Rep. Paul Ryan (R-WI) is facing speculation that he may update his Medicare privatization plan to include changes for Americans older than 55 — people his prior budgets exempted from his reforms — in order to fulfill GOP leadership’s promise to align revenues and spending within 10 years.
TPM put the question to Ryan’s office. His spokesman declined to address the speculation, but appeared to leave open the possibility that the cutoff may change from 55, vowing that those “in or near retirement” won’t see any changes under the updated plan.
“With respect to Medicare, Chairman Ryan will again put forward a real solution to protect and strengthen Medicare for current seniors and future generation,” a Ryan spokesman told TPM. “His reforms ensure no changes for those in or near retirement, a sharp contrast to the real harm inflicted on seniors by the President’s health-care law.”
The question is what age constitutes “near” retirement — and whether it might this time be higher than 55.
Ryan, who is mum on the details of his upcoming budget, is facing cross-pressures — from conservatives who want him to apply his Medicare changes to Americans older than 55 on the one hand, and seniors, whom he’s vowed to insulate from Medicare privatization on the other. The proposal, versions of which the House has passed twice, would replace seniors’ Medicare guarantee with a limited subsidy to buy private insurance.
Aligning federal revenues and spending within a decade will be a daunting task — Ryan’s previous budget was not projected to balance before 2040 — and some experts doubt that Republicans can balance the books in 10 years without cutting Medicare in the near term.
“It is possible in terms of arithmetic,” said Alan Auerbach, an economist and budget expert at the University of California, Berkeley. “But it is also implausible.”
Auerbach concludes that if the Medicare cuts aren’t larger, balancing the budget within a decade may require significant cuts to Social Security or defense spending — two areas that Ryan’s earlier budgets have refused to cut. Otherwise, he said, it would mean “draconian and implausibly large cuts to everything else in the budget — nondefense discretionary spending, Medicaid and other entitlements.”
Richard Kogan, a former White House budget adviser and senior fellow at the liberal-leaning Center on Budget and Policy Priorities, believes that a friendlier fiscal landscape this year may allow Ryan to write a budget that’s projected to balance within 10 years without altering his Medicare plan.
Kogan notes that the tax hikes in the fiscal cliff deal, updated economic projections by the Congressional Budget Office and the onset of sequestration make Ryan’s task somewhat easier. But he cautions that the Budget Committee chairman’s arithmetic is already unrealistic because his prior proposals were full of gimmicks — including trillions in unspecified spending cuts and revenue gained by closing unspecified tax loopholes.
“The situation is better and now the same gimmicks would get him to balance by 2023, by my calculations,” Kogan said.
If Ryan does need to find significant new cuts to achieve balance, his options are all problematic. Proposing Social Security cuts now would create new political headaches for the GOP. Defense spending is likely off limits, too — Ryan’s budget last year raised military spending. And that budget already contained massive cuts to popular domestic programs like education, health care for the poor, and research. That leaves Medicare — an issue on which the GOP is already on the record and taken the hits. Between these choices, enacting the voucher plan sooner may potentially be the least painful of the bad options. But that would require straying from the promise the GOP has made repeatedly to seniors 55 and older over the past two years.
As Democrats await the details of his Medicare plan, Ryan is preparing to blunt their attacks by charging that their proposed reforms don’t sufficiently extend the solvency of the program.
“It will be interesting to see how Senate Democrats respond to the critical need to reform Medicare,” Ryan’s spokesman said. “After nearly four years without a budget, will leading Senate Democrats remain complicit in the looming bankruptcy of Medicare?”
But Democrats aren’t Ryan’s most pressing concern. In the House, unified Democratic opposition means he’ll face the tall order of winning over 218 of 232 GOP members to pass his own plan.
Given the party’s reliance on elderly voters, targeting Medicare benefits for current or near retirees would be a politically perilous way for them to meet their budgetary goals. But the math leaves them few better options.
Sahil Kapur is a congressional reporter for TPM. He previously covered politics and public policy for numerous publications including The Guardian and The Huffington Post. He can be reached at sahil [at] talkingpointsmemo.com.