Wednesday, April 06, 2011

The Ryan Plan and A Counterfactual

Mickey Kaus flirts with contrarianism but comes out on the side of common sense when he states the following about Ryan's budget plan: "I have to reluctantly conclude that it’s … a near-suicidal act that will lead Republicans off the cliff". I think the Ryan plan is a conversation starter but in many ways is unserious. I don't have issues with voucherizing medicare or block granting medicaid (though, most do) but do find it spurious that the defense budget is untouched, there are no additional revenues nor any serious discussion of tax reform (cutting rates with some hand waving about loopholes does not count as serious). So if I were the democrats I would be licking my lips for when Ryan's budget comes to a vote. This will provide a lot of campaign fodder. But what is interesting to me is a counterfactual in which instead of banking on the unpopularity of healthcare reform republicans provided bipartisan cover in exchange for making the bill a better bill. There are a lot of things Republicans could have put into play: Capping and then phasing out the Employer exclusion, making an HDHP the minimum benefit, tort reform, buying across state lines, etc. Clearly if Mitch McConnell used his leverage towards such an end the gains the republicans saw in the House and the Senate would have been diminished, though still substantial. However, this is probably a naive sentiment, having tackled health care in a constructive manner there might be sufficient residual goodwill to reform entitlements and the attendant debt burden.

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