New York Times Op-Ed Columnist

Guide for the Perplexed
Published: August 20, 2012
Let’s say you’re generally a moderate voter. You look at the Romney-Ryan
ticket and see that they are much more conservative than you. They don’t
believe in tax increases ever. You think tax increases have to be a part
of a budget deal. They want to slash social spending to the bone. You
think that would be harsh on the vulnerable and bad for social cohesion.
You look at the Obama-Biden ticket. You like them personally. But you’re
not sure what they want to achieve over the next four years. The country
needs big changes, and they don’t seem to be offering many. Where’s the
In this disaffected frame of mind, you ask yourself: What really matters
in this election? Well, the big issue is national decline. How can we
ensure that the U.S. is as dynamic in the 21st century as it was in the
The biggest threat to national dynamism is spending money on the wrong
things. If you go back and look at the federal budgets during the
mid-20th century, you see that they spent money on the future – on
programs like NASA, infrastructure projects, child welfare, research and
technology. Today, we spend most of our money on the present – on tax
loopholes and health care for people over 65.
A study by Jessica Perez and others at the group Third Way lays out the
basic facts. In 1962, 14 cents of every federal dollar not going to
interest payments were spent on entitlement programs. Today, 47 percent
of every dollar is spent on entitlements. By 2030, 61 cents of every
noninterest dollar will be spent on entitlements.
Entitlement spending is crowding out spending on investments in our
children and on infrastructure. This spending is threatening national
bankruptcy. It’s increasing so quickly that there is no tax increase
imaginable that could conceivably cover it. And, these days, the real
entitlement problem is Medicare.
So when you think about the election this way, the crucial question is:
Which candidate can slow the explosion of entitlement spending so we can devote more resources toward our future?

Looking at the candidates through this prism, you see that President
Obama deserves some credit for taking on entitlement spending. He had
the courage to chop roughly $700 billion out of Medicare reimbursements.
He had the courage to put some Medicare eligibility reforms on the table
in his negotiations with Republicans. He created that (highly
circumscribed) board of technocrats who might wring some efficiencies
out of the system.
Still, you wouldn’t call Obama a passionate reformer. He’s trimmed on
the edges of entitlements. He’s not done anything that might
fundamentally alter their ruinous course.
When you look at Mitt Romney through this prism, you see surprising
passion. By picking Paul Ryan as his running mate, Romney has put
Medicare at the center of the national debate. Possibly for the first
time, he has done something politically perilous. He has made it clear
that restructuring Medicare will be a high priority.
This is impressive. If you believe entitlement reform is essential for
national solvency, then Romney-Ryan is the only train leaving the
Moreover, when you look at the Medicare reform package Romney and Ryan
have proposed, you find yourself a little surprised. You think of them
of as free-market purists, but this proposal features heavy government
activism, flexibility and rampant pragmatism.
The federal government would define a package of mandatory health
benefits. Private insurers and an agency akin to the current public
Medicare system would submit bids to provide coverage for those
benefits. The government would give senior citizens a payment equal to
the second lowest bid in each region to buy insurance.
This system would provide a basic health safety net. It would also
unleash a process of discovery. If the current Medicare structure proves
most efficient, then it would dominate the market. If private insurers
proved more efficient, they would dominate. Either way, we would find
the best way to control Medicare costs. Either way, the burden for
paying for basic health care would fall on the government, not on older
Americans. (Much of the Democratic criticism on this point is based on
an earlier, obsolete version of the proposal.)
You’re still deeply uncomfortable with many other Romney-Ryan proposals.
But first things first. The priority in this election is to get a leader
who can get Medicare costs under control. Then we can argue about
everything else. Right now, Romney’s more likely to do this.
All of which causes you to look over to the Democrats and wonder: Why
don’t they have an alternative? Silently, a voice in your head is
pleading with them: Put up or shut up.
If Democrats can’t come up with an alternative on this most crucial
issue, how can they promise to lead a dynamic growing nation?


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