest that, even if the president's fiscal commission recommends such a tax when it reports in December, Ross Douthat is right and the chances a VAT will be imposed prior to the fiscal crisis are small. Whew.
Some additional context for today's bill signing. (See Fred Barnes's excellent post on Medicare, here.) Today, Barack Obama signed into law a new entitlement that, he says, will not only provide much-needed benefits to the American people but will put the country on a path to long-term fiscal stability:
And in fact, it is through these reforms that we achieve the biggest reduction in our long-term deficits since the Balanced Budget Act of the 1990s. So for all those folks out there who are talking about being fiscal hawks and didn’t do much when they were in power let’s just remind them that according to the Congressional Budget Office, this represents over a trillion dollars of deficit reduction that is being done in a smart way.
Paul Ryan's Roadmap for America's Future would drastically overhaul the American welfare state in a free-market direction. The Congressional Budget Office says it would solve the entitlements crisis through a series of changes to Social Security and Medicare and Medicaid. The Roadmap also includes a fundamental tax reform -- one that Ryan says, and the CBO assumes, would bring in revenues equivalent to the long-term historical average of 19-percent of GDP. Two new studies dispute that figure, however. I talked to Ryan this evening to get his response.
There are moments when the health care debate recalls George W. Bush's drive to reform Social Security. Granted, Obama's traveled a lot farther than Bush ever did: health care reform has passed both chambers of Congress, and is on the precipice of becoming law thanks to the Senate procedure known as reconciliation. Nevertheless, throughout 2005 George W. Bush traveled hither and yon trying to convince the American public that the only way to save Social Security was some vague combination of progressive indexing and personal accounts.
THINK PRESIDENT BUSH has put off reforming Social Security until 2005? Not necessarily. Republican congressman Pat Toomey of Pennsylvania, who's eager to enact reform legislation next year, raised the issue with Bush at a White House Christmas party. He was very encouraged by Bush's response.
IN A PERFECT WORLD—heck, in a merely rational world—President Bush’s strategy for combating the economic downturn and battered stock market would be obvious: He’d use the huge Social Security surplus to cut taxes, stimulate the economy, and increase stock values. That surplus, after all, means the government will suck in a projected $158 billion more in revenue than it will spend in 2002. Whether you’re a Keynesian or a supply sider, that’s a formula for chilling economic activity, not heating things up.
So, Bush would declare that the nation’s overriding priority is saving the economy.
LAST YEAR, ABOUT 16,000 AMERICANS died from treating their arthritis with FDA-approved drugs such as Advil and Aleve -- so-called non-steroidal anti-inflammatory drugs. That's what happens if millions of people, to treat their chronic pain, take a kind of drug that can increase the risk of bleeding ulcers and other complications when used over long periods. During the same time, around 200 people died from the purposeful abuse of oxycodone, the active ingredient of OxyContin and other powerful analgesics.