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Washington Post Publishes Pack of Social Security 'Falsehoods' by GOP Wonk Paul Ryan

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This post is by Dean Baker, co-director of theCenter for Economic and Policy Research.

The Washington Post really really hates Social Security. They hate Medicare almost as much. Therefore they are willing to give its critics space to say almost anything against the program (the real cause of September 11th) no matter how much they have to twist reality to make their case.

Today, Republican Representative Paul Ryan stepped up to the plate. The Post felt the need to give him an oped column after Paul Krugman cruelly subjected Mr. Ryan's "Roadmap for America's Future" to a serious analysis last week. This violated the long accepted practice in elite Washington circles of not holding proponents of Social Security and Medicare cuts/privatization accountable for the things they say. It is therefore understandable the Post would quickly give a coveted oped slot to Mr. Ryan to make amends for such a grievous breach of protocol.

The rest of us may not have the power to invent the facts that would be needed to push our policies, but that doesn't mean we can't have fun. Let's count the inaccuracies (they call them something else outside of DC) in Mr. Ryan's piece.

1 and 2) In the second sentence we get the line:

"Only in Washington could the government raid one entitlement program [Medicare] to finance a brand-new one [Obama's health care program] and still claim that deficits have been reduced and entitlements have been reformed."

Let's see, "raid" refers to proposals to contain costs in Medicare. If I spend less on groceries this week, have I "raided" my food budget? At the least, this is an interesting use of the term "raid." Assume for the moment that the projected cost savings can be achieved without jeopardizing the quality of care (Ryan does not argue this point), what is the problem with using savings from one program to finance another and still have some additional savings left over to reduce the deficit?

That's the same arithmetic they use everywhere, even in Representative Ryan's home state of Wisconsin. (I know this, when I was in high school I went to a math contest there.) And President Obama's program was scored as reducing the budget deficit by the non-partisan Congressional Budget Office, so it was not his administration's own funny numbers.

The second sentence of the second paragraph tells readers: "Last year's report revealed a $38 trillion shortfall over the next 75 years." Presenting a huge sum like this without any context (e.g. approximately 2.0 percent of future GDP) is certainly misleading, but in keeping with the Post's policy of affirmative action for deficit hawks like Ryan, we'll ignore this one.

3) In the next sentence Ryan tells readers:

"This year the shortfall appears to have decreased, but only after the Democrats' health bill cut $529 billion from Medicare." Okay, this may not be a misrepresentation, just a non sequitur. Yes, if you are to improve a program's finances you must either increase its revenue or cut its spending, so the Democrats propose to cut spending on Medicare. You caught them in the act, Mr. Ryan.

4) In the next sentence we have: "This apparent improvement was the basis for Democratic celebration -- even though the program remains tens of trillions of dollars in the hole."

Okay, this one is beyond debate. The new projections show a Medicare shortfall equal to 0.3 percent of GDP over its 75 year projection period. This is equal to $2.7 trillion. And, even in Washington, $2.7 trillion is not "tens of trillions."

The next sentence is: "With the same legislation that cut more than half a trillion dollars in Medicare spending, the Democrats created a nearly $1 trillion health-care entitlement." Okay, this is not an inaccuracy, but Mr. Ryan the deficit hawk has now managed to attack the Democrats for cutting Medicare three times and we have just started the third paragraph.

5 and 6) Ryan then tells us: "The Obama administration's own chief actuary has explained that in addition to the dubious assumptions on provider cuts and other claims of savings, the health-care law's Medicare cuts cannot be used to both reduce Medicare's unfunded obligations and pay for a new entitlement."

Okay, the chief actuary is a non-political position. The current chief actuary, Richard S. Foster, was not appointed by Obama.

The accounting used by the Obama administration with the Medicare savings is the standard accounting used for trust funds for decades.

7) Ryan begins the fourth paragraph: "Put simply, Medicare is on course to collapse." No, the trustees report released last week implies that it has a relatively minor shortfall. The trustees could be wrong, but if their projections prove accurate, then Medicare is actually in fine shape.

8) In the middle of the paragraph we get: "Exacerbating our unsustainable trajectory, health spending explodes under the Democrats' health plan -- raiding Medicare, expanding Medicaid and creating two entitlements without any clue of how to finance the ones we have now." Actually, CBO and the trustees showed health spending growing less rapidly than they had been without the plan. And, note that we have our fourth "raid" of Medicare.

9) The paragraph concludes: "the CBO warned last month of a devastating debt crisis within two decades." Actually, CBO bears part of the blame on this. It made a mistake in its projections which it subsequently corrected.

10) The fifth paragraph begins: "We do not have a choice as to whether Medicare will change from its current structure." No, if the trustees projections are correct, then we do not have to change Medicare's structure beyond the changes in current law.

11 and 12) Later in the paragrpah Ryan tells us: "the Democrats' political machine has attacked my contribution to this debate, making the false claim that the only solution put forward to save Medicare would "end Medicare as we know it."

The main attacker of Ryan is Paul Krugman. Krugman is very far from being part of the "Democrats' political machine." In fact, he is almost certainly the prime embodiment of the "professional left" recently criticized by White House spokesperson Robert Gibbs.

Of course Ryan's plan would end Medicare as we know it. It replaces a Medicare system that pays directly for health care with a voucher system. The voucher is explicitly designed not to keep pace with health care costs. Ryan describes the rate of increase in the size of the voucher as "a blended rate of the CPI and the medical care component of the CPI." In other words, something less than the rate of increase in health care costs. It is also means-tested, so that individuals with incomes above $80,000 would see their voucher cut in half (we might see a lot of people earning $79,999 under the Ryan plan) and those with incomes over $200,000 would not get the voucher.

13 and 14) In the next paragraph Ryan boasts that his Medicare cuts (raids?) would maintain the program's solvency: "while reforming the program to ensure it will be there for younger generations. Future seniors would have access to the same coverage I enjoy as a congressman."

Of course the current projections already show that the program will be there for younger generations, so they don't need Mr. Ryan's plan, if the projections are correct. Of course there is absolutely nothing that ensures that Mr. Ryan's Medicare voucher will provide seniors with the same coverage that he enjoys as a member of Congress.

15) The next paragraph reads:

"Far from the claims of "radicalism," this proposal is based on a key reform from the National Bipartisan Commission on the Future of Medicare, chaired by then-Sen. John Breaux (D-La.). That commission in 1999 recommended "modeling a system on the one Members of Congress use to obtain health care coverage for themselves and their families."

Ryan's Medicare voucher might be a voucher system in the same way that a Yugo and a BMW are both cars, but there is absolutely nothing about Ryan's proposal that ensures Medicare beneficiaries the same quality of care as members of Congress.

16) Ryan then describes his Medicare voucher:

"The Medicare payment would grow every year, with additional support for those who have low incomes and higher health costs, and less government support for high-income beneficiaries."

Actually, the payment is explicitly designed to fall behind the rate of medical care cost inflation. Rather than those with lower incomes getting more, those with higher incomes (above $80,000 a year) would fall further behind inflation.

17 and 18) The penultimate paragraph begins: "If we act now, we can avoid disruptions for current seniors while advancing patient-centered reforms so Medicare will be strengthened for future beneficiaries. The alternative is the European-style death spiral of the welfare state: kick the can down the road as our debt explodes."

Again, the latest projections from the Medicare actuaries imply that there is no great urgency to "act now." The "European-style death spiral" might be useful political ad hominem, but it has no meaning. Some European countries, like Greece and Italy, do face severe budget problems, however some of the countries with the most expansive welfare states, like Denmark and Sweden, have much lower debt burdens than the United States.

19) Ryan continues: "Under an ever-expansive, all-consuming central government, costs will be contained with Washington's heavy hand imposing price controls, slashing benefits and arbitrarily rationing seniors' care."

Actually no one has raised the issue of rationing in any context. President Obama's plan will limit the procedures for which the government will pay, as is currently the case with Medicare. However, there is nothing that President Obama has put forward that would do anything to prevent people from getting whatever care they are willing to pay for. Apparently the word "rationing" scores well in focus groups, which is why Ryan and other Republicans use it frequently in their attacks.

20) The second to the last sentence in the last paragraph tells readers: "Ironically, if Democrats succeed in demagoguing to death efforts to save Medicare, that political victory will hasten the program's end." Of course, the Medicare trustees projections are correct, the program is nowhere near death, so we don't need Mr. Ryan's voucher plan to save Medicare.

Ryan concludes by telling readers that his proposal is "my sincere attempt to break the political paralysis on entitlement reform, to show that this challenge can be met -- mathematically and politically -- and to challenge those who disagree with my proposal to offer their own."

In the forgiving spirit of Friday the 13th, I will not count the reference to sincerity as an inaccuracy. The 20 inaccuracies and 4 references to raiding Medicare can speak for themselves. Of course to the seniors who would be unable to afford decent health care if Mr. Ryan's plan became law, his sincerity won't make any difference.

But, I am happy to offer my own test of Mr. Ryan's sincerity. How about giving Medicare beneficiaries the option to buy into the more efficient health care systems in Europe, Japan, and Canada. The beneficiaries and the taxpayers will split the savings. This leaves the current system intact for those who like it, while offering seniors who opt to go elsewhere for their health care the opportunity to pocket tens of thousands of dollars while saving taxpayers money as well. What's wrong with giving people a choice, Mr. Ryan?

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