Reform Conservatism, Part 2: getting a grip on health entitlements
In his second column on "Reform Conservatism," columnist Michael Gerson writes: Either health entitlements, particularly Medicare, are substantially reformed, or their cost will consume every other purpose of government.
WASHINGTON — In a recent column, I described two forms of conservatism that coalesced in opposition to President Obama's polarizing expansion in the size and role of government.
Rejectionist Conservatism, which comes in tea-party and libertarian variants, would use current political controversies to fundamentally reorder the role of the federal government. At least in theory, it would repeal not just Obamaism, but also the Great Society, the New Deal and much else in pursuit of a minimal state.
Reform conservatism, in contrast, would seek to achieve federal goals in modern, market-oriented ways. It is less concerned about re-founding the country than making Medicare work. Its chief practitioner is Rep. Paul Ryan, supported by a few policy experts of disproportionate creativity and influence.
In my initial description, I called Rejectionist Conservatism more "ambitious" — which is only true in the abstract. Some tea-party rejectionists have opposed the Ryan budgets because they would not achieve quick balance — a symbolic display of ideological ambition. Yet during the recent presidential primaries, Michele Bachmann distanced herself from Ryan's Medicare proposal. Ron Paul was weaker on entitlement reform than anyone else in the Republican field. It is far easier to endorse the theoretical abolition of government programs than to embrace specific reforms involving actual political risk.
Ryan's seriousness has attracted support from both House Speaker John Boehner and presidential candidate Mitt Romney. It has also made Ryan the main target of unreconstructed liberalism, which is determined to deny any distinction between the House budget and a tea-party manifesto.
Ryan's expression of Reform Conservatism has both virtues and vulnerabilities. It deals seriously with the fiscal crisis — which, driven by demographics and cost increases, is a health-entitlement crisis. For 40 years, federal, non-health-related spending has been relatively stable as a percentage of the economy. During the same period, federal health spending has increased as a share of the economy by more than five times and will double again by 2050. No realistic amount of tax increases or discretionary spending cuts can cover this expanding national commitment. Either health entitlements, particularly Medicare, are substantially reformed, or their cost will consume every other purpose of government.
Ryan proposes moving toward a premium support system in Medicare in which seniors could choose a private plan or current Medicare. Competition would put downward pressure on costs. Poorer and sicker seniors would get extra help. Middle- and upper-income seniors, over time, would pay more out-of-pocket. It would be a difficult but orderly transition to a more market-oriented, means-tested system.
Ryan's Reform Conservatism is more vulnerable to criticism on the way it deals with long-term economic growth. It would lift some tax burdens on the economy, but it probably underestimates the challenge of globalization and does not specify the measures necessary to increase American competitiveness.
And Ryan's approach is least impressive in confronting America's main social problem — a lack of social capital and economic mobility at the bottom of the income scale. There are a variety of good conservative ideas to encourage teacher quality, savings and wealth building, financial literacy, good parenting skills, and high-school and college completion. They are not even a peripheral part of the Ryan agenda, which is dominated by addressing the fiscal crisis.
When it comes to the budget, there are plenty of uncomfortable ideological truths to go around. It is a fact that the historical portion of the economy taken in taxes by the federal government — around 18 percent since World War II — will not be sufficient in the future. Even reformed federal health commitments — along with national defense, the normal workings of government, and the promotion of competitiveness and economic mobility — will require more revenue.
But it is also a fact that entitlement reform is the prerequisite to any non-terrifying economic future. For all its flaws, Ryan's Reform Conservatism takes America's largest problem seriously — while Obama does not. Obama's response to the health entitlement crisis has been the creation of a new health entitlement that, according to Medicare trustee Charles Blahous, substantially worsens the federal deficit over time. Medicare savings are supposed to emerge from a panel of 15 experts, imposing drastic cuts that are unlikely to materialize — and which, if they did, would likely cause many health providers to leave the Medicare system.
Obama has offered a ploy, and he vilifies those who offer a plan. It is a stunning act of irresponsibility — and the main reason that Reform Conservatism deserves a chance to govern.
Michael Gerson's column appears regularly on editorial pages of The Times. His email address is email@example.com