Here is Paul Ryan’s path to a balanced budget in three sentences: He cuts deep into spending on health care for the poor and some combination of education, infrastructure, research, public-safety, and low-income programs. The Affordable Care Act’s Medicare cuts remain, but the military is spared, as is Social Security. There’s a vague individual tax reform plan that leaves only two tax brackets — 10 percent and 25 percent — and will require either huge, deficit-busting tax cuts or increasing taxes on poor and middle-class households, as well as a vague corporate tax reform plan that lowers the rate from 35 percent to 25 percent.
But the real point of Ryan’s budget is its ambitious reforms, not its savings. It turns Medicare into a voucher program, turns Medicaid, food stamps, and a host of other programs for the poor into block grants managed by the states, shrinks the federal role on priorities like infrastructure and education to a tiny fraction of its current level, and envisions an entirely new tax code that will do much less to encourage home buying and health insurance.
Ryan’s budget is intended to do nothing less than fundamentally transform the relationship between Americans and their government. That, and not deficit reduction, is its real point, as it has been Ryan’s real point throughout his career.
But the real focus of Ryan’s new budget proposal, like his previous one, is to dramatically reduce spending. The effort starts with a plan to transform Medicare into a voucher scheme. Ryan and his supporters don’t like the word “voucher” because it implies that Ryan’s Medicare reforms would undermine the guarantee of comprehensive health benefits that Medicare has traditionally provided to America’s seniors. But the implication is correct. As of 2024, people who reach retirement age would no longer get government insurance. Instead, they would get a voucher, which they would then use to buy insurance. Year after year, the voucher’s value would rise at a pre-determined pace. And if the voucher weren’t big enough to pay for decent benefits? The last Ryan budget never explained how such a scheme would protect seniors in those cases. The new Ryan budget doesn’t either. Most likely, some if not most America’s seniors would end up having to make up the difference on their own dime.
Ryan’s proposed changes to Medicaid get far less attention. But those changes would be even more profound. Today, Medicaid guarantees a set of benefits to everybody who meets the program’s eligibility requirements, and the federal government promises to pick up the majority of the funding, no matter the cost. Ryan’s budget would end those guarantees. The federal government would write states a check, based on a pre-determined formula, and give states more flexibility over how to spend the money. Problem is, Ryan would also dramatically reduce the programs’ funding. A 2012 analysis of Ryan’s previous proposal, produced by the Kaiser Family Foundation and conducted by researchers at the Urban Institute, concluded that between 14 and 20 million people would lose health insurance as a result.
But, of course, accuse Ryan of trying to end Medicare and you’ll get eleven trillion Pinocchios on fire.
The budget will be balanced, if Ryan gets his way, through a campaign of thoroughgoing class warfare aimed at Americans in the bottom half of the income distribution in order to protect the interests of a small, high-income minority.