October 24, 2014
That distinction would have improved the accuracy of a NYT article on the Republicans’ economic plans. The piece noted that Senate Republicans have limited their economic agenda. It told readers that they no longer call for the repeal of the Affordable Care Act and have abandoned the “so-called Ryan Plan, a long-term budget to revamp Medicare and Medicaid and significantly reduce other domestic and military spending enough to balance the budget in 10 years, while sharply cutting taxes.”
Actually the Ryan plan was not really a plan to balance the budget while sharply cutting taxes. Ryan instructed the Congressional Budget Office (CBO) to assume enough budget cuts from non-Social Security and non-Medicare spending to bring the budget into balance. He never proposed any specific cuts that would come anywhere close to meeting this target. In fact, he recently has been pushing for increases in spending in one of the areas that he previously had slated for cuts, the Earned Income Tax Credit.
There is a similar story on the tax side. Ryan instructed CBO to assume in its scoring that enough deductions would be eliminated to offset the revenue lost from his tax cuts, however he has never actively supported the elimination of any major tax break (e.g. the mortgage interest deduction or the deduction for employer-provided health insurance). In short, he had nothing resembling a real plan.
The piece also told readers:
“While most economists and business executives do not look to Congress for much, they do want a rewriting of the corporate tax code and a revamping of fast-growing entitlement benefit programs, even as they acknowledge that is virtually unachievable.”
It is not clear how it determined the views of most economists and business executives. While there probably is little disagreement that the corporate tax code is a mess, it is not clear that most economists and business executives see an urgency to “revamping fast-growing entitlement programs.” The real news here is that the sharp slowdown in health care cost growth in recent years has caused projected growth of Medicare and Medicaid spending to fall sharply. In fact, the projections have fallen more as a result of the slower pace of health care cost growth than would have been accomplished by many austerity plans, like the one put forward by Erskine Bowles and Alan Simpson, the co-chairs of President Obama’s deficit commission.
This slowdown in health care cost growth has removed the urgency for doing anything to change Medicare and Medicaid. Given the very limited assets of most workers near retirement age, there are few economists who view it as realistic to have any substantial cuts for Social Security any time soon. So it is simply not true that there is some widespread consensus around overhauling these programs.
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