On a more meaningful timeframe, say the ten-year projection, Mr Ryan's bill cuts the deficit from 7.4% of GNP (under the CBO's "alternative scenario" of current trends) to 3.7% of GNP. But only 0.4% of that cut comes from reducing health-care costs. The rest of it comes from freezing non-defence discretionary spending in nominal terms. This is so drastic as to be impossible; but more important, it's not really relevant to Mr Ryan's health-care policies. Looking further out, Mr Ryan's major Medicare savings kick in in 2021, but even by 2040, he is still only getting about half of his spending cuts from Medicare and Medicaid. The other half comes from that nominal-dollars spending freeze.
In other words, Mr Ryan's health-care reforms don't actually balance the budget. He slashes Medicare and Medicaid drastically, but to balance the budget, he still has to project unrealistic cuts in everything else the federal government does (apart from defence, for whatever reason). And the burden of Mr Ryan's health-care cuts will fall on the poor and the sick, because he doesn't do any work to make the system more fair.
Wednesday, February 10, 2010
About Paul Ryan's unrealistic budget cuts
Enough about how Paul Ryan's Road Map balances the budget on the backs of poor seniors, says the Economist's Democracy in America blog. Let's look at its totally unrealistic discretionary spending cuts: