POLITICS

Romney, Ryan must be careful with Medicare rhetoric

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Politics,Philip Klein,Campaign 2012,Politics Digest

Now that Mitt Romney has tapped House Budget Committee Chairman Paul Ryan, R-Wis., as his running mate, Medicare has re-emerged as a leading issue of the 2012 campaign. Republicans must handle this issue with care, because this fall's campaign could represent the last and best chance to make the case for reforming the program and putting America on a sustainable fiscal path.

Though the deficit is projected to exceed $1.1 trillion this year, the real fiscal challenge facing the United States is in the long run. As the U.S. proved during World War II, the nation can rack up huge amounts of debt for a short period of time and eventually pay it off. The difference now is that even if the weak economy recovers in the coming years, the U.S. is slated to run large and growing deficits as far as government bean counters can project. Within 12 years, U.S. public debt is expected to exceed the entire net output of the economy, according to the Congressional Budget Office.

A leading driver of this debt problem is Medicare, which covers about 50 million elderly and disabled Americans. As baby boomers retire, longer life expectancy and rising health care costs will make the program an ever-larger burden on taxpayers. Medicare faces a long-term deficit of $43 trillion, according to its trustees.

For his attempts to reform Medicare, Ryan had already been targeted by Democrats and President Obama for wanting to end the program, and this line of attack has now gained new life. But the reality is that the most recent Ryan proposal builds on a bipartisan plan he worked out with Sen. Ron Wyden, D-Ore., last year. The latest version preserves the current Medicare system for those 55 and over, then gives everyone else the option of remaining in it. If they choose not to, they can take the money the government would have spent on them and choose among private plans. Payments to beneficiaries, known as "premium support," would adjust so that poorer and sicker beneficiaries receive a higher subsidy than wealthier, healthier ones.

Ryan has argued that choice and competition can drive down Medicare's costs, saving the government money and preserving the program for future generations. Romney has embraced the general principles of Ryan's approach, though not all the details.

Obama has proposed $250 billion in Medicare cuts as part of a deficit-reduction proposal, but he has yet to produce a plan that addresses the long-term problem. As U.S. Treasury Secretary Tim Geithner conceded to Ryan during testimony before his committee in February, "We're not coming before you to say we have a definitive solution to our long-term problem. What we do know is we don't like yours."

In the past several days, Romney has attempted to turn the tables on Obama by noting that his own national health care law -- Obamacare -- cut Medicare significantly.

It's true that Obamacare also cut Medicare by $700 billion. But while it's tempting to attack Obama on this point, the danger is that it could turn the race into a finger-pointing match about who wants to cut Medicare more. This would reinforce the third-rail status of a program that's desperately in need of an overhaul.

In 2010, back when Republicans were highlighting Obama's Medicare cuts during the midterm elections, Ryan acknowledged, "We have to be careful about how we use our rhetoric so we don't dig ourselves into an unsustainable fiscal path."

The clear difference between Obama's and Ryan's approaches is that Obama would use the savings from Medicare cuts to pay for an entirely separate $1.7 trillion health care entitlement. Ryan, on the other hand, would use the savings to rescue Medicare and put it on a sustainable fiscal path. Obama's law creates a new bureaucracy of 15 unelected officials to dictate how money should be spent, whereas Ryan's proposal is aimed at giving seniors more control over those dollars.

Republicans may benefit from highlighting Obama's cuts to Medicare. But if they do it the wrong way, they could handcuff themselves when it comes time to change Medicare.

pklein@washingtonexaminer.com

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