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22 Aug : 05:11

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CBO concedes that its number is highly uncertain and "will depend on the evolution of the health care and health insurance systems over time, which is hard to predict." That's for sure.

Republican Vice Presidential candidate, U.S. Rep. Paul Ryan (R-WI) speaks during the Victory Rally in Florida at Town Square, Lake Sumter Landing on August 18, 2012 in The Villages, Florida.

The more fundamental problem is that the CBO analysis has nothing to do with the current Mitt Romney-Paul Ryan plan. Nada. Over the last year Mr. Ryan has made major adjustments to his original proposal as he sought a compromise with Democrats. In its most up-to-date analysis, CBO admits that it "does not have the capability at this time to estimate such effects" in the new version. That is, it does not have the tools to make its $6,400 exaggeration again. The reason CBO can't model the 2013 House budget and the Romney-Ryan plan is that they harness markets with competitive bidding. Congress's budget gnomes can't handle these dynamic forces. So how would Ryan 2.0 work in practice? Traditional Medicare and all private insurers in a region would make bids to cover seniors and compete for their business by offering the best value and prices. Then the government would give everyone a subsidy equal to the second-lowest bid. If seniors chose that No. 2 option, whether it was Medicare or another plan, they'd break even and pay nothing extra out of pocket. If they picked the cheapest plan, they'd keep whatever was left over after the government subsidy—that is, they'd get a cash refund. If they instead picked the third-cheapest option, the fourth-cheapest, etc., they'd pay the difference above the government subsidy. That structure ensures that seniors would have at least two choices (and likely far more) that they are guaranteed to do better than they do now. The amount of the premium-support subsidy would also be tied to underlying health-care costs, so it would not shift costs to beneficiaries, as Democrats also falsely claim. The very reasonable Romney-Ryan policy bet is that costs could nonetheless fall over time because seniors would have the incentive to switch to the most competitively priced Medicare plan. The latest real-world reason to expect that would happen comes from a new paper by the Harvard economists Zirui Song, David Cutler and Michael Chernew. The researchers—Mr. Cutler used to be an Obama health adviser—looked at Medicare Advantage, the program that currently gives one of four seniors private alternatives (and that ObamaCare deliberately undermines). The Advantage insurers make bids today against a benchmark set by traditional Medicare spending, and the Harvard trio find that the second lowest bid in 2009 came in 9% below the normal program on average. Medicare costs $717 per person per month, but the cheapest private plan could provide the same coverage for 87 cents on the government dollar. The second cheapest could do it for 91 cents. Messrs. Song, Cutler and Chernew are alarmed because they say their results imply—broadly speaking—that seniors in traditional Medicare would have to pay $64 a month more if they kept that coverage. (Note: That totals $768 a year, not $6,400.) But a better way of reading the data is that seniors would migrate to more cost-effective options, saving both themselves and taxpayers a bundle. None of these facts are likely to deter Democrats from their distorted claims. But the truth is that the Ryan-Romney reform isn't anywhere close to Mr. Obama's cartoon version.Printed in The Wall Street Journal, page 16

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22 Aug : 05:09

KIMBERLEY STRASSEL:: Why Republicans Can Win – WSJ

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and their job is to keep repeating things they’ve been told.So in thrall is the Beltway crowd to its received beliefs that it has missed this (minor) point: America looks nothing like it did even four years ago. The political landscape has been upended. And that is why Republicans can win this year.As they have been winning. Those who insist the GOP loses when it talks entitlements have yet to explain Mr. Ryan. True fact: You can’t be the House Budget chairman without having won an election. That’s what Mr. Ryan has done, seven times, in a competitive Wisconsin district that contains senior citizens, independents and party moderates—and that voted Obama in 2008.Save for his first run, he’s never earned less than 63% of the vote. And he’s done that by taking the entitlement fight to his opponents.Ah, say the pros, but even Mr. Ryan couldn’t win an oldster state like Florida. Senior citizens will flip out. So they said in 2010, when Marco Rubio, in a debate with opponent Charlie Crist, suggested raising the retirement age and altering benefits to preserve Social Security. “Rubio just lost Florida!” screamed the Twitterverse.Well, Sen. Marco Rubio is still talking about entitlement reform today. As are Republican Sens. Ron Johnson, Pat Toomey and Rob Portman, who beat Mediscare in swing states in 2010. As are dozens of House freshmen who ran on Mr. Ryan’s budget.They won because something fundamental has changed in the electorate. Our country has been through recessions before. What it has not experienced is an administration that used an economic slowdown to spend America into a debt crisis. The debt numbers are today so extreme ($16 trillion, 70% of GDP), the consequences so real (credit downgrades, default), that voters are scared.Add to this the creeping nearness of an entitlement explosion. Social Security payouts already exceed revenue. Medicare could be bankrupt in eight years. In a 2011 Gallup poll, 67% of Americans agreed that Social Security and Medicare would create a financial crisis within a decade. Voters are willing to have this debate.Then there’s the other dramatic political change, more recent: Voters for the first time have an honest entitlement choice. Democrats have for years claimed that the choice was between the status quo and GOP cuts. Then they passed ObamaCare. In doing so, they put themselves on record with their real plans for Medicare.The president’s Affordable Care Act uses Medicare as a piggy bank, stripping today’s program of $716 billion. And the law’s way of dealing with the ensuing Medicare shortages is to empower a group of 15 individuals to make decisions on what medical services will need to be cut. So how does the Democratic Party intend to fix Medicare? Cut Medicare dollars, ration care. Now we know.It is this Obama Medicare plan—not the status quo—that Republicans are running against. It is against this that they are contrasting Mr. Romney’s proposal to restore that $716 billion, to preserve existing benefits for those 55 and above, and to give younger Americans more options and continued quality care.There is only one candidate gutting Medicare today: Mr. Obama. There is only one candidate who will preserve Medicare for future generations: Mr. Romney. That comparison is striking, and it blows up conventional wisdom.In a Rasmussen survey this week, Florida voters were asked, “When it comes to the future of Medicare, which scares you more: President Obama’s health-care law or Paul Ryan’s proposal?” By 48% to 41%, Floridians were more scared of Mr. Obama’s $716 billion cut. And Floridians age 65 and up? By 54% to 34%—a 20 percentage-point difference—Florida seniors feared most an Obama future.Democrats may not have good ideas, but they aren’t blind. They’ve felt the shifting landscape, lived through 2010, and they understand the threat of a bold reform politician.That’s why Mr. Obama has personally spent such time the past two years publicly working to isolate and discredit Mr. Ryan. He’s not thrilled by the Ryan pick, oh no. He fears it.This fear, this fundamentally changed political landscape, does not guarantee a Republican victory. But what it does promise is that if the Romney-Ryan ticket stays on offense—if it can fight to a draw on entitlements and leverage the powerful economic argument—then it has every shot at the White House.

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22 Aug : 05:06

The Mediscare Boomerang

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So now the money you paid for your guaranteed health care is going to a massive new government program that's not for you."

WSJ Editorial Board Member Joe Rago says Mitt's new Medicare ad is exactly what Republicans need to do if they want to capture the White House. Photos: Associated Press

If this horror show sounds familiar, perhaps that's because the Romney ad is a variation on classic Democratic media buys not merely in the Tea Party era but the 2000s, the 1990s, the 1980s, the 1970s, if not to the very creation of Medicare in 1965. Any time Republicans so much as suggest that the entitlement state has a problem, and even if they don't, Mediscare becomes a main election theme. According to the usual Beltway rules, the Washington potentates call for an honest debate even as they defend or excuse the rank Democratic falsehoods in order to defeat even the modest reform that they will then claim we need, if only there had been an honest debate. The Republicans are supposed to act like Quakers amid the pummeling and are only allowed to appeal to columnists and wonks with their boring old budget charts and obscure details. And then lose elections. Well, now we're learning that the same tactics can be used against Democrats too. The difference this time is that the Romney-Ryan ticket is trying to create a political shock absorber against Mediscare so voters can consider the substance of a genuine reform alternative that modernizes the entitlement state, rather than simply expanding it. For the record, President Obama's $716 billion is a "cut" only in the sense of slowing the rate of spending growth over 10 years, which is the baseline Democrats always use. Medicare spending will continue to rise rapidly. The Obama "cuts" come by cranking down Medicare's price controls for hospitals and by gutting Medicare Advantage.The real term for this familiar Beltway ploy should be Medicare austerity—i.e., keep the status quo, only less of it—rather than reducing costs over time through the structural change the program needs. But it is factually correct to say that Democrats took money from Medicare and then used the "cuts" to hide ObamaCare's true 13-figure cost.

Either Mr. Obama's apologists can defend raiding one insolvent entitlement to finance another one and own the cuts. Or they can say these Medicare cuts don't really count as cuts, as the media fact checkers are suddenly finding ways to do. In which case it means repudiating Mr. Obama's repeated claims that the Affordable Care Act reduces the deficit and that "I have strengthened Medicare," as he put it in Dubuque on Wednesday. The larger reality is that Medicare cannot and will not continue as it is, as the President used to admit. A sampler of his rhetoric from the town-hall summer of 2009: "Mark my words," he declared in Grand Junction, Colorado, "Medicare in about eight to nine years goes into the red. . . . It is going broke." He added in Portsmouth, New Hampshire, that "What is truly scary—what is truly risky—is if we do nothing" because Medicare is "unsustainable" and "running out of money." In Belgrade, Montana, he said the program must be reformed "to be there for the next generation, not just for this generation." What he rarely mentions is how he plans to fix Medicare under ObamaCare. First the government will do things like arbitrarily commanding providers to deliver the exact same benefits except for $716 billion less. When that doesn't work, as it surely won't, the feds will take control of the case-by-case decisions currently made between patients and doctors and substitute the judgment of technocrats. (See what's already happening in Massachusetts, "RomneyCare 2.0," August 6.) ObamaCare does this by empowering an unelected 15-member panel to rule over medicine and tell doctors how to practice, with no legislative or judicial review. Before he decided to fire up Mediscare again, Mr. Obama used to concede that this form of rationing by elites was inevitable. In a 2009 interview with David Leonhardt, he mused whether his own grandmother's hip replacement after a terminal cancer diagnosis represented "a sustainable model" for society. *** Paul Ryan and Mitt Romney are proposing an alternative to protect Medicare patients from this government-run future, and nothing in the GOP Mediscare counterattack is remotely as misleading as the attacks that Mr. Obama has been making against their reform. The Romney-Ryan plan doesn't "end Medicare as we know it," doesn't include vouchers, and doesn't force seniors to shoulder the $6,400 in higher health costs that Mr. Obama mentions at every campaign stop. Their "premium support" reform explicitly preserves traditional fee-for-service Medicare. Starting in 2023, seniors could either pick traditional Medicare or choose from a menu of regulated private plans. The reform is modeled after the health program that already covers all federal workers, including Members of Congress. The subsidies increase with health costs, so seniors wouldn't bear more risk. The plan wouldn't kick in for a decade, shielding everyone who is in or near retirement. Our preference would be to start immediately, but the delay is one of many political accommodations to help ease the worries of current retirees. *** In a normal political year, the liberal Mediscare tom-toms might have scared Republicans from this issue, and Mr. Ryan probably would have remained an admired if sidelined Congressman. But Mr. Obama decided via the Affordable Care Act to remake the entire health-care system including Medicare, and thus he also changed the politics. The destructive policy and unpopularity of ObamaCare have made Paul Ryan's reform politically possible, meaning that voters may be open to hearing the real choice they face between command and control or private competition and more patient choice. Throw in the lousy economy and the Obama spending and debt binges, and the GOP this year has a chance to win a health-care debate if it goes on offense and contrasts its solutions to Mr. Obama's. That's the real reason liberals and the press corps claim to be so upset by the Romney Medicare ad. By governing so far to the left, Mr. Obama may have neutralized Mediscare and made voters more receptive to center-right solutions. Medicare is already changing because it must. The difference this year is that Republicans have a plan to save it.

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