President Barack Obama’s campaign has a new ad accusing Ryan and Mitt Romney of a scheme “ending Medicare as we know it.” But the real enemy of Medicare “as we know it” is not Ryan. It’s arithmetic.
This is an interesting point of view. It’s not very sexy and not eye-catching like the Obama story: ending Medicare as we know it. But it’s true: left alone, Medicare will end itself, all by itself.
Medicare is the second biggest item in the entire federal budget and one of the fastest growing. Over the past 30 years, its cost has doubled as a share of our gross domestic product, and over the next 30, it’s on track to double again.
At the rate we’re going, Medicare, Medicaid, Social Security and interest payments will consume the entire federal budget by 2025.
That’s called unsustainable.
And Ryan’s approach does two things: it protects those already in the system, and gives those not in the system time to adjust:
His chief reform is to shift from a defined-benefit program, which obligates the government to cover all costs, to a defined-contribution approach, which commits the government to provide a fixed amount of money for each recipient.
Chapman is honest about Ryan:
Not that he has a stellar record in this or other areas of the budget. In the past, he’s been the fiscal equivalent of a chicken hawk: tough until it’s time to put his own survival on the line.
He voted for President George W. Bush’s plan to furnish prescription drug coverage to seniors, adding $8 trillion to the government’s unfunded obligations. He voted to bail out General Motors. He voted for TARP.
He did more than his share to help Bush add $5 trillion to the national debt.
All that aside, I think the real enemy of Medicare is that it violates the Constitution. The fact that it is unsustainable helps point out its fatal flaws. But to me the biggest flaw is getting the government involved where it doesn’t belong. And you can’t fix that through reform.