Perrspectives - Bringing light to Darkness

White Hoods, Dunce Caps and Paul Ryan

April 7, 2014

Stung by the blowback from his denunciation of the "tailspin of culture in our inner cities" bred by "generations of men not even thinking about working," Rep. Paul Ryan (R-WI) took to Fox News last week to declare, "I don't have a racist bone in my body." But the GOP's 2012 vice presidential pick needn't have bothered; the leading lights of the conservative media had already circled the wagons around him. While George Will simply decreed, "Paul Ryan was right--poverty is a cultural problem," National Review editor Rich Lowry lamented that "for this offense, Ryan was awarded an honorary white hood by the liberal commentariat."
But Ryan's isn't simply a case of "if the white hood fits, wear it." Ryan's moment of candor is also about dunce caps--his and ours.
After all, Ryan's decades-old dog-whistle to Republican hardliners that the "urban" poor are neither deserving of nor likely to benefit from federal action conveniently ignores the fact that two-thirds of Americans in poverty are white and disproportionately live in the South and in rural areas. The House budget chairman and his defenders skip over four decades of globalization, tectonic economic changes that gutted entire American industries and left devastated cities like Detroit, St. Louis and Cleveland without decent-paying jobs for the people who remained. Oh, and one other thing: Congressman Paul Ryan's entire career in Washington has been dedicated to a policy program that would make poverty in America much, much worse.

That crusade started long before Paul Ryan published the first of his "Path to Prosperity" budget blueprints calling for giving massive tax cuts for the rich, slashing non-defense discretionary spending to its lowest share of the U.S. economy in generations and turning Medicare into an underfunded voucher scheme. And years before the self-proclaimed anti-poverty champion and second coming of Jack Kemp warned about "makers and takers" and turning "the safety net into a hammock," Paul Ryan was an ardent advocate of Social Security privatization.

As the Economic Policy Institute (EPI) rightly concluded in 2011, Social Security is the most effective anti-poverty program in the United States. But as Ryan Grim and others highlighted, Rep. Ryan was at the forefront of George W. Bush's 2005 effort to divert contributions from the Social Security trust fund into private accounts. He would later agree with Texas Gov. Rick Perry that Social Security is "a Ponzi scheme." But as Matthew Yglesias explained, it was the privatizers like Paul Ryan who were perpetrating a fraud:

What privatizers want to say is that current retirees will keep getting benefits and future retirees will be okay despite our lack of benefits because we'll have private accounts. But current retirees can't get benefits if my money is in a private account. And my account can't be funded if I'm paying benefits for current retirees.

Vice President Al Gore made the same point during his presidential debates against then-Gov. George W. Bush in 2000, noting that "the trillion dollars that has been promised to young people has also been promised to older people," adding, "and you cannot keep both promises." By 2005, the Center on Budget and Policy Priorities estimated President Bush's plan to let younger workers divert a quarter of their payroll taxes into private accounts would add $17.7 trillion to the national debt by 2050. But as Jonathan Chait recounted, Paul Ryan made George W. Bush's "fuzzy math" seem brilliant in comparison:

In 2005, when Bush campaigned to introduce private accounts into Social Security, Ryan fervently crusaded for the concept. He was the sponsor in the House of a bill to create new private accounts funded entirely by borrowing, with no benefit cuts. Ryan's plan was so staggeringly profligate, entailing more than $2 trillion in new debt over the first decade alone, that even the Bush administration opposed it as "irresponsible."

Ryan's scheme looked even more irresponsible after the implosion of Wall Street in 2008. (After all, millions of seniors would have seen their retirement accounts plummet, even as investment managers raked in billions in fees.) Nevertheless, even after the near-collapse of the American financial system, Paul Ryan stuck with his Social Security privatization gambit.
With the rollout of the first version of his "Roadmap for America's Future" in February 2010, Ryan merely reduced from half how much of their Social Security payroll taxes Americans could shift into their own private accounts. As Talking Points Memo explained:

Rep. Paul Ryan, (R-WI) the ranking Republican on the budget committee, recently detailed the Republican plan for Social Security that preserves the existing program for those 55 or older. For younger people the plan "offers the option of investing over one-third of their current Social Security taxes into personal retirement accounts, similar to the Thrift Savings Plan available to federal employees."

But Ryan's boss, then-House Minority John Boehner, was having none of it. Sensing the political danger, Boehner said of Ryan's Roadmap v1.0, "it's his." And with that, Social Security privatization disappeared from Roadmap 2.0 and the 2011 House Republican budget based on it.
Ryan's plan to ration Medicare, however, was another matter.
Along with Social Security, the Medicare health program now serving 50 million American seniors has played a crucial role in dramatically reducing poverty among the elderly. And over its 49 years of existence, the cost of Medicare coverage per beneficiary has risen much less rapidly than private health insurance. So it should come as no surprise that since 2009, Paul Ryan has been trying to convert government-run Medicare into a voucher program to enrich private carriers.
In April 2009, 24 months before all but four House Republicans voted for Ryan's plan to ration Medicare, the smaller GOP minority said yea on essentially the same plan. As Steve Benen detailed in the fall of 2009:

In April, 137 Republicans voted in support of a GOP alternative budget. It didn't generate a lot of attention, but the plan, drafted by the House Budget Committee's Rep. Paul Ryan (R-Wis.) called for "replacing the traditional Medicare program with subsidies to help retirees enroll in private health care plans."
The AP noted at the time that Republican leaders were "clearly nervous that votes in favor of the GOP alternative have exposed their members to political danger."

In February 2010, Rep. Ryan unveiled his next "Roadmap for America's Future" and its "slash and privatize" agenda for Medicare. Because the value of Ryan's vouchers would fail to keep up with the out-of-control rise in premiums in the private health insurance market, America's elderly would be forced to pay more out of pocket or accept less coverage. Ezra Klein of the Washington Post described the inexorable Republican rationing of Medicare that would ensue:

The proposal would shift risk from the federal government to seniors themselves. The money seniors would get to buy their own policies would grow more slowly than their health-care costs, and more slowly than their expected Medicare benefits, which means that they'd need to either cut back on how comprehensive their insurance is or how much health-care they purchase. Exacerbating the situation -- and this is important -- Medicare currently pays providers less and works more efficiently than private insurers, so seniors trying to purchase a plan equivalent to Medicare would pay more for it on the private market.
It's hard, given the constraints of our current debate, to call something "rationing" without being accused of slurring it. But this is rationing, and that's not a slur. This is the government capping its payments and moderating their growth in such a way that many seniors will not get the care they need.

Which is exactly what the nonpartisan Congressional Budget Office concluded. As the CBO documented in 2011, Ryan's plan to replace public insurance provided by the government with vouchers for the elderly to buy their own coverage in the private market would mean getting less care for more money. The CBO analysis concluded that "a typical beneficiary would spend more for health care under the proposal." At $6,500 a year, as Director Douglas Elmendorf explained, a lot more.

Under the proposal, most elderly people who would be entitled to premium support payments would pay more for their health care than they would pay under the current Medicare system. For a typical 65-year-old with average health spending enrolled in a plan with benefits similar to those currently provided by Medicare, CBO estimated the beneficiary's spending on premiums and out-of-pocket expenditures as a share of a benchmark amount: what total health care spending would be if a private insurer covered the beneficiary. By 2030, the beneficiary's share would be 68 percent of that benchmark under the proposal, 25 percent under the extended-baseline scenario, and 30 percent under the alternative fiscal scenario.

In 2012, Chairman Ryan tweaked his proposal, keeping a government-run "public option" as one of the choices for future seniors using their "premium support" to purchase an insurance policy from his new Medicare exchanges. Nevertheless, in March 2012 the CBO still found that the elderly would have to pick up more of their own health care costs. ThinkProgress explained why version 2.0 of Ryan's voucher program was little better than the first:

Beginning in 2023, the guaranteed Medicare benefit would be transformed into a government-financed "premium support" system. Seniors currently under the age of 55 could use their government contribution to purchase insurance from an exchange of private plans or--unlike Ryan's original budget--traditional fee-for-service Medicare...
But the budget does not take sufficient precautions to prevent insurers from cherry-picking the healthiest beneficiaries from traditional Medicare and leaving sicker applicants to the government. As a result, traditional Medicare costs could skyrocket, forcing even more seniors out of the government program. The budget also adopts a per capita cost cap of GDP growth plus 0.5 percent, without specifying how it would enforce it. This makes it likely that the cap would limit the government contribution provided to beneficiaries and since the proposed growth rate is much slower than the projected growth in health care costs, CBO estimates that new beneficiaries could pay up to $2,200 more by 2030 and up to $8,000 more by 2050. Finally, the budget would also raise Medicare's age of eligibility to 67.

That grim math is why Ryan in his new budget released this week has abandoned some of the most punishing provisions of his Medicare voucher scheme, if not the scheme itself. The cap on per capita cost growth is gone, as is fixing the value to the second-cheapest plan (rather than the average) of what insurers propose. But while those changes will help ease the burden of his gambit on individual seniors, the overall Medicare program savings Paul Ryan previously claimed for Uncle Sam would be undercut.
But that wasn't all that was missing from Paul Ryan's 2014 edition of the "Path to Prosperity." Just weeks after he launched his War on the War on Poverty (a crusade thoroughly debunked and mocked by many of the same experts whose research he cited), Rep. Ryan abandoned it altogether in his new April Fool's Day budget:

"Although this budget does not lay out a full welfare-reform plan, it takes steps toward reforming these programs to encourage work, to increase economic growth and jobs, and to preserve the safety net."

Of course, as the numbers show, it does no such thing. Ryan's budget breaks his poverty reform promise for the simple reason that his proposals will make poverty worse.

The same "Flim Flam Man" Paul Krugman aptly charged with "pink slime economics" is back at it. Ryan claims his budget will balance in 10 years, thanks to $5.1 trillion in new spending cuts. But as the Center on Budget and Policy Priorities (CBPP) detailed, 69 percent of those reductions come from programs for low-income Americans. College loan programs are drained by $135 billion. Food stamps, now known as the Supplemental Nutrition Assistance Program (SNAP), would be slashed by $137 billion over the next decade. The Affordable Care Act would be repealed (though not its funding), with a staggering $2.7 trillion taken from Medicaid. (What remains would be handed over to the states as block grants.) Even new consumer protections, like prohibiting insurers from discriminating against Americans with preexisting conditions, would be jettisoned. The result:

Under the Ryan plan, at least 40 million low- and moderate-income people -- that's 1 in 8 Americans -- would become uninsured by 2024.

Ryan's numbers, CBPP rightly concludes, "contrast sharply with the budget's rhetoric about helping the poor and promoting opportunity." They also happen to not balance the budget, either.
As it years past, Paul Ryan delivers a massive tax-cut windfall for the wealthy by reorganizing the tax code into just two brackets (10 and 25 percent) that cost almost $6 trillion by 2024. Along with his proposals to eliminate the estate and capital gains taxes, Ryan's tax reforms would drain trillions of dollars from the United States Treasury in order to stuff the vaults of the wealthiest Americans, all at a time of record income inequality. The chart below from last year's version of Ryan's budget tells the tale:

The perverse result--the same one produced by every Ryan budget since 2009--is a gargantuan payday for the gilded class while Uncle Sam flounders in red ink as far as the eye can see. (The prospect is made worse by an austerity budget that would almost certainly cost millions of jobs and shrivel tax revenue, rather than deliver the mythical supply-side miracle of enhanced economic growth.) That pathetic fate could be avoided, however, if Paul Ryan were only as "courageous" as he claims he is and would name a single tax break he would close. But five years after he first pledged to "broaden the base" by curbing or ending some of the tax expenditures that cost the federal government $1.3 trillion a year, we're all still waiting for Paul Ryan to identify even one.
None of this is to suggest that Paul Ryan is a clandestine Klansman or that he doesn't speak passionately about poverty in America. But when Barack Obama speaks to African-Americans and other minority audiences about "fewer young black and Latino men participate in the labor force compared to young white men," as a community organizer, state legislator, senator and president, he has walked the walk and talked the talk. Measures like the stimulus, the Affordable Care Act, hiking the minimum wage, extending long-term jobless benefits, expanding the Earned Income tax Credit, investing in infrastructure and establishing universal pre-K programs have--or would have--actually reduced poverty. Which is why Rich Lowry is willfully ignorant when he claims:

"When Barack Obama says such things, which are undeniably correct, he is a brave truth-teller; when Paul Ryan says them, he is making an odious play for racist votes."

Given the past 50 years of Republican strategy, Americans can be forgiven for thinking the worst. Unfortunately for Lowry, the best that can be said of Paul Ryan is that the man is either a fraud or an idiot. If Ryan believes what he says about fighting poverty, he should be wearing a dunce cap. If we believe what he says, then we should all wear them.
Either way, turning to Paul Ryan for guidance on alleviating poverty is like asking a dog why it licks its ass. Actually, it's even worse: the dog doesn't pretend to care and doesn't claim to be an expert.
(This piece first appeared at Dailykos.)


Jon Perr
Jon Perr is a technology marketing consultant and product strategist who writes about American politics and public policy.

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