Wednesday, March 21, 2012

You cannot serve God and Ayn Rand - and Christians should decry Mr. Ryan's budget

Rep. Paul Ryan (R-WI), the Chair of the House Budget Committee, released a budget yesterday.

Budgets reflect the publisher's values. I don't specialize in budget analysis, but President Obama's first budget was one of the best I've followed (in overview, at least). It expanded assistance for the poor. It curtailed tax breaks that disproportionately benefited higher-income folks. That budget reflected good values. One could criticize its technical or political practicality. But it reflected good values. It reflected values that Christians can generally agree on.

Paul Ryan's budget does not reflect good values. I do not typically vet people for how compatible their budgets are with Christian values. But Mr. Ryan's budget does not, in my opinion, reflect values that are compatible with Jesus'.

The Budget
Mr. Ryan's budget would make large and severe cuts to most areas of government. Lay readers may think that there's a lot of waste in government - and they'd be right, just as there is waste in any large organization. But the U.S. government is essentially a large insurance conglomerate, protected by a large standing army. Its main insurance lines are health (Medicare, Medicaid) and income annuities (Social Security). It has a charitable foundation (Food Stamps, Temporary Aid to Needy Families, Earned Income Tax Credit - these all are subsets of 'other' below). And it runs miscellaneous stuff - unlike an insurance conglomerate, it tries to do things like make sure your houses are up to code (HUD), regulate the environment (EPA), other things like that. Hat tip to Ezra Klein for the chart below, and for the description.

Mr. Ryan's budget makes large and indiscriminate cuts to most government programs. He exempts the military. He lowers taxes on the wealthy. By a lot.

The nonpartisan Congressional Budget Office projected how much the nation would spend on Medicaid, the Children's Health Insurance Program and insurance subsidies for workers under health reform under present law, and under Mr. Ryan's proposal. Medicaid and CHIP insure low-income folks.

Basically, Mr. Ryan's budget says that he would have the poor pay for his tax cuts and to maintain military spending. He would cap the Federal subsidies for Medicaid and CHIP at inflation - but medical costs have grown at 2 percentage points above GDP growth in the past, and GDP typically grows faster than inflation. It's likely that medical cost growth will slow a little in the future, but most likely not below GDP + 1.5 percent without additional government action. Mr. Ryan's actions on Medicare are less troubling than last year's budget. However, his proposal would likely weaken the program.  Medicare costs too much, it is true. But that is solely because medical care in the U.S. costs too much. Seniors and the disabled, who are Medicare's beneficiaries, have very high medical utilization. This should not be mistaken for waste, because commercial insurers too must deal with waste, fraud and abuse.  Mr. Ryan's would also harm many other important government programs, like education, social services and infrastructure spending.

He says that his budget will strengthen the safety net. Mathematically, this doesn't hold - the government would be forced to cut the money going to the safety net. That will weaken it.

I can specifically critique the aspects of his budget that deal with Medicaid. Mr. Ryan claims that allowing the states to run Medicaid will make it more efficient. In his world, Federal restrictions prevent states from organizing their systems more efficiently. He is completely and totally wrong. Medicaid covers poor women and children, it covers the disabled, and it covers seniors. For the latter two, it pays for long-term care services, which are personal care services like having someone come to help bathe and dress you, or paying for assisted living or a nursing home stay. In all cases, Medicaid covers health care services, unless the beneficiary is already covered by Medicare, in which case Medicaid will merely cover the copays and deductibles. The women and kids are actually fairly cheap to begin with. The seniors and disabled folks are very, very expensive. Even if they're eligible for Medicare, they're expensive to Medicaid because they need long-term care and sometimes mental health services that Medicare doesn't cover.

Long-term care services in nursing homes cost an average of about $60,000 a year to Medicaid, and probably a quarter of that for home-based care. Assertive Community Treatment, for mental illness, probably costs $9,000 to $12,000. Medical care would average upwards of $10,000 for disabled beneficiaries. All those numbers are per person. The numbers for medical care and institutions go up faster than inflation. In contrast, the average cost of medical care for an average family of four, two working adults and two kids, was about $19,400 in 2011. That's a bit less than $5,000 a person. 

There is no magic bullet that will make the cost of care for Medicaid beneficiaries go down. And yet if you ask Mr. Ryan, if you ask the people at the conservative Heritage Foundation or the National Center for Policy Analysis, or any of the conservative politicians, states and/or the private sector could somehow magically make do with less. A lot less. If you ask these so-called thinkers how exactly they would reform Medicaid, exactly how they would change the delivery and financing systems, they won't tell you because they can't, and they can't tell you because either they are lying or they have no clue about how health care works on the ground.

Mr. Ryan has cited the deficit as a national threat. In the long run, it certainly is. And yet, one could make the argument that his budget will force the poor to pay to reduce the deficit. 

I say, 'one could make the argument', because it is not clear how much his plan will actually reduce the deficit. Right now, Federal taxes are about 15 percent of our Gross Domestic Product, which is all that our economy produces. Because our population is aging, taxes will have to rise to maintain Medicare, probably to 22 to 23 percent of GDP. Mr. Ryan asked the CBO to assume that his plan would raise taxes to 19 percent of GDP. However, a tax plan with the outlines he proposed would collect around 16 percent of GDP in taxes. He still has a big hole to fill, then. He'd have to find $700 billion in 2012 revenues to fill the gap, and while he's said he'd close tax loopholes, he's not said which ones. Now, I would argue that we should gradually close the tax preferences for employer sponsored health insurance, for 401(k) retirement plans, and for mortgages. Closing them all tonight would probably do it for his plan. But he does not propose to do so, and closing those preferences immediately would be very disruptive to the economy. Mr. Ryan's budget assumptions, then, are unrealistic.

The Values
Mr. Ryan is not an overt Christian. Nonetheless, some conservative Christians who have flocked to him. Like this guy. And these guys.

Mr. Ryan is a devout disciple of Ayn Rand (pronounced Ann). Rand's seminal work, Atlas Shrugged, exalts selfishness. It exhorts the rich, allegedly the creative class, to take their money and run, and let society suffer. Rand herself scorned the poor as parasites, and she scorned compassion for the poor as weakness.

Ms. Rand also scorned Christianity and Christians. I actually don't care what Mr. Ryan and Ms. Rand think or thought of Christians. But the fact is that Mr. Ryan's Rand-inspired budget would cause significant harm to the most vulnerable among us. It would even cause significant harm to the middle class, who rely on Medicare to protect them from medical expenses and on Social Security as a significant part of their retirement benefits. I don't like to cast things in Manichean terms, but time and time again, Mr. Ryan has written budgets that would harm the poor, and he has advocated for policies that would harm them. He has advocated for budgets and policies that would direct wealth towards those who are already wealthy.

Mr. Ryan's budget, which the Republicans in the U.S. Congress have rallied around, is completely inconsistent with Christian values. Christians should oppose his budget unconditionally. Many of the Republicans above consider themselves to be devout Christians. They should be advised: fiscal prudence is a virtue, but so is care for the poor. It's not actually all that certain how fiscally prudent Mr. Ryan's budget is, and it is certain that it will harm the poor. Support Mr. Ryan and Ms. Rand, or call yourself a Christian - but not both.

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