Wisconsin Republican Congressman Paul Ryan, chairman of the House Budget Committee, has been given carte blanche by his fellow GOP House Republicans to singlehandedly propose their budget recommendations for the fiscal year 2012 that will begin this fall.
On Fox News Sunday, he said his proposal would cut $4 trillion over the next decade, and said he's ready to take on the big-ticket items: Social Security, Medicare and Medicaid. And he repeated the familiar conservative bromide that Washington doesn't have a tax problem but a spending problem, which is why he's not talking about tax increases to try to reduce the federal deficit. And he's talking about cutting Medicare by turning it into a voucher system after 2021.
RYAN: Our reforms are along the line of what I proposed with Alice Rivlin, the Democrat from the Clinton administration in the fiscal commission, which is a premium support system. That's very different from a voucher.
Premium support is exactly the system I as a member of Congress and all federal employees have. It works like the Medicare prescription drug benefit, similar to Medicare Advantage today, which means Medicare puts a list of plans out there that compete against each other for your business, and seniors pick the plan of their choosing, and then Medicare subsidizes that plan. It doesn't go to the person, into the marketplace. It goes to the plan. More for the poor, more for people who get sick, and we don't give as much money to people who are wealthy.
Doing that saves Medicare. It doesn't apply to anybody. Those who are 55 or above keep their Medicare exactly as is it today, but the problem is the biggest driver of our debt is Medicare. It has trillions, tens of trillions of dollars of unpaid promises.
We want to keep these promises. Meaning, we want to fulfill the mission of health retirement security for future seniors, and so we will be proposing a premium support system like the Rivlin-Ryan plan, which is identical to the system I as a member of Congress and all federal employees have.
WALLACE: Obviously, I am at a disadvantage, because I haven't seen the plan, but the CBO did an analysis of the Ryan-Rivlin plan, and it said that it would — the effect of the plan would be to shift more of the burden of health care costs out of their own pockets to seniors.
RYAN: Right, so for wealthy seniors especially. It also did not say these are vouchers. These are premium support, and there's a big difference here with that. It said that we're going to protect people who are low-income. We are going to protect people as their health condition gets worse. If you get sicker, you'll have more so that you can have — your rates stabilize. No more premium increases.
The key is this. There is nobody saying that Medicare can stay in its current path. Even Obamacare acknowledges that. So we should not be measuring ourselves against some mythical future of Medicare that isn't sustainable.
Medicare itself, literally, crowds out all other government spending at the end of the day. We can't sustain that. We have got to get Medicare solvent.
Rick Foster, the chief actuary, came to the Budget Committee just the other day and said, one of the best things we can do to save Medicare, one of the best things we can do to bend that cost curve and help inflation is to go to the kind of system we are proposing.
WALLACE: Now, Medicaid — and I'd better ask because I'm only — I'm basing this on the reports, the reports are that you're going to save $1 trillion over 10 years on Medicaid. True?
RYAN: No. Those numbers are different as well. You'll see our specific numbers —
WALLACE: Block grants for the states?
RYAN: You will — we propose block grants to the states.
We've had so much testimony from so many different governors saying give us the freedom to customize our Medicaid programs, to tailor for our unique populations in our states. We want to get governors freedom to do that —
WALLACE: But critics say —
RYAN: — and we will be proposing block grants —
WALLACE: But critics say you're not reforming, that you're cutting. That's you're actually going to be cutting. By giving these block grants, you're going to be cutting health care services to the poor and the disabled.
RYAN: Let me say this one thing, Medicare and Medicaid spending will go up every single year under our budget. They don't just go up as much as they're going right now, because they're growing at unsustainable rates.
Free programs alone, Medicare, Medicaid especially, and social security, take over all government revenues by the time my children are my age. When my kids are my age, who are six, seven and nine years old, at that time when they're raising their children, three programs crowd out every other federal priority. They can't keep growing at the pace that they're growing at.
So, yes, we do increase and grow Medicare, Medicaid spending but albeit not at — at the pace they're growing at because they're completely unsustainable. And that's why we're (INAUDIBLE) them with key reforms that are proven to stretch that Medicare, Medicaid dollar farther.
