Monday, August 13, 2012

Wyden and Ryan—One is Up and the Other is Down—and They Are Both Telling the Truth

Republican Vice Presidential pick Paul Ryan isn’t the only one Democrats are piling on this week. The knives have come out for Senator Ron Wyden, the Oregon Democrat.

I guess that isn’t a surprise. If Ron Wyden is right on Medicare then so are Paul Ryan and Mitt Romney.

The fundamental problem here is that the Democrats have decided that their best path to victory in the November elections is to say that the Republicans want to destroy Medicare as we know it and that the Democrats can preserve it.

The truth is that no one can preserve Medicare as we know it. There isn’t a prayer that your father’s Medicare will be around in 10 years. There is a legitimate policy debate going on about the direction we will have to go with it.

There is just plain going to be less money to spend on senior health care than there would have been if we let the program continue on its present unsustainable track. Health care providers and patients are going to have less money.

The question is who will control that money?

Conservatives generally want consumers to be in the driver’s seat—give seniors a defined contribution and let them decide on which health plan, and on which health plan’s approach to health care management, they want to spend it.

Progressives generally want to continue the defined benefit approach—guarantee everyone a benefit and use the regulatory power of government to make the dollars stretch to pay for it.

Both directions would lead to a Medicare program that looks very different than the open-ended entitlement we have today—one that because of its open-ended nature and the huge number of baby boomers about to retire will bankrupt us.

Late last year, Ron Wyden and Paul Ryan came along with a compromise—I will suggest an elegant political compromise.

First, they both agreed the current system is unsustainable—perhaps Ron Wyden’s real sin in an election-year when the party-line is that Medicare as we know it can be preserved and Republicans need to be defeated because they will kill it as we know it.

Then they found a way to craft a plan that took key elements from both the Democrat’s defined benefit and the Republican's defined contribution philosophy. For the details, see my post, Paul Ryan and Ron Wyden Blow the Medicare Reform Debate Wide Open!

At a time most Americans are upset that Republicans and Democrats can’t find a way to solve the big problems we face, Wyden and Ryan did just that on Medicare—they found a way to preserve the defined benefit baseline Medicare entitlement Democrats are insisting on while giving Republicans the consumer-centered defined contribution approach they want.

It was really elegant policy. But also inconvenient policy because Democrats had already decided they were going to make this election about their preserving Medicare while charging Republicans want to kill it.

So, with Ryan now the apparent Republican Vice Presidential nominee, the imperative to target Ryan’s approach to Medicare reform becomes all the better target and with him Wyden. Because if Wyden is right then the Democrats are wrong—or worse not telling the truth about Medicare.

That may be a necessary political strategy for Democrats during this election season, but my money is still on Wyden.

After November comes January.

My bet is that there are likely only two outcomes come January:
  1. Romney wins the White House and with it the Republicans capture the Senate and hold the House. In this case, the Wyden-Ryan Medicare reform proposal will be on top of the new administration’s agenda and Ron Wyden will be in the catbird seat. Republicans saw what happened to Democrats when they passed health care reform without a single Republican supporter. Republicans will be willing to round a lot of edges to keep Wyden on board and perhaps get a couple more Democrats.
  2. Obama wins but the Republicans take the Senate and keep the House. While a Republican victory in the Senate isn’t a certainty, the odds look a lot better than not. Now, either Republicans and Democrats compromise on the key issues or the political gridlock, and financial uncertainty that accompanies it, continues doing lots of damage to the economy. How will both sides eventually compromise over the key Medicare issue? There is only one path to Medicare compromise on the table—Wyden-Ryan.
Ron Wyden’s solo effort to actually find common ground and fix things now puts him in a very lonely and uncomfortable spot—until about the first Wednesday in November.

Maybe actually trying to be bipartisan and telling the truth will have a payoff after all.
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