There was never really a credible argument to be made that Republicans and conservatives had no ideas with regard to how to solve problems with healthcare, taxes, and the fiscal train-wreck that the nation's entitlement programs are heading toward. Individual private Social Security accounts, lowering business, capital gains and individual income tax rates, capping medicare payments for those still ten years or more away from retirement, providing a health insurance tax credit, etc. etc., are thoughts that conservatives have been thinking for years. The amazing thing though about Paul Ryan's H.R. 6110 (introduced with Tom Coburn and others in the Senate) is that it boldly puts the ideas all into one place. If ever the word audacious was appropriate for our political world this is surely the time.
In short (and believe me, this is short), H.R. 6110 institutes a "qualified health insurance" tax credit, reforms the Medicaid and SCHIP programs, reforms Medicare and makes it fiscally sound, (re-)introduces private Social Security accounts, eliminates the death tax, allows taxpayers to opt into a simplified system with only two tiers and, aside from the healthcare credit, essentially no deductions or credits, fully repeals the alternate minimum tax, eliminates taxes on interest, capital gains and dividends, reforms the business tax and slashes spending overall. Oh and by the way it insures the 47 million Americans currently without coverage and sends a nice basket of fresh fruit and chocolates to every household in the nation.
As Glenn Reynolds would say, read the whole thing.
Here's the point: it is now all on record. It's all in one place. You ask us for ideas, this is what we want.
Let me try to explain why "audacious" does not sufficiently cover this situation. Conservatives have been trying to get each of these things through Congress for years and have, in the best of political times seen their legislation die a slow death (think Bush and Social Security reform).
Question: is this a good idea ? politically, I mean. This bill contains cuts to Medicare, private Social Security accounts, repeal of the death tax. These have all been transformed into Reptilian bogeymen over the past twenty years. You can be sure that some Democrats in some districts will be waving this bill like a bloody red flag before November: "HEEERRRREE is what they want to do to your medicare !!" "WHHERRRRE will be your precious monthly retirement check the next time the market crashes ???" From thirty thousand feet it looks like a target-rich zone.
But I, for one, don't care. I like it. It has been said and it is good. I would love to have been in the room when Nancy Pelosi first laid eyes on the "Findings and Purpose." Surely she laughed that annoyed-civil-servant laugh of hers and said: "they've got to be kidding." But it had to bring a little clammy coldness to her hands and feet to think that "they actually have the temerity to ask for all this stuff ???"
Additional thoughts here, here and here. Thoughtful (albeit errant) post from the proverbial other side of the aisle here.
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Michael, to continue our Facebook discussion, I think Paul Ryan’s plan is a good one, but here is a quick hit on the pros and cons.
Pro 1: Addresses the unsustainability of current entitlements, specifically Social Security and Medicare. Con 1: Confusing solution to seniors and the rest. Easy to demagogue against (See Bush, George). Proposed response: “Entitlements must be reformed. Social Security will be replaced by an opt in system that will allow individuals to take a portion of their payroll tax and put it in a protected, government guaranteed retirement fund of US Savings Bonds managed by pre-qualified investment houses (eg, Fidelity). Anyone who opts out will have their current Social Security benefits fixed at today's levels. Anyone who opts in will continue with the system as is. The payroll tax ceiling will be eliminated.”*
As for Medicare, I would not touch the Ryan voucher approach, but we still need to institute tort reform and allow insurer to sell across state lines. Choice is always an easy sell.
Pro 2: Simplified Tax Approach. Pros: The simpler the better. Love the elimination of cap gains. Cons: A Business Consumption Tax (i.e., National Sales Tax) is a very tough sell; in MA it amounts to increasing the sales tax from 6.25% to 14.75%. As an economist, sales taxes are just a bit too regressive for me. Proposed Response: “A simpler tax code is the best way to increase fairness and lessen the opportunity for moneyed interests to lobby for loopholes. The simplest approach would be to take the 0%/10%/25% income rates and apply them to all taxpayers – individuals and businesses.”
There is clearly much, much more to be said, but I have run out of time. Next topic, reducing the deficit.
*Eliminating the payroll tax cap is a red herring in that the net effect will be to drive upper middle and higher earners to opt OUT of the system, which becomes a back-handed way to impose means testing. I also purposely use US Savings Bonds because that takes the “privatization” issue off of the table.
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