Republican Unity on Ryan Plan is Political Suicide
If NY-26 is not a clear warning bell for Republicans eager to embrace Paul Ryan's Budget Plan, which essentially ends Medicare as we know it, I'm not sure what is. Even after that loss, 40 Republicans in the Senate "walked the plank" yesterday and voted "yes." So now it is more than the Paul Ryan Plan. It has officially transformed into the Republican Plan. Whether people agree with the plan or not, many say the Republicans should "hold firm" and "remain united" which will show strength, not weakness. Oh, and just explain it differently. Republicans just failed to message it properly. I say running away from their own plan sooner than later will be their only chance at redemption. I agree with David Frum that this GOP united front to support a plan which does the following is absolute suicide and could be the ticket for a comeback for Democrats in 2012:
~turns Medicare into a voucher system and forces seniors to pay much more while doing nothing to control costs
~makes changes to Medicaid (which will greatly impact nursing home coverage for seniors and impact the neediest of our citizens)
~is filled with tax cuts and incentives for the wealthy
~is a plan which places the most burden of costs on the poor, middle class, and the elderly.
Paul Ryan and his colleagues were so cocky after their landslide victory election in 2010 that they really thought they could push forward an extreme plan like this with little resistence. They could finally achieve their dream of ending Medicare. Well, it backfired and may have become their biggest blunder going into the 2012 elections.
The Ryan plan does maximum damage to Republicans because of its insistence on treating entitlement reform and tax reform as two tightly associated problems, rather than two separate issues to be handled at two separate times.
Ryan’s plan cuts the top rate of personal and corporate income tax from 36% to 25% with promises of offsetting revenue raisers to be determined later.
Because Ryan’s tax cuts were specific and his promises of revenue-raising reform ultra-vague, he had no defense to the attack that his tax reform involves massive downward redistribution of the tax burden. And after all, it’s hard to imagine what tax enhancements would counteract the distributional effect of a cut in the top rate of income tax from 36% to 25%. Ending the mortgage interest deduction for mortgages of between $417,000 and $1,000,000 (a good idea!) would not do it. Ending the deductibility of state and local taxes (another good idea) would not do it. A carbon tax (good idea again) for sure would not do it. Ditto a VAT. All of those measures would be good ways to raise additional revenues while leaving the current rates in place. But as offsets to a huge upper-income tax cut, they look like a shift of the tax burden from the upper class to the more affluent parts of the middle class at the same time as the rest of the Ryan budget removes Medicare coverage from the more affluent parts of the middle class – and leaves the remainder of Medicare very probably increasingly inadequate even for poorer Americans.
The one thing that might have enhanced the attractiveness of the Ryan Medicare plan is some kind of assurance of adequacy of the future Medicare vouchers for Americans under age 55.
Remember, under the Ryan plan, not only are Medicare vouchers means-tested, but they are also scheduled to grow in value at a deliberately slow pace. Today’s 40-somethings have good reason to fear that the vouchers will prove inadequate when it comes their time to retire.
Those fears could be allayed to a certain degree if Republicans would support any of the various initiatives to weaken the pricing power of healthcare providers. Some of these initiatives are included in the Affordable Care Act, others are still kicking around the think tanks. But no. Republicans condemn almost all of them as just so many variations on the death panel theme. The result: CBO projects that by 2030 the Ryan vouchers would cover only about 30% of the cost of an insurance policy equivalent to Medicare as it now exists.
And we’re going to ask Americans to vote for that? That’s the thinking that brought us Goldwater in 1964. “You’ll eat your canned peas, goddamnit, and tell us you like them!”
I used to worry that Sarah Palin would be the Barry Goldwater of 2012. My bad. Paul Ryan is the Barry Goldwater of 2012.
The Goldwater effect continues on this morning after the NY-26 debacle. Henry Olsen of AEI, as smart a political numbers guy as can be found on the political right, crunches the numbers to compare the performance of the 2011 special election candidates with the district-wide performance of all other GOP and Democratic candidates in 2010. He finds:
- Republican congressional candidate Jane Corwin is running 18 points behind the worst-performing Republican of 2010
- Democrat Kathy Hochul is running even with Barack Obama’s performance in the district in 2008 – the best Democratic showing in NY-26 in three decades.
- The Republicans suffered their worst losses in the least-educated portions of the District, where former GOP voters seem to have deserted the party for an independent candidate, Jack Davis.
What should make this race all the more alarming for Republicans is that NY-26 turned into a referendum on the Ryan plan for Medicare. As Henry Olsen says:
blue-collar voters react differently to issues than the GOP base does. They are more supportive of safety-net programs at the same time as they are strongly opposed to large government programs in general. These voters crave stability and are uncertain of their ability to compete in a globalized economy that values higher education more each year. They are also susceptible to the age-old Democratic argument that the secret Republican agenda is to eviscerate middle-class entitlements to fund tax cuts for the wealthy.
The Ryan budget is uniquely vulnerable to that attack because it fuses very tough Medicare reforms with big tax cuts in the same document.
The political dangers in the Ryan budget could have been predicted in advance. In fact, they were predicted in advance – and widely. Yet the GOP proceeded anyway, all but four members of the House putting themselves on record in favor. Any acknowledgment of these dangers was instantly proclaimed taboo, as Newt Gingrich has painfully learned. Bill Kristol and Charles Krauthammer have enthusiastically promoted Paul Ryan as a presidential candidate. And this morning, as the reckoning arrives, the denial continues. Here’s Jonah Goldberg in a column arguing that “perhaps the only guy who can explain the GOP budget should run.”
In reality, Ryan is very unlikely to accept this draft. He declined the opportunity to run for US Senate in Wisconsin, likely because he sensed he could not win a state-wide election in which his budget would be the main issue.
Now we’re likely headed to the worst of all possible worlds. The GOP will run on a platform crafted to be maximally obnoxious to downscale voters. Some may hope that Tim Pawlenty’s biography may cushion the pain. Perhaps that’s right, at least as compared to Mitt Romney, who in the 2008 primaries did worst among Republicans earning less than $100,000 a year. And yes, Pawlenty is keeping his distance from the Ryan plan. But biography only takes you so far. The big issues of 2012 will be jobs and incomes in a nation still unrecovered from the catastrophe of 2008-2009. What does the GOP have to say to hard-pressed voters? Thus far the answer is: we offer Medicare cuts, Medicaid cuts, and tighter money aimed at raising the external value of the dollar.
No candidate, not even if he or she is born in a log cabin, would be able to sell that message to America’s working class.