By Bernie Becker and Erik Wasson - 06/17/11 12:00 AM EDT
Rep. Paul Ryan (R-Wis.) said Thursday that he is open to reforming Medicare in a way that would leave a traditional fee-for-service system as an option for future seniors.
Ryan, speaking at a policy discussion hosted by The Hill and sponsored by No American Debt, an advocacy group, said that he has consistently been open to an optional version of his controversial Medicare plan, which Democrats have seized upon as a campaign issue.
“They are all good ideas,” Ryan said.
Such an option-based reform could eventually emerge as a compromise way to prevent Medicare’s bankruptcy, which the entitlement program’s trustees estimate will occur in 13 years.
In response to Ryan’s comments at The Hill’s event, a spokesman for House Minority Leader Nancy Pelosi (D-Calif.) ripped Republicans.
“Republicans are not fooling anyone. They voted to end Medicare and now they can’t take the heat,” Pelosi spokesman Nadeam Elshami said. “The only plan Americans want is called Medicare and we must strengthen it, not weaken it. What you’re hearing now is a lead balloon crashing to the ground.”
Perhaps not surprisingly, Ryan’s House-passed budget — and the response to it — was a major topic at Thursday’s policy discussion. The congressman also expressed cautious optimism that the meetings Vice President Biden is leading to find a deal to raise the $14.3 trillion debt ceiling would be successful.
In addition to Medicare, the Wisconsin Republican discussed his budget’s plan on tax reform, saying that the current code was standing in the way of economic growth because it sowed uncertainty in the business community.
With that in mind, Ryan came out strongly against making further short-term changes to the payroll tax, an idea the White House is considering to spark the sluggish economy.
In the aftermath of a string of disappointing economic reports, administration officials in the Biden talks have discussed extending a payroll tax holiday for workers included in last year’s tax-cut compromise and giving similar relief to employers.
“I’m not a Keynesian, so I don’t think sugar-high economics works,” the Budget chairman said. “We’ve sort of proven this already, a number of times. Temporary tax rebates don’t work to create economic growth. Permanent tax changes do.”
The House budget proposes revamping the tax code by shaving both the top individual and corporate tax rates to 25 percent, down from their current 35. It also calls for eliminating tax credits and deductions, and Ryan reiterated Thursday that he would rather see tax breaks scrapped for that reason than for deficit-reduction.
“We’re not going to raise taxes,” he said.
Rep. Dave Camp (R-Mich.), the chairman of the House Ways and Means Committee, is holding a string of hearings on tax reform, and Ryan said Thursday that he was satisfied with the pace of discussions on the issue.
But Ryan was critical of the Democratic-controlled Senate, which has not passed a budget in more than two years, for holding up progress on the issue.
Because there is no Senate budget, the congressman said, “that makes it really difficult to do a tax bill. There’s no reconciliation. There’s no budget process.
“Unfortunately, on the other side of the Rotunda, they’ve just stopped the entire process,” he said.
Democrats, as Ryan also noted, have criticized his Medicare proposal as a voucher system, and called those attacks key to their capture last month of a previously GOP-held House seat in New York.
The House budget sets out a plan whereby Medicare would be replaced by private insurance plans, partially subsidized by the government, for people younger than 55.
Former Gov. Tim Pawlenty of Minnesota, currently running for the GOP nomination for president, has backed the idea of making the Ryan plan an option — an idea also supported by Alice Rivlin, a budget director under President Clinton.
But Ryan signaled Thursday that he had gotten a far less substantive response from Democratic leaders in Congress.
“I expected the demagoguery, but I expected some responsible leaders in the other party to do something,” he said.
Republicans, Ryan added, had to take part of the blame for the loss of the special House election in New York because they had stumbled in their explanation of his budget plan.
“It wasn’t responded to in an effective and timely manner,” he said, declaring Republicans will be fine at the polls once the party commits to fully explaining the proposal and why it is needed.
Still, the AARP announced on Thursday it was launching a multimillion-dollar television advertising campaign to urge Congress not to cut Medicare or Social Security.
In a further sign of how controversial the Ryan plan remains, George Pataki, the former Republican governor of New York and No American Debt founder, could not quite bring himself to fully embrace Ryan’s Medicare solution at Thursday’s event.
“I do have some questions on that. It is something you have to take a look at,” Pataki said. “You don’t have to buy into every single point of every single plan.”