The Path to Prosperity
Encyclopedia
The Path to Prosperity was the Republican Party
's budget proposal for the year 2012. It competed with budget proposals
outlined separately by President Barack Obama
. and the Congressional Progressive Caucus
. The Republican proposal was formalized and passed by the House of Representatives
on Friday, April 15, largely along party lines. No Democrats voted in favor of the bill and only four Republicans voted against it, which created a 235 to 193 end vote total. The four Republican members of Congress who voted against the bill were Walter B. Jones, Jr., David McKinley
, Ron Paul
and Denny Rehberg
. A month later, the bill died in the Senate by a vote of 57-40.
Representative Paul Ryan
, Chairman of the House Budget Committee, played a prominent public role in drafting and promoting The Path to Prosperity proposal, and it is often known as the Ryan budget, Ryan plan, Ryan proposal, etc.
The 2012 United States federal budget
funds the operations of the Federal government of United States for the fiscal year 2012, which runs October 2011–September 2012.
(CBO) by Paul Ryan's staff, encompasses changes to Medicare, Medicaid, the major 2010 health care legislation, other government spending (excluding that for Social Security), and tax law.
, unemployment compensation, Supplemental Security Income, the refundable portion of the earned income and child tax credits, and veterans’ programs.
receives no changes in the proposal compared to the baseline. The CBO states that "spending on that program is projected to be relatively stable as a share of GDP from 2030 forward."
A news analysis piece by Glenn Kessler in the Washington Post stated that the proposal "relies on dubious assertions, questionable assumptions and fishy figures". He stated that it involved unrealistic assumptions for the status quo (the alternate fiscal scenario) such as the inclusion of all the Bush-era tax cuts being extended forever and the alternative minimum tax being indexed for inflation.
Ryan appeared on the April 3rd episode of Fox News Sunday
with Chris Wallace to discuss the proposal.
Minority Whip Steny Hoyer
, a Democrat from Maryland, remarked on CNBC
's Squawk Box
that the House had ignored the recommendations made by the federal deficit commission
. Hoyer said, "This is exactly the same rhetoric, exactly the same kind of plan that was offered in 2001 and 2003, and it led to the deepest recession this country has seen; extraordinary loss of jobs and a tanking of the stock market. Very frankly, that's not a path we want to go down again."
Speaker of the House John Boehner
and House Majority Leader Eric Cantor
praised Ryan's proposal. They argued that a national conversation must take place between people of all political stripes about the fiscal future. Boehner remarked, "The president is certainly entitled to disagree with our budget... but what exactly is his alternative?"
Cantor said on the April 10th episode of Fox News Sunday
with Chris Wallace:
Economist Paul Krugman
called it "ridiculous and heartless" due to a combination of income tax rate reductions (which he argued mainly benefit the wealthy) and large spending cuts that would affect the poor and middle classes. The New York Times editorial board wrote: "We are also certain that repealing [Obama's healthcare ] reform — the Republicans’ No. 1 goal — would do enormous damage to all Americans and make it even harder to wrestle down health care costs, the best way to deal with the country’s long-term fiscal crisis."
According to Henry Aaron, one of two economists who coined the term "premium support" in response to criticisms of health care vouchers, states that the Republican plan for Medicare uses vouchers, not “premium support”. The defining attribute of the plans that Aaron christened “premium support” was that governmental financial support would rise with average health care costs. The Republican plan instead, has this support rising with the consumer price index
(general inflation). This difference is crucial to understanding the Republican proposal—the cost of health care is rising much faster than the consumer price index. The Republican voucher plan is virtually guaranteed to become increasingly inadequate over time. Beneficiaries will need to pay for the increases in health care costs due to inflation –- that how the Republican plan saves money.
The vouchers would rise in value with the consumer price index (general inflation), but as medical expenses have been rising much faster than the consumer price index, the value of the government subsidy would erode over time. When the program begins in 2022, the typical 65-year old would be responsible for about 25% of the cost of their healthcare, which is consistent with Medicare as it exists today. However, the share paid out-of-pocket by this typical 65-year-old in 2030 would be 68% under the Republican plan, according to the bipartisan Congressional Budget Office.
Chairman Paul Ryan claims that his new Medicare plan was modeled after the health care plans that Congressmen themselves currently receive. Others point out that Members of Congress have what is called a "fair-share deal"; they do not bear the entire risk of increased costs due to health care inflation. The health care plan that Members of Congress use, indexes benefits to health care inflation, not to the consumer price index. As health care become more expensive due to inflation, the government, not Members of Congress is responsible for most of the extra costs.
Chairman of the Senate Budget Committee Kent Conrad
, a Democrat from North Dakota
, told NPR's Morning Edition that the reductions in Medicare spending would be "draconian". He also faulted the effort for not including cuts to defense spending and tax increases, which Hoyer argued must be part of any serious budgetary reform.
Democratic Representative Debbie Wasserman-Schultz, incoming chair of the Democratic National Committee
, stated that "This plan would literally be a death trap for seniors".
Several presumptive Republican Presidential candidates made statements in support of the proposal. Former Minnesota
Gov. Tim Pawlenty
and former Massachusetts
Gov. Mitt Romney
applauded the effort for "offering real leadership" and "setting the right tone".
, national correspondent for The Atlantic, panned the proposal. He wrote:
(CBO) did an analysis of the resolution (a less rigorous evaluation than full scoring of legislation), estimating that the Path would balance the budget by 2030 and reduce the level of debt held by the public to 10% GDP by 2050, vs. 62% in 2010. The Path assumes revenue collection of 19% GDP after 2022, up from the current 15% GDP and closer to the historical average of 18.3% GDP. A grouping of spending categories called "Other Mandatory and Defense and Non-Defense Discretionary spending" would be reduced from 12% GDP in 2010 to 3.5% by 2050.
The CBO also analyzed the Medicare aspects of the resolution, reporting that: "Under the proposal, most beneficiaries who receive premium support payments would pay more for their healthcare than if they participated in traditional Medicare under either of CBO's long-term scenarios. CBO estimated that, in 2030, a typical 65-year old would pay 68 percent of the benchmark under the proposal, compared with 25 percent under the extended-baseline scenario and 30 percent under the alternative fiscal scenario." The benchmark refers to the estimated cost of a private health insurance plan with a benefit package comparable to Medicare. The additional cost was because both administrative costs (including profits) and payment rates to providers are higher under private plans. The additional cost would be partially offset by: a) incremental "utilization management" or care restrictions exerted by private providers versus Medicare; and b) enrollees facing increased cost-sharing would tend to lower utilization of services.
Republican Party (United States)
The Republican Party is one of the two major contemporary political parties in the United States, along with the Democratic Party. Founded by anti-slavery expansion activists in 1854, it is often called the GOP . The party's platform generally reflects American conservatism in the U.S...
's budget proposal for the year 2012. It competed with budget proposals
2012 United States federal budget
The 2012 United States federal budget is the United States federal budget to fund government operations for the fiscal year 2012, which is October 2011–September 2012...
outlined separately by President Barack Obama
Barack Obama
Barack Hussein Obama II is the 44th and current President of the United States. He is the first African American to hold the office. Obama previously served as a United States Senator from Illinois, from January 2005 until he resigned following his victory in the 2008 presidential election.Born in...
. and the Congressional Progressive Caucus
Congressional Progressive Caucus
The Congressional Progressive Caucus is the largest caucus within the Democratic caucus in the United States Congress with 83 declared members, and works to advance progressive issues and positions....
. The Republican proposal was formalized and passed by the House of Representatives
United States House of Representatives
The United States House of Representatives is one of the two Houses of the United States Congress, the bicameral legislature which also includes the Senate.The composition and powers of the House are established in Article One of the Constitution...
on Friday, April 15, largely along party lines. No Democrats voted in favor of the bill and only four Republicans voted against it, which created a 235 to 193 end vote total. The four Republican members of Congress who voted against the bill were Walter B. Jones, Jr., David McKinley
David McKinley
David B. McKinley is the U.S. Representative for . He is a member of the Republican Party. He is a former member of the West Virginia House of Delegates and Chairman of the West Virginia Republican Party....
, Ron Paul
Ron Paul
Ronald Ernest "Ron" Paul is an American physician, author and United States Congressman who is seeking to be the Republican Party candidate in the 2012 presidential election. Paul represents Texas's 14th congressional district, which covers an area south and southwest of Houston that includes...
and Denny Rehberg
Denny Rehberg
Dennis R. "Denny" Rehberg is the U.S. Representative for , serving since 2001. He is a member of the Republican Party.-Early life, education and career:...
. A month later, the bill died in the Senate by a vote of 57-40.
Representative Paul Ryan
Paul Ryan
Paul Ryan may refer to:* Paul Ryan , member of the U.S. House of Representatives* Paul Ryan , music agent for The Agency, former Cradle of Filth guitarist* Paul Ryan , comics artist...
, Chairman of the House Budget Committee, played a prominent public role in drafting and promoting The Path to Prosperity proposal, and it is often known as the Ryan budget, Ryan plan, Ryan proposal, etc.
The 2012 United States federal budget
2012 United States federal budget
The 2012 United States federal budget is the United States federal budget to fund government operations for the fiscal year 2012, which is October 2011–September 2012...
funds the operations of the Federal government of United States for the fiscal year 2012, which runs October 2011–September 2012.
Key features
The Republican 2012 Budget proposal, as specified to Congressional Budget OfficeCongressional Budget Office
The Congressional Budget Office is a federal agency within the legislative branch of the United States government that provides economic data to Congress....
(CBO) by Paul Ryan's staff, encompasses changes to Medicare, Medicaid, the major 2010 health care legislation, other government spending (excluding that for Social Security), and tax law.
Medicare & Medicaid reforms
- Medicare:Medicare (United States)Medicare is a social insurance program administered by the United States government, providing health insurance coverage to people who are aged 65 and over; to those who are under 65 and are permanently physically disabled or who have a congenital physical disability; or to those who meet other...
Starting in 2022, the proposal would end the current Medicare program for all Americans born after 1956 and replace it with a new program (still called Medicare) of somewhat voucher-like "premium support payment" and would increase the age of eligibility for Medicare:- Starting in 2022, the age of eligibility for Medicare would increase by two months per year until it reached 67 in 2033.
- After 2022, the current Medicare program ends for all people who have not already enrolled. People already enrolled in the current Medicare program prior to 2022 would continue to receive the program. New enrollees after 2022 would be entitled to a premium support payment to help them purchase private health insurance.
- Beneficiaries of the premium support payments would choose among competing private insurance plans operating in a newly established Medicare exchange. Plans would have to insure all eligible people who apply and would have to charge the same premiums for enrollees of the same age. The premium support payments would go directly from the government to the private insurance companies that people selected.
- The premium support payments would vary with the health status of the beneficiary. For the average 65-year-old, payment in 2022 is specified to be $8,000, which is approximately the same dollar amount as projected net federal spending per capita for 65-year-olds in traditional Medicare in that year.
- Each year, the premium support payments would increase to reflect increases in the consumer price indexConsumer price indexA consumer price index measures changes in the price level of consumer goods and services purchased by households. The CPI, in the United States is defined by the Bureau of Labor Statistics as "a measure of the average change over time in the prices paid by urban consumers for a market basket of...
(average inflation) and the fact that enrollees in Medicare tend to be less healthy and require more costly health care as they age. - The premium support payments to enrollees would also vary with the income of the beneficiary. The wealthiest 2% of enrollees would receive 30 percent of the premium support amount described above; the next 6% would receive 50 percent of the amount described above; and people in the remaining 92% the income distribution would receive the full premium support amount described above.
- Eligibility for the traditional Medicare program would not change for people who are age 55 or older by the end of 2011 or for people who receive Medicare benefits through the Disability Insurance program prior to 2022. People covered under traditional Medicare would, beginning in 2022, have the option of switching to the premium support system.
- The proposal would modify MedicaidMedicaidMedicaid is the United States health program for certain people and families with low incomes and resources. It is a means-tested program that is jointly funded by the state and federal governments, and is managed by the states. People served by Medicaid are U.S. citizens or legal permanent...
as follows:- Starting in 2013, the federal share of all Medicaid payments would be converted into block grants to be allocated to the states. The total dollar amount of the block grants would increase annually with population growth and with growth in the consumer price index (average inflation).
- Starting in 2022, Medicaid block grant payments would be reduced to exclude projected spending for acute care services for elderly Medicaid beneficiaries.
- States would have additional flexibility in designing their programs.
Repeal of 2010 health care legislation
- 2010 Health Care Legislation: The Republican proposal would make several changes to the 2010 Patient Protection and Affordable Care ActPatient Protection and Affordable Care ActThe Patient Protection and Affordable Care Act is a United States federal statute signed into law by President Barack Obama on March 23, 2010. The law is the principal health care reform legislation of the 111th United States Congress...
and the health care provisions of the Health Care and Education Reconciliation Act of 2010.- In general, key provisions of those laws that deal with insurance coverage would be repealed, including:
- Repeal the requirement that most legal U.S. residents obtain health insurance;
- Repeal the establishment of health insurance exchangeHealth insurance exchangeA health insurance exchange is a set of state-regulated and standardized health care plans in the United States, from which individuals may purchase health insurance that is eligible for Federal subsidies...
s and subsidies for some individuals and families who purchase coverage through the exchanges; - Repeal the expansion of Medicaid coverage to include most nonelderly income below 138 percent of the federal poverty level;
- Repeal penalties on certain employers if any of their workers obtain subsidized coverage through the exchanges; and
- Repeal tax credits for small employers that offer health insurance.
- The proposal would repeal the Community Living Assistance Services and Supports ActCommunity Living Assistance Services and Supports ActThe Community Living Assistance Services and Supports Act is a U.S. federal law, enacted as Title VIII of the Patient Protection and Affordable Care Act...
(CLASS Act) program for long-term care insurance, as well as a number of mandatory grant programs including funds for so-called high-risk pools, reinsurance for early retirees, and prevention and public health activities. - The proposal would repeal the provisions that created the Independent Payment Advisory BoardIndependent Payment Advisory BoardThe Independent Payment Advisory Board, or IPAB, is a fifteen-member, unelected United States Government agency created in 2010 by sections 3403 and 10320 of the Patient Protection and Affordable Care Act which has the explicit task of reducing the rate of growth in Medicare without affecting...
, which has the explicit task of reducing the rate of growth in Medicare without affecting coverage or quality. - Canceling the expanded subsidies aimed at closing the “coverage gap” in Medicare Part D, the so-called "Medicare doughnut hole." The gap is a range of spending in which many Medicare beneficiaries are financially responsible for the entire cost of prescription drugs until the expense reaches the catastrophic coverage threshold.
- In general, key provisions of those laws that deal with insurance coverage would be repealed, including:
Other healthcare reforms
- Tort ReformTort reformTort reform refers to proposed changes in common law civil justice systems that would reduce tort litigation or damages. Tort actions are civil common law claims first created in the English commonwealth system as a non-legislative means for compensating wrongs and harm done by one party to...
: Several changes would be made to laws governing medical malpractice, including putting in place limits on noneconomic and punitive damages.
Other spending cuts
The Path to Prosperity reduces other mandatory and discretionary spending from 12 percent of GDP in 2010 to about 6 percent in 2021. No proposals were specified that would generate that path. However, budget cuts would likely affect programs such as federal civilian and military retirement, the Supplemental Nutrition Assistance ProgramSupplemental Nutrition Assistance Program
The United States Supplemental Nutrition Assistance Program , historically and commonly known as the Food Stamp Program, is a federal-assistance program that provides assistance to low- and no-income people and families living in the U.S. Though the program is administered by the U.S. Department of...
, unemployment compensation, Supplemental Security Income, the refundable portion of the earned income and child tax credits, and veterans’ programs.
Revenues/taxation
The instructions given to the CBO to evaluate the proposal specified revenue of 19% GDP, which is above the current level of around 15% GDP and slightly above the 30-year historical average of 18.2% GDP. The Path states separately that income tax rates would be lowered and selected tax expenditures (e.g., deductions, exemptions and subsidies) would be eliminated.Social Security
Social SecuritySocial Security (United States)
In the United States, Social Security refers to the federal Old-Age, Survivors, and Disability Insurance program.The original Social Security Act and the current version of the Act, as amended encompass several social welfare and social insurance programs...
receives no changes in the proposal compared to the baseline. The CBO states that "spending on that program is projected to be relatively stable as a share of GDP from 2030 forward."
Reactions and debate
The proposal broadly generated negative reactions from Democrats and positive reactions from Republicans.A news analysis piece by Glenn Kessler in the Washington Post stated that the proposal "relies on dubious assertions, questionable assumptions and fishy figures". He stated that it involved unrealistic assumptions for the status quo (the alternate fiscal scenario) such as the inclusion of all the Bush-era tax cuts being extended forever and the alternative minimum tax being indexed for inflation.
Ryan appeared on the April 3rd episode of Fox News Sunday
Fox News Sunday
Fox News Sunday with Chris Wallace is a public affairs program on the Fox network, hosted by Chris Wallace and airing on Sunday mornings. The show began on April 28, 1996, which predated the launch of Fox News Channel, and usually talks about items similar to Sunday morning talk shows...
with Chris Wallace to discuss the proposal.
Minority Whip Steny Hoyer
Steny Hoyer
Steny Hamilton Hoyer is the U.S. Representative for , serving since 1981. The district includes a large swath of rural and suburban territory southeast of Washington, D.C.. He is a member of the Democratic Party....
, a Democrat from Maryland, remarked on CNBC
CNBC
CNBC is a satellite and cable television business news channel in the U.S., owned and operated by NBCUniversal. The network and its international spinoffs cover business headlines and provide live coverage of financial markets. The combined reach of CNBC and its siblings is 390 million viewers...
's Squawk Box
Squawk Box
Squawk Box is a business news television program which airs at breakfast time on the CNBC network. The program is currently co-hosted by Joe Kernen, Rebecca Quick and Andrew Ross Sorkin. Since debuting in 1995, the show has spawned a number of versions across CNBC's international channels, many of...
that the House had ignored the recommendations made by the federal deficit commission
National Commission on Fiscal Responsibility and Reform
The National Commission on Fiscal Responsibility and Reform is a Presidential Commission created in 2010 by President Barack Obama to identify "…policies to improve the fiscal situation in the medium term and to achieve fiscal sustainability over the long run."...
. Hoyer said, "This is exactly the same rhetoric, exactly the same kind of plan that was offered in 2001 and 2003, and it led to the deepest recession this country has seen; extraordinary loss of jobs and a tanking of the stock market. Very frankly, that's not a path we want to go down again."
Speaker of the House John Boehner
John Boehner
John Andrew Boehner is the 61st and current Speaker of the United States House of Representatives. A member of the Republican Party, he is the U.S. Representative from , serving since 1991...
and House Majority Leader Eric Cantor
Eric Cantor
Eric Ivan Cantor is the U.S. Representative for Virginia's 7th congressional district, serving since 2001. A member of the Republican Party, he became House Majority Leader when the 112th Congress convened on January 3, 2011...
praised Ryan's proposal. They argued that a national conversation must take place between people of all political stripes about the fiscal future. Boehner remarked, "The president is certainly entitled to disagree with our budget... but what exactly is his alternative?"
Cantor said on the April 10th episode of Fox News Sunday
Fox News Sunday
Fox News Sunday with Chris Wallace is a public affairs program on the Fox network, hosted by Chris Wallace and airing on Sunday mornings. The show began on April 28, 1996, which predated the launch of Fox News Channel, and usually talks about items similar to Sunday morning talk shows...
with Chris Wallace:
Economist Paul Krugman
Paul Krugman
Paul Robin Krugman is an American economist, professor of Economics and International Affairs at the Woodrow Wilson School of Public and International Affairs at Princeton University, Centenary Professor at the London School of Economics, and an op-ed columnist for The New York Times...
called it "ridiculous and heartless" due to a combination of income tax rate reductions (which he argued mainly benefit the wealthy) and large spending cuts that would affect the poor and middle classes. The New York Times editorial board wrote: "We are also certain that repealing [Obama's healthcare ] reform — the Republicans’ No. 1 goal — would do enormous damage to all Americans and make it even harder to wrestle down health care costs, the best way to deal with the country’s long-term fiscal crisis."
Changes to Medicare
Michael Hiltzik in the LA Times says there's no reason to believe that Ryan's proposals will do anything to reduce healthcare costs in the U.S., and reason to believe they would do the opposite. Starting in 2022, the Republican proposal would extinguish Medicare as a guaranteed coverage program for new enrollees and would replace the program with healthcare vouchers, allowing seniors to buy private health insurance with a government subsidy.According to Henry Aaron, one of two economists who coined the term "premium support" in response to criticisms of health care vouchers, states that the Republican plan for Medicare uses vouchers, not “premium support”. The defining attribute of the plans that Aaron christened “premium support” was that governmental financial support would rise with average health care costs. The Republican plan instead, has this support rising with the consumer price index
Consumer price index
A consumer price index measures changes in the price level of consumer goods and services purchased by households. The CPI, in the United States is defined by the Bureau of Labor Statistics as "a measure of the average change over time in the prices paid by urban consumers for a market basket of...
(general inflation). This difference is crucial to understanding the Republican proposal—the cost of health care is rising much faster than the consumer price index. The Republican voucher plan is virtually guaranteed to become increasingly inadequate over time. Beneficiaries will need to pay for the increases in health care costs due to inflation –- that how the Republican plan saves money.
The vouchers would rise in value with the consumer price index (general inflation), but as medical expenses have been rising much faster than the consumer price index, the value of the government subsidy would erode over time. When the program begins in 2022, the typical 65-year old would be responsible for about 25% of the cost of their healthcare, which is consistent with Medicare as it exists today. However, the share paid out-of-pocket by this typical 65-year-old in 2030 would be 68% under the Republican plan, according to the bipartisan Congressional Budget Office.
Chairman Paul Ryan claims that his new Medicare plan was modeled after the health care plans that Congressmen themselves currently receive. Others point out that Members of Congress have what is called a "fair-share deal"; they do not bear the entire risk of increased costs due to health care inflation. The health care plan that Members of Congress use, indexes benefits to health care inflation, not to the consumer price index. As health care become more expensive due to inflation, the government, not Members of Congress is responsible for most of the extra costs.
Chairman of the Senate Budget Committee Kent Conrad
Kent Conrad
Kent Conrad is the senior United States Senator from North Dakota. He is a member of the North Dakota Democratic-NPL Party, the North Dakota affiliate of the Democratic Party...
, a Democrat from North Dakota
North Dakota
North Dakota is a state located in the Midwestern region of the United States of America, along the Canadian border. The state is bordered by Canada to the north, Minnesota to the east, South Dakota to the south and Montana to the west. North Dakota is the 19th-largest state by area in the U.S....
, told NPR's Morning Edition that the reductions in Medicare spending would be "draconian". He also faulted the effort for not including cuts to defense spending and tax increases, which Hoyer argued must be part of any serious budgetary reform.
Democratic Representative Debbie Wasserman-Schultz, incoming chair of the Democratic National Committee
Democratic National Committee
The Democratic National Committee is the principal organization governing the United States Democratic Party on a day to day basis. While it is responsible for overseeing the process of writing a platform every four years, the DNC's central focus is on campaign and political activity in support...
, stated that "This plan would literally be a death trap for seniors".
Several presumptive Republican Presidential candidates made statements in support of the proposal. Former Minnesota
Minnesota
Minnesota is a U.S. state located in the Midwestern United States. The twelfth largest state of the U.S., it is the twenty-first most populous, with 5.3 million residents. Minnesota was carved out of the eastern half of the Minnesota Territory and admitted to the Union as the thirty-second state...
Gov. Tim Pawlenty
Tim Pawlenty
Timothy James "Tim" Pawlenty , also known affectionately among supporters as T-Paw, is an American politician who served as the 39th Governor of Minnesota . He was a Republican candidate for President of the United States in the 2012 election from May to August 2011...
and former Massachusetts
Massachusetts
The Commonwealth of Massachusetts is a state in the New England region of the northeastern United States of America. It is bordered by Rhode Island and Connecticut to the south, New York to the west, and Vermont and New Hampshire to the north; at its east lies the Atlantic Ocean. As of the 2010...
Gov. Mitt Romney
Mitt Romney
Willard Mitt Romney is an American businessman and politician. He was the 70th Governor of Massachusetts from 2003 to 2007 and is a candidate for the 2012 Republican Party presidential nomination.The son of George W...
applauded the effort for "offering real leadership" and "setting the right tone".
Additional Medicare Costs
The Center for Economic and Policy Research (www.cepr.net) has released a study, based largely on CBO calculations, suggesting that the Ryan Plan will add trillions of dollars to the cost of Medicare due to the lower efficiency of private insurance as compared to the current Government program(http://www.cepr.net/documents/publications/ryan-waste-2011-04.pdf).Changes to tax law
James FallowsJames Fallows
James Fallows is an American print and radio journalist. He has been a national correspondent for The Atlantic Monthly for many years. His work has also appeared in Slate, The New York Times Magazine, The New York Review of Books, The New Yorker and The American Prospect, among others. He is a...
, national correspondent for The Atlantic, panned the proposal. He wrote:
CBO review
The Congressional Budget OfficeCongressional Budget Office
The Congressional Budget Office is a federal agency within the legislative branch of the United States government that provides economic data to Congress....
(CBO) did an analysis of the resolution (a less rigorous evaluation than full scoring of legislation), estimating that the Path would balance the budget by 2030 and reduce the level of debt held by the public to 10% GDP by 2050, vs. 62% in 2010. The Path assumes revenue collection of 19% GDP after 2022, up from the current 15% GDP and closer to the historical average of 18.3% GDP. A grouping of spending categories called "Other Mandatory and Defense and Non-Defense Discretionary spending" would be reduced from 12% GDP in 2010 to 3.5% by 2050.
The CBO also analyzed the Medicare aspects of the resolution, reporting that: "Under the proposal, most beneficiaries who receive premium support payments would pay more for their healthcare than if they participated in traditional Medicare under either of CBO's long-term scenarios. CBO estimated that, in 2030, a typical 65-year old would pay 68 percent of the benchmark under the proposal, compared with 25 percent under the extended-baseline scenario and 30 percent under the alternative fiscal scenario." The benchmark refers to the estimated cost of a private health insurance plan with a benefit package comparable to Medicare. The additional cost was because both administrative costs (including profits) and payment rates to providers are higher under private plans. The additional cost would be partially offset by: a) incremental "utilization management" or care restrictions exerted by private providers versus Medicare; and b) enrollees facing increased cost-sharing would tend to lower utilization of services.