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Bipartisan Budget Compromise and the Ryan Plan's Flaws

Strategic Insights

— 1 min read

Last week, after months of budget debates, Congress approved a bipartisan compromise budget for the remainder of the 2011 fiscal year. This compromise was negotiated by Republican House Speaker John Boehner, Democratic Senate Majority Leader Harry Reid, and the President. However, Congress soon turned its attention to the 2012 fiscal year, which begins on October 1, 2011. The House passed a budget for the 2012 fiscal year, known as the "Ryan Plan," authored by Republican Chairman of the House Budget Committee, Rep. Paul Ryan of Wisconsin. Rep. Mike Ross voted against the Ryan Plan, citing its flaws in addressing the nation's deficit spending problem.

Key Takeaways:

  • The Ryan Plan, authored by Rep. Paul Ryan, would add $5 trillion to the deficit over the next decade, according to the nonpartisan Congressional Budget Office (CBO).
  • The Ryan Plan would privatize Medicare by dismantling the program for future beneficiaries and using the funds for vouchers to purchase private health insurance.
  • The plan's vouchers would be tied to inflation, but health care costs would continue to skyrocket at twice the rate of inflation, forcing seniors to pay more for their own health care.
  • Under the Ryan Plan, a typical 65-year-old Medicare beneficiary in 2022 would pay $12,510 per year in out-of-pocket health care spending, more than double the current out-of-pocket spending of $6,150 per year.
  • The Ryan Plan assumes seniors would be able to get private health insurance with their vouchers, but as seniors age, it becomes more difficult to find affordable and adequate private health insurance.
  • The American Association of Retired Persons (AARP) stated that the Ryan Plan's changes to Medicare would "simply shift these costs onto the backs of people in Medicare" and undermine the promise of secure health coverage.

Statistics:

  • The Ryan Plan would add $5 trillion to the deficit over the next decade, according to the CBO.
  • A typical 65-year-old Medicare beneficiary in 2022 would pay $6,150 per year in out-of-pocket health care spending under the current Medicare system.
  • Under the Ryan Plan, a beneficiary's share in 2022 would more than double to $12,510 per year.
  • Health care costs would continue to skyrocket at twice the rate of inflation, forcing seniors to pay more for their own health care.

Sources:

  • Congressional Budget Office
  • House of Representatives, H. Con. Res. 34
  • American Association of Retired Persons (AARP)
  • Arkansas Rep. Mike Ross's office press release

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