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No, Pigs Can't Fly 

The Republican budget just doesn't add up

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First, might we stop congratulating Congressman Paul Ryan for “at least putting forward a plan”? The United States Constitution directs the legislative process only in the single prescription in Article I, Section 7. It reads: “All Bills for raising Revenue shall originate in the House of Representatives. The Senate may propose or concur with Amendments as on other Bills.” In other words, Congressman Ryan, as the new chair of the House Budget Committee, was just doing his job.

As for the president, Republicans are criticizing him for not leading on these issues. Turn your text to Article II, Section 3: “He [the President] shall from time to time give to the Congress Information of the State of the Union, and recommend to their Consideration such Measures as he shall judge necessary and expedient.” Obama delivered this State of the Union message back on Jan. 25. He outlined his budget, which did address health care costs (short on details, to be sure) and the national debt. Unlike what Ryan refused to do, Obama also addressed defense spending and revenue needs.

In other words, the process is working its way through, as it does every year at this time.

Back to the Ryan/Republican budget, which all but four Republican House members and 40 senators supported. After losing one of the safest seats in the Congress last week, Republicans are scrambling to convince the public that pigs really can fly. But the truth is that if Ryan’s plan prevails, the next generation of Medicare recipients will effectively end up paying many times more than what they are paying today. This isn’t demagoguery, it’s arithmetic.

When I say “effectively,” I refer to the redistribution of personal resources required by the Ryan plan — seniors will need to use Social Security to pay for health costs their “vouchers” can’t cover. The first decade, half will be redirected, but over the ensuing 20 years upwards of 90 percent of Social Security benefits will need to be redirected.

Ryan relies on competition in the private health insurance market to keep costs down. And I have some swamp land to sell him! The very idea that we’ll ever see serious competition among the private insurers flies in the face of all evidence to the contrary. As I have noted in a previous column, my rates just went up recently while inflation was nonexistent and despite the fact that we have a state regulating body.

If Congressman Ryan (and, yes, our own Congresswoman Cathy McMorris Rodgers) gets his way, two pressures will combine to obviate any cost control through competition promised by Ryan. Think of it as the kind of weather pattern that produces tornadoes, only this time it will be lack of competition in the insurance markets and the weakening of unions who can demand decent coverage.

The simple truth is, rhetoric aside, corporate America hates competition. Consider the evidence: The big airlines fought against Jimmy Carter’s airline deregulation efforts; mergers and acquisitions continue to reduce competition in the telecommunications sector; and then there is collusion, profit-taking and price-fixing in the world of commodities like oil.

Against this self-serving and predictable inertia, we pit our big but woefully weak government.

Regulators are typically timid, often compromised, and over time the regulated usually become the regulators. Take, for example, the late and not great Minerals Management Service, which, as we discovered, was much more about facilitation than about regulation. They weren’t regulating British Petroleum’s rigs in the Gulf of Mexico so much as they were clearing away obstacles that might slow them down. In the MMS the skids were often greased through the cozy relationships between the industry and the regulators.

The old revolving door — today the regulator, tomorrow on the payroll of the regulated. Consider Meredith Baker, former FCC commissioner, who shows up as a Comcast lobbyist only four months after voting to give Comcast the green light to acquire control of NBC Universal from General Electric and merge the broadcast network and other assets into the cable company.

When all is said and done, the only chance the public has to survive in this rigged game is through strength of numbers. Federal civil servants, of all public sector unions, get a good deal just that way — there are a lot of them out there. But at the same time that Ryan and McMorris Rodgers and the entire Republican Party are working around the clock to do in Medicare as we know it (no, pigs can’t fly), they are also working just as hard on destroying every union in America, public and private. Without unions, where is the strength in numbers? Answer: There will be no strength in numbers. This means that protection of the public interest shifts directly to our largely bought-and-paid-for Congress. The reality is, Ryan’s claims to the contrary, individuals acting alone have no clout.

And consider another irony: The Ryan/ Republican Medicare reforms (as was the case with the Republican-led spending deal last spring) are predicted actually to have an inverse impact on overall medical costs. We likely will end up spending more on health care. On paper, the government may come out looking better, but the country will be far worse off. And we haven’t begun to address those 2.1 million jobs estimated by the Economic Policy Institute to be lost should the Ryan budget ever see the light of day.

I don’t believe Adam Smith had this in mind.

Remember, he didn’t write about the wealth of individuals; rather, he preached the need for the wealth of nations.

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