In picking Rep. Paul Ryan of Wisconsin as his running mate, Republican presidential candidate Mitt Romney has associated himself with a conservative ideology that envisions a radical transformation of popular government health and income security programs like Social Security and Medicare as part of a dramatic shrinking of the size and scope of government. Analyses by my colleagues at the Center on Budget show what Americans would be giving up if they embraced that vision.
Ryan's 2010 "Roadmap" budget plan would cut benefits and privatize substantial portions of Social Security. But as my colleague Kathy Ruffing points out in wishing Social Security a Happy 77th Birthday, "this highly successful program" is "the single most important source of income for its elderly beneficiaries, contributing on average two-thirds of income for recipients over age 65." As she points out, Social Security keeps millions of American out of poverty:
For more than one-third of [recipients], Social Security constitutes 90 percent or more of income. Reliance on Social Security is especially high among the oldest old—those who can no longer work and may have outlived their savings—and elderly blacks and Hispanics. Without Social Security, nearly half of elderly Americans would live below the official poverty level; instead, fewer than 10 percent do (see chart).
Ruffing also points to the critical role of Social Security in most Americans' retirement planning:
With the continued decline of the traditional defined-benefit pension, Social Security is the only retirement income most Americans will collect that's indexed to inflation and guaranteed to last as long as they live. And because it's not means-tested, Social Security encourages people to supplement their retirement income by working part-time or by saving money.
The budget resolution developed by Congressman Ryan in his role as House Budget Committee chairman and passed by the House this year would make significant changes to Medicare and Medicaid. My Center on Budget colleague Paul Van de Water found that the Ryan proposals for Medicare "would likely lead to the gradual demise of traditional Medicare by making its pool of beneficiaries smaller, older, and sicker—and increasingly costly to cover." Our colleague Edwin Park found that the Ryan budget's proposal would radically restructure Medicaid, which together with its proposal to repeal health reform's Medicaid expansions would add millions of people to the ranks of the uninsured and underinsured.
These radical changes are unnecessary to meet the nation's long-term budget challenges. As Ruffing points out, "Social Security faces a long-term shortfall that's predictable and manageable." There are numerous proposals (e.g. this one) for addressing that shortfall which do not involve a radical restructuring of the program. Medicare does face financing challenges, but as Van de Water shows,
Medicare and Medicaid spending per beneficiary has grown less rapidly than costs for private health insurance in recent years…This favorable trend is projected to continue for at least the coming decade, according to a new article in The New England Journal of Medicine. These data belie the claim that spending for Medicare and Medicaid is "out of control" and that the programs must be fundamentally restructured.
Moreover, advocates of radical changes to Medicare perpetuate the myth that the Affordable Care Act (a.k.a. health reform) "robs" Medicare, when in fact it strengthens it. Add that to the myths about government spending, debt, and taxes I described in a previous post that many politicians rely on to justify their support for Congressman Ryan's latest budget proposal—which, by the way, if implemented would be unlikely to balance the budget for decades.
By choosing Paul Ryan as his running mate, Mitt Romney has set up a potentially momentous ideological debate over the size and scope of government. It remains to be seen how well voters will understand that they will be deciding about critical trade-offs among their conflicting desires for balanced budgets, low taxes, and the continuation of popular programs like Social Security and Medicare without radical changes.