A Medicare Budget and Financing System. During the first five years of
the new Medicare program, the government’s annual contributions to enrollees’
plans are based on the weighted average premium of participating health plans’
bids on a regional basis. The plans bid to provide Medicare benefits plus
catastrophic coverage and, just like the FEHBP, are weighted on plan enrollment.
Thereafter, the government contribution is based on the premium bid of the
lowest-cost health plan that meets the required level of quality and provides an
adequate range of benefits. In both cases, the per capita government
contribution on the basis of the plan bidding is set at 88 percent of the bids.
By comparison, the FEHBP contribution is set at 72 percent of the national
average weighted premium, and the original Medicare Part B premium contribution
was set at 50 percent in 1965.
The Heritage plan also caps total Medicare spending. The spending cap is
indexed annually for inflation using the Consumer Price Index plus 1 percent and
Medicare population growth. If Medicare spending exceeds the cap, the
government’s contribution declines from 88 percent to the percentage that
complies with the Medicare spending cap, thereby pressuring the competing plans
and providers to control costs more tightly.
Additional Assistance for Dual-Eligibles. Medicaid, the federal–state
program for the poor and the indigent, provides supplemental coverage for about
8 million Medicare beneficiaries. These are poor people, and most qualify for
full Medicaid benefits, including long-term care services in nursing homes. They
receive subsidies for Medicare premiums and cost-sharing and for the Medicare
Part D drug coverage.
Beginning five years after enactment, states have the option to “top up” the
Medicare defined-contribution amount for dual-eligibles who choose to enroll in
a private health plan. Dual-eligible enrollees who stay with the revamped
Medicare FFS plan continue to receive Medicaid coverage as they do today.
Integrating Traditional Medicare into the System and Adding Catastrophic
Cost Protection. Under the Heritage plan, all senior citizens have the
option of keeping their current health plans or choosing better health plans. Five years after enactment, traditional Medicare FFS begins to compete
directly with private plans on a level playing field. Seniors can remain in
Medicare FFS if they wish. However, the previous organizational and benefit
distinctions within Medicare FFS (Medicare Parts A, B, C, and D) disappear
because Medicare becomes a single, unified program with a unified trust fund
that is financed by a defined contribution.
A single stated premium incorporates today’s multiple Medicare FFS premiums
plus the cost of a new catastrophic benefit. Cost-sharing parameters are
adjusted to ensure that the Medicare benefit package is actuarially equivalent
to the package provided under current law. In the first year of competition with
private health plans, the initial value of the catastrophic benefit will need to
equal the average of such benefits currently provided in the Medicare Advantage
program, but it may be adjusted thereafter by the Secretary of Health and Human
Services.
A Defined Contribution Adjusted by Income. Five years after enactment,
all newretirees receive a contribution (premium support) from the
government, just as federal employees and retirees do today. They can use this
contribution to choose Medicare’s premium-based FFS plan or one of the other
health plans. After one year of operation, Medicare enrollees in the traditional
Medicare FFS program are free to join the new Medicare premium-support program.
They can then choose a premium-based FFS plan or an alternative.
During the first five years of the premium-support program, the government’s
contribution is based on the weighted average premium of the regional bids of
competing health plans. After the first five years, the government contribution
is based on the lowest bid of competing plans in a region. The bidding system
will be phased in and will include the bids of the competing managed care plans,
other private plans, and the Medicare premium-based FFS plans offering an
approved range and quality of services.
Under the Heritage plan, low-income enrollees receive the full Medicare
defined contribution. The amount of the defined contribution starts to phase out
for Medicare enrollees with annual non–Social Security incomes between $55,000
and $110,000 and couples with incomes between $110,000 and $165,000. Enrollees
with incomes over $110,000 and couples with incomes over $165,000 receive no
government contribution and pay full, unsubsidized premiums. As with Social
Security, married couples can decide whether they want to qualify for benefits
as individuals or jointly as a couple. The phaseout income levels will be
inflation-indexed. However, Medicare remains a valuable program for
higher-income seniors because they retain access to a guaranteed-issue and
community-rated insurance program.
Under the Heritage plan over 90 percent of seniors would receive the full
defined contribution. Only just over 3.5 percent have such high incomes that
they would pay the entire premium without any contribution from the
government.
This income-adjustment of Medicare is not new. Today, for instance, Medicare
Part B and Part D premiums are changed significantly according to income. For
single retirees, Part B premiums can range widely, from $96.40 per month to as
much as $369.10 per month, depending on their income. Upper-income retirees can
pay as much as $69.10 per month more for the same Part D coverage as a
lower-income senior. What the Heritage plan does is rationalize the income
adjustment of Medicare so that it fulfills the true insurance purpose of the
program while assuring that the program will be available for future
generations.
The Reformed System. When the changes are fully phased in, seniors
will enroll in the health plans of their choice and receive a defined
contribution (known as premium support) toward the cost of their plans, much as
Members of Congress and millions of federal employees and retirees do through
the FEHBP. Unlike today, all plans will include catastrophic protection. Thanks
to the structure and insurance rules in Medicare, the premium support will be
sufficient for seniors to afford an adequate level of benefits, regardless of
age or health care condition.
The range of choices in the transformed system includes Medicare
premium-based fee-for-service insurance as well as other fee-for-service plans,
Medicare Advantage plans, managed care plans, association plans, and
Taft–Hartley Act and employer-based plans. Existing health savings accounts
(HSAs) can also be carried into retirement.
Medicare’s basic rules for insurance are retained, together with an improved
risk-adjustment mechanism to offset the impact of any adverse selection.
Underthe reformed system, Medicare’s Center for Drug and Health Plan
Choice, whose mission today is to identify abuse and oversee marketing rules for
Medicare Advantage and Medicare drug plans, carries out that function for all
plans.
Beyond retaining the Medicare insurance rules, the reform provides for fiscal
solvency and reserve requirements for all health plans to ensure that plans have
the financial resources to pay insurance claims. It also provides marketing
rules to protect consumers against fraud and a requirement that benefits be
described in plain English without surprises or denials in fine print. By
increasing choice and competition, the reformed Medicare program will deliver
better care and provide true health care security for less money than under
current projections.
The cash value of premium support is reduced for upper-income seniors and
eventually phased out for those with the highest incomes. However, all seniors
will have access to the same Medicare system with no need to buy a separate plan
to cover catastrophic expenses. Poor seniors remain eligible for Medicaid
assistance. Like the Social Security adjustments in retirement age, Medicare’s
eligibility age becomes 68 in 10 years and is indexed thereafter for increases
in longevity.
During the five-year transition period, Medicare’s traditional
fee-for-service system also changes. Part A costs are offset by a new premium
payment system for upper-income retirees. The premiums for Parts B and D rise
according to income. The highest-income seniors pay an unsubsidized premium for
Parts B and D during the transition.
Medicare must be reformed to solve this huge financing problem, to improve
access to quality care, and to ensure that health care will be available for
younger Americans when they retire.
The Heritage plan accomplishes this by transforming Medicare from an
open-ended and unsustainable defined-benefit entitlement into a properly
budgeted program that focuses Medicare subsidies on those who need them most.
The new Medicare program would look much more like the Federal Employees Health
Benefits Program (FEHBP), the health care system for Members of Congress and
federal employees.
Over a five-year period, the plan transforms Medicare into a
defined-contribution system, with stronger health security for the poor and less
healthy, and guarantees new protections against catastrophic costs for all
enrollees. Today’s traditional fee-for-service Medicare program provides no such
protections. Because of this gap, nine out of 10 seniors feel compelled to buy
supplemental private health insurance, including Medigap, to cover themselves
against the financial devastation of catastrophic illness. This means that
seniors pay an extra set of premiums and often incur high out-of-pocket costs
for both premium and non-premium medical expenses.
Finally, the plan establishes a true long-term budget for Medicare.
The Medicare program faces a 75-year unfunded liability in excess of $30
trillion even as it is plagued by serious gaps in coverage, an increasing number
of demoralized doctors refusing to accept new Medicare patients, a sluggish and
outdated system of inflexible governance, and tens of billions of dollars in
annual losses to waste, fraud, and abuse.
What Is Medicare?
Medicare is the federal government’s health insurance program for all
Americans age 65 and older and for the disabled. In 2010, the program covered 47
million enrollees. Almost half (47 percent) have annual incomes below 200
percent of the federal poverty level ($21,660 in 2010 dollars for individuals
and $29,140 for couples). An estimated 45 percent have three or more chronic
medical conditions, and 17 percent are non-elderly people with disabilities.
Medicare is projected to spend $549 billion in 2011, increasing to $891 billion
per year by 2019.
Medicare has four parts.
Part A covers in-patient hospitalization, hospice care,
and some home health care. It is funded by a 2.9 percent payroll tax, but
projected spending will far exceed future tax revenue.
Part B is voluntary and covers physician services,
outpatient hospital services, preventive care, and some home health services.
Beneficiary premiums cover just 25 percent of Part B costs. Taxpayers pay for
the remaining 75 percent. Federal Insurance Contributions Act (FICA) payroll
taxes contribute nothing to Part B. Premiums are income-related.
Part C, the Medicare Advantage program, is also
voluntary. It consists of private plans that already compete in the Medicare
program. They are funded by a combination of enrollee premiums and taxpayer
subsidies, including Part A funds.
Part D is the voluntary Medicare prescription drug
program. FICA payroll taxes do not fund this part of Medicare. Enrollees pay
income-adjusted premiums, but the costs for all beneficiaries are subsidized by
taxpayers, with greater subsidies for low-income enrollees. While beneficiary
premiums account for approximately 10 percent of Part D financing, 82 percent
comes from general federal revenues, and approximately 8 percent of the funding
comes from states and other sources. As with Medicare Part B, wealthy retirees
pay higher premiums, up to 80 percent of the costs of the drug benefit.
Medicare Part A and Part B together are sometimes referred to as traditional
Medicare or Medicare fee-for-service (FFS). This means that doctors, hospitals,
and other medical professionals are paid for the individual services that they
provide to patients as opposed to being paid salaries or given “capitated”
payments as payment for all of the care provided to a senior. The fees are
governed by government fee schedules or payment formulas for specific medical
services.
Health Savings Accounts. Health savings accounts are replaced by the
new Roth IRA savings system under the tax reform features of the Heritage plan.
Existing HSAs are grandfathered, meaning that current HSA balances are not taxed
when withdrawn, but account owners may make no further deposits in the
accounts.
However, under the Heritage tax reform, money saved for future health care
needs or for any other purpose is no longer double-taxed. In addition, any
health credit or health assistance amount not used for premiums and any unused
supplemental subsidies can be deposited into a Roth IRA–style savings account
and can be used for out-of-pocket health care expenses, including deductibles,
co-pays, and other medical expenses. Under the plan, withdrawals from these
accounts are not taxed. (See the tax reform proposal.)
New Medicaid Safety-Net Program. In the Heritage plan, low-income
nondisabled individuals and families currently on Medicaid, are covered through
the credit/assistance. Low-income disabled and elderly continue to receive care
and assistance through Medicaid.
For the Medicaid-eligible elderly and the disabled, federal Medicaid acute
and long-term care spending is converted into a capped federal allotment to the
state. Total federal Medicaid spending is set at its 2007 levels beginning in
2014, after the recovery is solid and unemployment at a normal level, and is
adjusted for medical inflation thereafter.
In exchange for the capped federal allotment, states are granted considerable
new flexibility to manage and administer the restructured Medicaid program to
meet its mutual federal and state objectives. This means that states are granted
broad discretion and authority to meet general objectives and outcome measures.
States that wish to try very different approaches to better serve and improve
health care quality for these key populations would have additional authority
beyond the normal waiver process.
While states receive an allotment from the federal government, they
still need to use their own funds to achieve agreed goals for providing care and
services for the elderly and disabled on Medicaid. However, if states use
innovative approaches that require less state spending than is now the case
under the current Medicaid formula that determines the state share (known as
FMAP), they can keep the savings and spend them on state priorities or provide
tax breaks to their citizens.
The Bottom Line
Health care is a major cost for several important federal spending programs
and for households and businesses. Thus, in addition to redesigning the
programs, health care reform is needed to slow down rising costs in the public
and private sectors. The Heritage approach to this challenge of rising health
care costs and uncertainty over coverage is to transform the current government
and employer-based models into a consumer-centered, market-based system in which
individuals own and control health care dollars and decisions and the health
industry competes for their business.
A New Health Tax Credit. The Heritage plan ends the existing tax
exclusion for employee compensation in the form of employer-sponsored health
insurance. This means that the value of employer-paid health insurance premiums
is included in the employee’s total taxable compensation. Today’s system
excludes this compensation from income and payroll taxes, effectively giving
upper-income workers in high-tax brackets a large tax benefit.
In return for ending this tax break, the plan introduces a new uniform,
nonrefundable federal tax credit to assist families in their purchase of health
insurance. Employers and employees could decide whether to have the employer
continue to buy coverage or to cash out the existing coverage in the form of
higher cash income. Either way, the tax break for coverage would change from an
exclusion to a credit.
The net value of the credit is $2,000 for an individual and $3,500 for a
couple or family. Under the Heritage plan, this credit can be used either to
offset the cost of coverage offered through the workplace or to buy insurance
outside the workplace. For most middle-income working families, the value of the
credit is similar to the tax relief that they receive for health insurance
today. For upper-income households, the new credit is typically less and is
reduced as income rises. The phaseout begins at $50,000 for an individual and
$100,000 for a family. The credit is fully phased out at $90,000 for an
individual and $170,000 for a family.
The credit is advanceable, assignable, and available on a prorated basis.
This means that the credit is available when premiums are due, enabling families
to claim the credit for premiums already paid before the end of the tax year. An
assignable credit allows a family to assign their tax credit to a health plan in
return for a dollar-for-dollar lower premium, eliminating the need to claim it
on their own tax forms.
It is important to note that health care benefits are a form of worker
compensation directed by the employer and are not “paid for” in any charitable
sense by the employers. Therefore, in the labor market, employers would likely
adapt to the tax reform either by increasing the wages for their employees
instead of offering health insurance or by continuing to offer coverage to their
employees. Either way, we know from research that the employee’s overall
compensation should stay the same in most cases.
There is no mandate on individuals to obtain insurance, but if they did not
obtain coverage, they would have to forgo the credit or assistance for
insurance. Importantly, the Heritage plan envisions much wider use by employers
of auto-enrollment mechanisms in the future, with employees automatically
enrolled in a plan as the default option. Research suggests that such an
auto-enrollment approach, combined with tax incentives or subsidies, is likely
to result in high rates of enrollment under the credit system.
Assistance for Lower-Income Working Families. Financial assistance for
purchasing insurance, equivalent to the tax credit, is made available to
households with no tax liability and prorated to those households with a tax
liability less than the value of the available credit. This money can be used
only for purchasing health insurance and typically would be sent directly to the
chosen plan in return for a dollar-for-dollar reduction in the premium to the
family. This is like the way the government’s contribution to a federal
employee’s FEHBP reduces the employee’s premium.
Thus, if a family’s tax liability is less than the value of the credit, the
family receives assistance partly in the form of a credit (up to its tax
liability) with the rest in the form of direct assistance for insurance. If this
family’s income rises in subsequent years, the amount it receives as assistance
is phased out and the credit amount is phased in, maintaining the same full
credit/assistance amount throughout the income change. In contrast to the
current patchwork health care model, the Heritage plan streamlines federal
assistance to ensure that no families fall through the cracks.
For very-low-income families with children earning less than 200 percent of
the federal poverty level (FPL), the Heritage plan provides an additional
federal subsidy worth $5,500. The full additional subsidy would be available to
families up to 133 percent of the FPL and would gradually phase out between 133
percent and 200 percent of FPL. This enhanced subsidy is intended for the
traditional, “mandatory” Medicaid populations—the groups that states are
required by federal law to include in Medicaid—and the eligibility phaseout is
designed to minimize work disincentives, unlike current law, in which Medicaid
has a very sharp eligibility cutoff. In 2011, a family of three with an income
below $37,000would meet this threshold. Again, this is paid for with
reductions in federal spending. Of course, states may provide additional
assistance to low-income families and individuals.
Health care costs are rising at an alarming rate, while individuals and
families have less control over their health care dollars or decisions. Worse
still, the recently enacted Patient Protection and Affordable Care Act (PPACA,
or Obamacare) is accelerating these problems. In sharp contrast to the
centralized government approach of the Obama legislation, the Heritage plan uses
a consumer-centered, market-based approach to reduce health care costs and give
patients and their families a greater say in health care spending and decisions
that affect their lives.
This begins by repealing Obamacare.
The Heritage Foundation has already proposed major health care reform to
create an affordable health care system in America. The reform is based on
consumer choice and ownership of coverage, together with an infrastructure for
competitive private plans and state-led innovation. The Heritage plan includes
key budget and tax components of the overall Heritage health care reform,
including reform of the tax treatment of health expenses and assistance for
health insurance for lower-income families. Other features of the health care
reform are developed in other studies and reports.
The Heritage Foundation health care proposal assumes numerous other policy
initiatives that accompany the budget design elements in the Heritage plan.
These include:
Removing consumer barriers to the purchase of health
insurance, such as existing limits on interstate purchase;
Developing mechanisms, such as risk-adjustment and
high-risk pools, to address access issues for the hard-to-insure;
Making available new pooling arrangements, such as
individual association plans; and
Supporting strong state-led initiatives to promote
innovation and experimentation with consumer-centered, market-based reforms.
These and other insurance reforms are intended to augment the Heritage plan,
to promote competition, drive down cost, and advance stability, portability, and
personal ownership.
In conjunction with the plan’s tax reforms, the current individual tax
exclusion for employer-sponsored health insurance and other tax mechanisms are
replaced with a nonrefundable fixed tax credit for households to purchase health
coverage. The credit is phased out as income rises and eliminated for
upper-income households. The switch from the exclusion to the credit system is
revenue-neutral to the federal government.
This change is needed because under today’s system, the tax code provides
unlimited tax breaks only to those workers who receive coverage through their
employers. Workers cannot use this tax break if no plan is offered through their
employers or if they simply prefer a plan other than their employer’s. Moreover,
while upper-income workers obtain a very large tax break, the exclusion provides
little or no help to lower-income workers who are struggling to afford coverage
for their families.
Through tax reform and other measures, the Heritage plan ensures that
everyone, regardless of job situation, is eligible for a tax credit or other
help in purchasing health insurance. This means that people can buy, own, and
keep the health care plans of their choice.
For poor Americans, the plan provides assistance for coverage, paid with
reductions in other federal spending. Under this reform, low-income able-bodied
adults and their children who are currently on Medicaid would no longer
participate in the costly and failing Medicaid program; instead, they would be
able to enroll in private coverage.
In addition, under the Heritage plan, low-income individuals who are not
currently eligible for Medicaid would receive financial assistance toward a
plan. This ensures that everyone who needs assistance receives assistance in
purchasing health insurance. Like those who receive the tax credit, individuals
and families receiving assistance have the same health care plan choices as
those with the tax credit and can buy, own, and keep their health insurance.
The Heritage plan transforms the remainder of today’s Medicaid program—for
the frail elderly and disabled—into a health care safety-net program rather than
today’s catch-all, patchwork program. In addition, the Heritage plan replaces
the open-ended federal–state financing arrangement that is crippling state and
federal budgets with a more consistent and sustainable capped allotment. In
exchange for the capped allotment, states are given much more flexibility to
redesign health services for the disabled and the elderly poor so that they can
provide better and more integrated services at lower cost. This new arrangement
enables states not only to provide better care for the neediest in our society,
but also to keep to their budgets without cutting other state priorities or
raising taxes.
Over the past decade, Congresses and Presidents haveundertaken a
surge of spending that has accelerated America’s speed along the road to
economic ruin. Since 2000, non-defense discretionary outlays have expanded 50
percent faster than inflation. Antipoverty spending has risen 83 percent faster
than inflation, and other programs have grown rapidly. Despite multiple
government audits that have shown many programs to be duplicative or
ineffective, no significant federal program has been eliminated in more than a
decade. Government continues to grow, financed by taxes on Americans and an
explosion of borrowing that is imposing huge additional burdens on future
generations.
Thus, although the major entitlement programs are the primary driver of
long-term spending and debt, Congress must take tough action on discretionary
programs and smaller entitlement programs to reach a balanced budget and ensure
that federal spending is smaller, more effective, and more efficient.
Under the Heritage plan, non-defense discretionary spending—appropriated
programs such as foreign aid, K–12 education, transportation, health research,
housing, community development, and veterans health care, which account for 4.5
percent of GDP—is reduced to 2.0 percent of GDP by 2021. These reforms will
reduce the burden of government, thereby empowering families and entrepreneurs
and promoting economic prosperity.
In addition, antipoverty spending is reformed. Obamacare is repealed, as
noted earlier, and replaced with an alternative solution to uninsurance and high
costs. Agriculture and education programs are structurally reformed. The central
goal for defense is to guarantee national security as prudently and economically
as possible. With improvements in efficiency, we estimate that defense needs
will require spending approximately 4 percent of GDP for the foreseeable
future.
Rather than across-the-board spending reductions, which would not set true
priorities for government, the Heritage plan follows six guidelines in designing
reforms:
The federal government should focus on performing a limited
number of appropriate governmental duties well while empowering state and local
governments, which are closer to the people, to address local needs creatively
in such areas as transportation, justice, job training, the environment, and
economic development.
Functions that the private sector can perform more efficiently
should be transferred to the private sector.
Duplicative programs should be consolidated both to save money
and to improve government assistance.
Federal programs should more precisely target those who are
actually in need, which means reducing aid to large businesses and upper-income
individuals who do not need taxpayer assistance and enforcing program
eligibility rules better.
Outdated and ineffective programs should be eliminated.
Waste, fraud, and abuse should be cleaned up wherever found.
By following these six guidelines, the Heritage plan produces a more
effective and efficient government and promotes stronger economic growth.
U.S. Sen. Mark Pryor at the 2009 Democratic Party Jefferson Jackson Dinner, Arkansas’s largest annual political event. (Did you notice that besides Mike Ross, EVERY OTHER DEMOCRAT THAT PRYOR MENTIONS DOING SUCH A GREAT JOB IN WASHINGTON IS NO LONGER IN OFFICE, SNYDER, LINCOLN, and BERRY)
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Ernest Istook at the Saint Paul Tea Party Rally 4/16/2011 Part 1
Ernest Istook, US Congressman, Heritage Foundation, http://www.heritage.org, spoke at the Saint Paul Tea Party Rally 4/16/2011. Hosted by North Star Tea Party Patriots, and Sue Jeffers.
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Several weeks ago I heard Republican Congressman Tim Griffin say that it was time for the people in Congress to put on their grown-up pants and tackle the federal spending problem. I wondered where he got that phrase, but now I know. The one thing that remains to be discovered is will Senator Pryor ( Arkansas’ only Democrat left in Washington) follow suit with the other five from Arkansas and support a solution to the federal spending problem?
This month’s KARN/AFP-Arkansas Conservative Luncheon Series will feature the Heritage Foundation’s Ernest Istook.
“A budget reflects our priorities as a nation, and I strongly believe that caring for the elderly should remain a core value of America. The Ryan plan takes a different approach, destroying Medicare as we know it. Dismantling this safety net for our seniors is unacceptable, but providing tax cuts to the wealthiest Americans on the backs of our seniors is inexcusable. I will oppose this plan,”
It is my view that Paul Ryan’s plan takes a serious look at our nation’s problems and confronts them. Below is an article by Ernest Istook that is excellent:
House Budget Chairman Paul Ryan (R-WI) has proposed a budget for grown-ups.
Washington’s big spenders have responded with the tired clichés we expect from defenders of big government:
“Pulling the rug out from under seniors,” says Sen. Debbie Stabenow (D-MI).
“Waging war on American workers,” says Rep. Xavier Becerra (D-CA).
“A path to poverty for America’s seniors and children,” claims House Minority Leader Nancy Pelosi (D-CA).
“The tea party has hijacked the Republican caucus,” says House Budget Committee Ranking Member Chris Van Hollen (D-MD).
Pee Wee Herman could have delivered more creative comebacks. But adult conversations about serious issues are lacking in Washington, D.C. Ryan’s plan should be rated at least R for Realism, while the dismissive comments are PG for Politically Guided.
Ryan’s plan is a big deal. A very big deal. Its proposed $6.2 trillion of savings (compared to Obama’s budget) over ten years is literally 100 times larger than the $61 billion that the GOP tried to cut this year — and that Democrats fought against ferociously.
Changing Medicare to a defined contribution plan is a good course to pursue, and of course a tough sell. But it makes a huge difference in controlling spending and reducing deficits. The same with revising Medicaid to give states flexibility to deliver care more efficiently — yet with limited federal outlays.
As The Heritage Foundation’s annual Index of Dependency notes, dependence on government is skyrocketing. Ryan’s plan would address that.
Spending limitations, rollbacks and freezes. Repeal of Obamacare. Cutting corporate welfare (including farm subsidies) as well as overly generous giveaways to individuals. Structural reform for federal health care programs, which are the biggest runaway spending items. Ryan is serious in a way that few other politicians are.
But his “Path to Prosperity” is about economic growth, not just spending. Tax simplification is one aspect, and so is lowering corporate taxes so businesses are not pushed overseas by what is now the world’s highest rate. A Heritage Foundation analysis finds this would create a million jobs a year for starters, and double that rate in short order.
It’s not perfect. Our national defense needs are greater than Ryan projects. Social Security’s problems are not addressed. And welfare reform should go beyond what he lays out.
But Ryan’s proposal is good, tough stuff — strong medicine that we need, not politically correct placebos that the plan’s opponents are already peddling.
We live in a time when cute sound bites substitute for debate and false claims are used to justify inaction despite our fiscal crisis. While most of his critics carp without offering any alternatives, Ryan has delivered a needed challenge before we fall totally over the fiscal cliff.
Paul Ryan respects Americans — especially taxpayers. He speaks to us like adults. For the rest of Washington, it’s time to put away childish things.
Ernest Istook is a distinguished fellow at The Heritage Foundation.
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I respect Senator Pryor’s political instincts, and I do think he will find his political views moving more to the conservative side of many of the issues because Arkansas is now turning more conservative than ever.
On Wednesday April 19th at the Political Animals Club in Little Rock, Senator Mark Pryor said he will not vote to raise the federal government’s borrowing limit unless there is a “real and meaningful commitment” to debt reduction by cutting spending and overhauling the tax code.
Is Senator Pryor starting to be more conservative in his political views? It probably did not go without notice that of the five federal offices up for election in November of 2010, only the one Democrat Mike Ross was able to get re-elected. In fact, Democratic Senator Blanche Lincoln was not even able to get 36% of the vote.
Senator Pryor has asked for spending cut ideas, and I have sent him several dozen ideas myself. I have received two generic replies. On May 24th Senator Pryor wrote:
“I am deeply concerned about current spending levels and our ever-growing national debt. I have consistently said that everything must be on the table when it comes to reducing our debt and deficit, and I mean it… I believe we can create a long-term budget plan that significantly reduces our national debt while maintaining adequate funding for our nation’s priorities. This challenge must include reducing spending, addressing entitlement programs, and reforming the tax code.”
It is my view that cutting spending is the only way to balance the budget. Currently the tax revenues are around 2.1 billion and spending is over 3.7 billion. Senator John Boozman favors a balanced budget amendment, but Senator Pryor opposes it.
Federal spending has grown 62 percent faster than inflation since 2000. Anti-poverty spending has surged 89 percent faster than inflation since 2000. Nearly half of this increase occurred in the past two years. Since 2000, Medicaid and Food Stamp rolls have expanded by nearly 20 million. This has resulted in increased government dependency.
If Senator does get re-elected he may find that he is the only Democratic Senator from the South left in the Senate after the elections of 2014. It will be interesting to see how the drama plays out this summer concerning the effort to raise the federal government’s borrowing limit above 14.3 trillion.
Below are some of the previous posts I have made about Senator Pryor:
The Debt Bomb: A Decade of DC Spending is Driving America Closer to an Economic Apocalypse Alexis Garcia reports on America’s exploding debt. Experts blame entitlements like Social Security and government spending. But what is the solution? Can we raise taxes without crushing the economy and the middle class? Does Obama really want to lower […]
Mark Levin discusses the two amendments needed to re-establish Constitutionalism as well as other things that need to be done to fix the issues facing the nation. Mark is brilliant at keep his eye on the objective and does this every night on http://www.marklevinshow.com. This excerpt is from 1/27/2011. Steve Brawner in his article “Safer […]
Mark Levin interviews Senator Hatch 1/27/2011 about the balanced budget amendment. Mark is very excited about the balanced budget amendment being proposed by Senator Orin Hatch and John Cornyn and he discusses the amendment with Senator Hatch. Senator Hatch explains the bill it’s ramifications and limitations. Senator Hatch actually worked on this bill with renowned […]
John Brummett in his article “Pryor’s words drift in gentle breeze,” Arkansas News Bureau, April 24, 2011 asserted: Raising the debt ceiling is essential to paying our debts and keeping the national and world economy functioning. Spending cuts must be made in the future, not by reneging on debt from the past. It is disingenuous […]
Dr. Jay Barth with Hendrix College comments on our latest poll results on Arkansas politics (clip from Talkbusiness) Talk Business reported today in the article “Poll Shows Beebe Strength, Pryor Shaky,” the following: A new Talk Business-Hendrix College Poll shows Gov. Mike Beebe (D) maintaining his high job approval rating, while Sen. Mark Pryor (D) […]
U.S. Sen. Mark Pryor at the 2009 Democratic Party Jefferson Jackson Dinner, Arkansas’s largest annual political event. Mark Pryor is up for re-election to the Senate in 2014. It is my opinion that the only reason he did not have an opponent in 2008 was because the Republicans in Arkansas did not want to go […]
In the article “Mark Pryor: I won’t vote to raise debt limit without reforms,” April 20, 2011, Arkansas Business reports: U.S. Sen. Mark Pryor says he won’t vote to raise the federal government’s borrowing limit unless there is a “real and meaningful commitment” to reducing the nation’s debt by cutting spending and overhauling the tax […]
Congressman Mike Pence Speaks at CPAC 2010 I have started a series on the differences of Mark Pryor and John Boozman on the issue of a balanced budget amendment. I have also spent a lot of time talking about the prospects of Mark Pryor’s re-election in 2014. Today I am looking at the difference between […]
Senator Mark Pryor wants our ideas on how to cut federal spending. Take a look at this video clip below: Senator Pryor has asked us to send our ideas to him at cutspending@pryor.senate.gov and I have just done so at 9:51 Central Standard Time on April 7, 2011. Here is the first portion of my […]
April 5 (Bloomberg) — Chris Edwards, director of tax policy studies at the Cato Institute, talks about the possibility of a government shutdown if Democratic and Republican leaders fail to reach a budget compromise by April 8, when current funding authority expires. Edwards, speaking with Deirdre Bolton on Bloomberg Television’s “InsideTrack,” also discusses House Budget […]
Mark Pryor made some comments on April 6, 2011 on the floor of the U.S.Senate concerning the possible federal government shutdown. I will provide all of his comments in my next few posts. Here is a portion below: Mr. President. We find ourselves in dangerous territory while Republicans and Democrats continue to point fingers and […]
Michael Tanner, a senior fellow at the CATO institute, explains that the rate of return on social security will be much lower for todays youth. Steve Brawner wrote in his article “Tiptoeing toward the third rail,” (Arkansas News Bureau, Jan 9,): Social Security has long been considered the “third rail” for American politicians, meaning it’s […]
HALT:HaltingArkansasLiberalswithTruth.com CBS — October 19, 2010 — New York Times’ Jeff Zeleny talks to Jan Crawford about the state of Democrats in the South… Are they a dying species? In the article “Southern Democrat much closer to extinction after GOP wave,” (Washington Times, Nov 4, 2010), Ben Evans notes: After this week’s elections, the […]
HALT:HaltingArkansasLiberalswithTruth.com Roland Martin appears on Rick’s List with Rick Sanchez and the Best Political Team on television (Candy Crowley, John King, Jeffery Toobin, Ed Rollins, Gloria Borger and Victoria Toensing) to discuss day two of the Elena Kagan Supreme Court confirmation hearings. During the analysis, Senator Graham and Elena Kagan had an interesting exchange over […]
HALT:HaltingArkansasLiberalswithTruth.com Series on Estate Tax Part 2 Grande Harvest Wines owner Bruce Nevins discusses the costs, time, and stress the estate tax, also called the death tax, places on his business, and the effect it will have on his family after he dies. It destroys investment in the economy. Tomorrow I want to get back […]
HALT:HaltingArkansasLiberalswithTruth.com Mark Pryor said on Arkansas Week in Review which was broadcast on AETN on Dec 24th “We are in a perpetual debt cycle and a perpetual spending cycle that is unsustainable….We will put together a system or a formula where we will get our debt under control. We will get this ship turned […]
Halting Arkansas Liberals with Truth This video of Mark Pryor stumping for Obama for President just shows how out of touch he is with Arkansas voters. President Obama lost Arkansas in a landslide. Mark Pryor said on Arkansas Week in Review which was broadcast on AETN on Dec 24th, “We owe the American people good […]
HALT: Halting Arkansas Liberals with Truth Senator Graham and Elena Kagan discuss Former Nominee Miguel Estrada HALT: Halting Arkansas Liberals with Truth On December 24, the Arkansas Times Blog reported: The Senate ended its lame duck session Wednesday without confirming Fort Smith attorney Paul K. Holmes as a federal judge in Arkansas’s western district.Sen. Mark Pryor, D-Ark., said he was disappointed that Holmes’ nomination did […]
HALT: Halting Arkansas Liberals with Truth (Paul Ryan outlines what has happened since the stimulus has been passed) Senator Mark Pryor voted for the American Recovery and Reinvestment Act of 2009 which was signed into law by President Obama on February 17, 2009. Both Pryor and Obama thought the economy could be jump started by […]
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