ABC News and President Obama’s Health Care Agenda
June 24 , 2009
By: Paul Ryan
Today, ABC News will devote the bulk of its key programming to President Obama’s health care agenda.
I certainly support open, bi-partisan discussion on critically needed health care reform, as our nation’s economic and budgetary future largely hinges on the outcome of this debate.
I have great concern, however, about the Administration’s direction toward government takeover of the health care sector – compounding the already unsustainable levels of entitlement spending.
As such, I would like to draw your attention to a 2007 article from ABC News, American Health Care in Critical Condition: The Case for Putting Individuals, Not Employers or Government, in Control of Health Care. I found it particularly useful in helping to weigh – and balance – the arguments favoring government-controlled health care.
I’ve introduced two bills to address our nation’s health care challenges by focusing on putting the patient in control of health care decisions — “A Roadmap for America’s Future”, and more recently, “The Patient’s Choice Act” – both of which would transform the payment structure of federal health programs, and reform the current tax subsidy for health insurance.
A Double Challenge: Debt and Entitlements
June 5 , 2009
By: Paul Ryan
”Even as we take steps to address the recession and threats to financial stability, maintaining the confidence of the financial markets requires that we, as a nation, begin planning now for the restoration of fiscal balance.”
Federal Reserve Chairman Bernanke in testimony before the House Budget Committee, 6/3/09.
This week Congress received a fresh warning on the U.S.’s increasingly dire fiscal straits. In the wake of the alarming Medicare and Social Security Trustees reports, Federal Reserve Chairman Ben Bernanke testified before the House Budget Committee regarding the twin challenge we face — restoring a more rational fiscal path and dealing with the retirement of the baby boomers – and he emphasized that we need to start our planning now. In fact, Chairman Bernanke suggested that the Medicare Trustee’s report is actually too conservative in its estimates, noting that the Trustees project 1% excess health care cost inflation, while excess health care cost inflation is actually approximately 2.5%, making the urgency of our fiscal situation that much clearer.
“I think we face a double challenge. One is that we have to restore ourselves to a more balanced fiscal path after addressing the financial and economic crises that we currently are facing. But in addition, that’s complicated by the fact that with the retirement of the Baby Boom and the increase in medical costs that we are facing, rising entitlement costs – this is no longer a long-term consideration. This is something that’s going to happen in the next five or ten years.”
- Chairman Bernanke, 6/3/09.
Our Fiscal Path
If we do not reduce our debt and deficits, we will see ever increasing costs to borrowing, causing our debt to spiral out of control.
“At some point, you have to have a path of spending and taxes that will give you a stabilization of the debt-to- GDP ratio. If you don’t, then I fear that the debt will continue to rise, making it very difficult to finance it.”
- Chairman Bernanke, 6/3/09.
“Prompt attention to questions of fiscal sustainability is particularly critical because of the coming budgetary and economic challenges associated with the retirement of the baby-boom generation and continued increases in medical costs.”
- Chairman Bernanke, 6/3/09.
Chairman Bernanke’s statement reaffirms the urgency of comprehensive entitlement reform. Despite consensus that the status quo is unacceptable, “ A Roadmap for America’s Future ” remains the only proposal that directly tackles this crisis. Without reform of Medicare, Medicaid or Social Security, we are consigning future generations to lower standards of living. My plan would:
Fulfill the mission of health and retirement security – making Medicare, Medicaid and Social Security permanently solvent.
- Lift the crushing debt burden we are leaving for our children. Without reform, these programs will necessitate ever higher borrowing, or confiscatory tax rates. Reform is no longer an option, it is a necessity.
We must address runaway health care inflation and population aging. These issues are not going away, and as Chairman Bernanke has so astutely highlighted, they will pose difficult fiscal challenges in the years ahead.
See additional highlights from Chairman Bernanke’s testimony here.
$63 Trillion and Rising
May 1 , 2009
By: Paul Ryan
Yesterday, the Government Accountability Office (GAO) released its update on the Nation’s Long-Term Fiscal Outlook (http://www.gao.gov/new.items/d09405sp.pdf). Under a current policy scenario, GAO estimates that the government has unfunded obligations of $62.9 trillion.
This is the first government report that has been issued to show the updated long-term outlook since the financial crisis erupted last September. According to GAO, the forecast has darkened considerably.
GAO uses two scenarios in its long-term fiscal simulations. The first assumes Congress will not alter current law – i.e. middle class tax cuts will expire, the marriage penalty comes back, child tax credits are reduced, Medicare payments to physicians are reduced by 21 percent, and nearly everyone starts paying the Alternative Minimum Tax (AMT). The second scenario – using history as a judge of what is likely to happen – assumes Congress keeps current policies in place.
Neither scenario paints a pretty picture for our nation’s long-term fiscal health. GAO estimates the fiscal gap – the amount of spending reduction or revenue increase that would be needed to keep debt as a share of GDP at or below today’s ratio – to be $33.7 trillion over the 75 year period in its extended baseline scenario and nearly $63 trillion in its alternative scenario.
GAO also concludes that by 2040, 5 percent of GDP will have to be dedicated to net interest payments. By way of example, this is more than we currently spend on Social Security – the largest Federal program.
“While the factors driving the near-term outlook can be and have been quite volatile, the long-term fundamentals have not changed. Health care costs are still growing faster than the economy and the nation’s population continues to age. GAO’s long-term simulations show that absent policy actions aimed at reforming the key drivers of our structural deficits – health spending and social security – the federal government faces unsustainable growth in debt. The longer that action to deal with the federal government’s long-term fiscal outlook is delayed, the greater the risk that the eventual changes will be disruptive and destabilizing.”
There are no surprises here. As noted in earlier blog entries (2020 Just Arrived), the current economic slowdown changes the long-term outlook by moving the risk of economic insolvency to the left on the timeline. Just as a lookout on a ship can only see a reef in the distance from the top of the mast at first, the current economic climate has made that reef visible to those standing on the deck. We need to alter course now. The longer we delay, the harder it is going to be to avoid a collision with crushing debt.
It’s Complicated: The U.S. Tax Code and How Much It Costs You
April 15 , 2009
By: Paul Ryan
For many Americans, April 15 is the most dreaded day of the year. And for good reason.
Even Ben Franklin, who conceded, “nothing can be said to be certain, except death and taxes,” would be left speechless were he to file income taxes in the U.S. today. Our tax code has evolved into a complicated and burdensome puzzle – and it’s getting worse. According to the Internal Revenue Service’s National Taxpayer Advocate, the U.S. tax code contains 3.7 million words and was altered over 500 times in 2008 alone.
I have been reading the Taxpayer Advocate’s 2008 Annual Report to Congress, which ranks the complexity of the tax code as the #1 most serious issue taxpayers face. Not only is it difficult to navigate the labyrinth of forms and reporting requirements, it can be extremely costly. The Taxpayer Advocate estimates that individuals and businesses spend 7.6 billion hours every year to comply with the tax code, which costs taxpayers an estimated $193 billion annually. This represents a staggering 14 percent of total income tax receipts.
60 percent of those who file taxes pay a tax consultant to circumvent the difficulties of this complicated patchwork. 22 percent on top of that purchase tax software. Although the Treasury Department publishes regulations that interpret the tax code, it’s no wonder that individuals are reluctant to delve into them without help – the book is “about a foot tall,” says the Taxpayer Advocate.
Such complexity not only encumbers economic growth, but it leads to further distortions. Many make good-faith efforts to pay taxes and submit unintentional mistakes. Others, mainly those who can afford it, find loopholes or hire high-priced experts to reduce liabilities.
The tax code needs a reality check and common-sense reforms. One of the most fundamental changes the Taxpayer Advocate suggests is repealing the alternative minimum tax, or AMT, which will hit 33 million taxpayers in 2010 if nothing is done. Because it was not written to index inflation, the AMT now impacts a wider range of Americans than was ever intended. As the Advocate’s annual report notes, “Few people think of having children or living in a high-tax state as a tax-avoidance maneuver, but under the unique logic of the AMT, that is essentially how those actions are treated.” It is also onerous because taxpayers must compute taxes twice: first, under the regular system; then again, under the AMT in order to ensure they’re paying the higher amount.
The problems of our current tax code just get worse – and more costly every year, adding to taxpayers’ financial burdens and expanding dead-weight loss for the economy. Our country does have a choice in the matter. I introduced legislation called “A Roadmap for America’s Future,” H.R.6110, to give taxpayers the option to either file under existing law, or through a code that is so straightforward, it fits on a postcard. The simplified code has just two rates – 10% on income up to $100,000 for joint filers, and up to $50,000 for single filers; and 25% on taxable income above these amounts. Among other measures to reduce complexity, I would eliminate the AMT and provide a generous standard deduction and personal exemption.
As America battles its way through another tax season, there is a way out of the jungle that surrounds our nation’s tax rules.
The Debt: 2020 Just Arrived
February 9, 2009
By: Paul Ryan
One indicator of our nation’s fiscal health is the debt we owe to the public in relation to the economy. The Congressional Budget Office (CBO), the Office of Management and Budget, the General Accountability Office, and the Federal Reserve all tell us that the current structure of entitlement programs will deliver unsustainable debt levels in the future. CBO developed and published its long-term budget projections illustrating the seriousness of this problem well before the current economic downturn.
In December of 2007, CBO was projecting that debt held by the public as a percent of GDP would not reach 50 percent until 2020.
2020 just arrived.
The economic downturn combined with the costs associated with the stimulus bill (HR 1) will push the debt held by the public numbers to 52 percent of GDP this year, a jump of 10.8 percent compared to the previous year. And, this estimate doesn’t include the debt impact of other legislation Congress will pass this year (the FY 2009 omnibus appropriations bill, the war supplemental, etc.).
The bad news is that early projections for 2010 place the debt number closer to 60 percent than 50 percent. To put this in perspective, the last time the debt was above 50% was in 1956. Fifty-three years ago, however, the economy was booming, the debt was on a steep downward decline as the country reduced the debt burden accumulated during World War II, and the Nation was in the middle of the birth of the baby-boom generation. In fact, the average of the debt as a share of the economy since 1956 is 38 percent of GDP with a low of 24 percent in 1974.
Today, the economy is struggling, the debt is on a steep upward slope, and the leading edge of 80 million baby-boomers are beginning to retire.
The fiscal path we thought we were on last year has suddenly been advanced and we find ourselves further down the road with even less time to prepare. If this isn’t a clarion call for real entitlement reform, I don’t know what is.
Momentum Building for Entitlement Reform?
January 8, 2009
By: Paul Ryan
Yesterday, the Congressional Budget Office (CBO) offered sobering news. It reported that the expected deficit for Fiscal Year 2009 is $1.2 trillion. To make matters worse, this projection doesn’t include the likely passage of an economic stimulus plan, which will increase the deficit by hundreds of billions more.
As bad as the short-term budget picture may be, the long-term one is even worse. The nation’s unfunded obligations exceed $56 trillion and continue to grow by $2-3 trillion each year. If we do not address this fiscal tidal wave, the problems facing our economy will trump those we are experiencing today.
In light of yesterday’s news, President-elect Obama for the first time indicated a willingness to tackle the entitlement crisis. He stated that it is necessary to overhaul Social Security and Medicare to deal with both our short and longer-term economic problems, and he expects to include a reform plan in the budget submission he sends to Capitol Hill in February. While I have been concerned by the President elect’s past comments indicating that entitlement reform not be one of his Administration’s priorities [Click here to see past entry], I was pleased to hear him alter his focus to include this pressing problem. I hope that his reform proposals are substantive and truly get at root of the problem, and I eagerly await their details.
In the meantime, I am continuing to work in Congress to highlight the looming fiscal crisis. This morning, I sent a bipartisan letter to my congressional colleagues encouraging them to attend a screening of the film I.O.U.S.A., a well-done film highlighting the need to tackle our entitlement problem now. The letter is co-signed by Congressmen Jim Cooper (D-TN), Allen Boyd (D-FL), and Frank Wolf (R-VA), who are all leaders in Congress on this important issue. [click on paragraph to see Dear Colleague Letter]
U.S. Treasury Announces that Entitlement Problem Grows to $56 Trillion
December 15 , 2008
By: Paul Ryan
Today, the U.S. Treasury Department released the Financial Report of the U.S. Government ( http://www.fms.treas.gov/fr/index.html ). According to the report, our nation’s unfunded obligations have now grown to $56 trillion, $3 trillion more than last year. As a result, every American would now have to pay $185,000 to put our nation’s entitlement programs on a sustainable basis.
The longer we ignore this problem, the worse it becomes, and the larger the mountain of debt that we will pass on to our children. I truly hope that Democrats and Republicans in Congress can come together and seize the opportunity to address this problem this year. There are many Members in the House and Senate on both sides of the aisle, such as Democratic Congressman Jim Cooper of Tennessee, who agree that we need to act now. I am hopeful that we can encourage our congressional colleagues and the new Administration to act on this important and pressing matter.
For a letter that Congressman Cooper and I sent to our House colleagues today about the Financial Report, please click here: Dear Colleague.
For a press release from the Budget Committee, please click here: Press Release.
Fiscal Responsibility: Hollywood’s New Cause Celebre?
November 21, 2008
By: Paul Ryan
Earlier this week the film I.O.U.S.A., which highlights the fiscal crisis facing our country, was included on the Oscar short list for Best Documentary Film for 2008. I am pleased to see this important wakeup call to Washington politicians receive such broad recognition. David Walker, Pete Peterson, Bob Bixby, and everyone else involved with the film should be proud of their excellent work to raise the profile of the entitlement crisis. I hope many more Americans will go see the film and will actively encourage their elected officials to get engaged on this serious issue.
In addition to putting out a film, the same group released a book, also entitled I.O.U.S.A., which discusses the entitlement crisis at length and includes the transcript of interviews with leading economists about this grave problem. Unanimously, these economists stressed the importance of tackling this problem as soon as possible to avoid potentially devastating consequences. Here are a couple of quotes from the interviews that are worth noting:
“The spending on [Medicare, Medicaid, and Social Security] by sometime in the 2030s is likely to be about one-fifth of everything we produce. Now, one-fifth of everything we produce is about what we now spend to finance the whole federal government. So unless we are willing to raise taxes and keep on raising them, or close down the rest of the federal government, we have got a very big problem staring us in the face in the next couple of decades.” – Alice Rivlin, former Director of CBO and OMB
“The ultimate test of a moral society is the kind of world we are leaving to our children. Think of the taxes that are implied, which would have to be inflicted on our own kids and grandkids. Think of the debts we are piling on them and the costs to them of paying back those debts. The idea that we’re slipping this check to those kids for our free lunch is essentially a very immoral proposition, in my view” – Peter G. Peterson, leading American businessman
“[I]f we stay on this financial road, [it] could very seriously threaten our economy, job creation, and standard of living in this country.” – Robert Rubin, former U.S. Treasury Secretary
“In the future, there will be all kinds of consequences and uncertainty if we don’t deal with these problems…the threat will always be an unstable economy and an unstable currency. And that’s not just destructive to economic life, but it can be destructive to America’s position in the world, which to me is the greatest concern.” – Paul Volcker, former Chairman of the Federal Reserve
“There’s an extraordinary event for the first time in human history about to occur, which is a tsunami of retired people as the baby boom generation over time doubles the number of retirees…unless we find a way to delimit the size of the resource shift that’s implicit in current law, we are going to be in very serious trouble.” – Alan Greenspan, former Chairman of the Federal Reserve
“[W]hen a person comes into the world and into the United States, he carries with him this enormous public debt. It’s like part of his time and money has already been spent and now he will have to spend time earning money to pay for things people enjoy today.” – William Bonner, American author who was written extensively on U.S. debt
GAO: "The Nation’s Long-Term Fiscal Outlook"
November 6, 2008
By: Paul Ryan
Today, the Government Accountability Office (GAO) updated its simulation of “The Nation’s Long-Term Fiscal Outlook.” This report paints a sobering picture of the entitlement challenge. According to the GAO, its “updated simulations continue to show escalating and persistent deficits that illustrate the long-term fiscal outlook is unsustainable.” GAO continues to state that “[s]uch growth would inevitably result in declining GDP and future living standards,” and “these debt paths would likely result in rising inflation, higher interest rates, and the unwillingness of foreign investors to invest in a weakening American economy.”
Further, the report states that the nation’s long-term fiscal gap, or the amount of spending reductions or tax increases that would be needed to prevent a debt implosion, has risen to $56.1 trillion dollars under the most realistic of GAO’s assumptions. In other words, this means that the amount of debt per individual in the United States has now risen to approximately $187,000.
To illustrate the problem in another way, GAO also released a chart comparing the amount of revenue that the government is expected to take in through taxes versus the amount the government is expected to spend over the next 30 years.
As this chart demonstrates, if we do not alter the course we are on, by 2040, the amount we are projected to spend will be nearly double the amount of taxes we take in under current policies. According to GAO, this means that “if changes in federal individual income taxes were the sole means used to balance the budget, these would have to increase by more than three-quarters.”
The report also makes the point that “the longer action to deal with the nation’s long-term fiscal outlook is delayed, the greater the risk that the eventual changes will be destructive and destabilizing.” Just as sobering is the fact that these figures may be a conservative estimate of the long-term problem because they were compiled prior to the federal intervention into the credit markets and understate the debt associated with that intervention. While the current financial situation demands our immediate attention, this GAO report affirms that we do not have the luxury of waiting to deal with our long-term financial outlook.
To read more, please click on the following link:
The Nation’s Long-Term Fiscal Outlook [Sept. 2008 Update]
President-elect Obama’s Opportunity to Reform Entitlements
November 5, 2008
By: Paul Ryan
I join the nation in congratulating Barack Obama on his historic election as the 44th President of the United States. It was an extraordinary victory for him and the Democratic party, which in January will control larger majorities in Congress and the White House.
Along with the new Congress, President-elect Obama faces a daunting list of challenges, including guiding the nation through the current economic crisis. At the same time, he must not ignore the greatest long-term threat to our nation’s economic future: the looming entitlement crisis. Without reform, our largest entitlement programs – Medicare, Medicaid, and Social Security – will grow themselves into extinction, fail to meet their missions of health and retirement security, squeeze out spending on every other domestic priority, and significantly reduce the standard of living for future generations.
As Congressional Budget Office (CBO) Director Orszag recently warned: “ We will ultimately wind up with a financial crisis that is substantially more severe than even what we are facing today if we don’t alter the path of federal spending.”
President-elect Obama has a unique opportunity to build a bipartisan solution to this grave problem. In his victory speech, he called for bipartisanship and highlighted Lincoln’s principles of self-reliance, individual liberty, and national unity. During the campaign, however, I was deeply disappointed about his responses to this entitlement problem. In the second Presidential debate, when asked where entitlement reform fell among three national priorities, he did not list it. When directly asked whether addressing the entitlement crisis would be one of his priorities as President, he responded it was not on his agenda – at least not for the next two years.
I recognize these statements were made in the heat of a campaign, but if they become reality, the problem will grow far worse. Our nation is already facing a long-term unfunded liability of $53 trillion, and every year we do nothing, this worsens by $2-3 trillion dollars. In other words, every year of inaction adds about $10,000 to the debt burden on every man, woman, and child in America.
Members of Congress on both sides of the aisle have worked to spur action on this critical issue. These include Congressmen Cooper (D-TN) and Wolf (R-VA), and Senators Conrad (D-ND) and Gregg (R-NH), who have called for a Commission approach to tackle the problem. Last May, I proposed a plan called a Roadmap for America’s Future that would reform our nation’s entitlement programs and tax code by tapping into the entrepreneurship and individuality of the American people. Neither of these proposals is the only way to deal with the problem, but they could serve as a starting point for negotiation with the new Administration.
I am encouraged by President-elect Obama’s forward-looking rhetoric, his aspirations for an era of post-partisanship in Washington, and his goal of greater prosperity for America. I truly hope that as President, he will reach out to Congress to begin working on the entitlement crisis on a bipartisan basis. If he does so, I believe we can enter a new era in Washington, an era in which we roll up our sleeves together and get to work on the gravest long-term problem our Nation faces.
Congressional Budget Office Releases Budget & Economic Outlook:
Situation Will Worsen Dramatically If Nothing Is Done to Reform Entitlements
September 9, 2008
By: Paul Ryan
Today, the Congressional Budget Office [CBO] released its updated Budget and Economic Outlook (http://www.cbo.gov/doc.cfm?index=9706), predicting that the federal government’s budget deficit will exceed $400 billion for the next three years, reaching a peak of $438 billion in fiscal year 2009, the highest deficit ever in nominal terms. These projected deficits are unacceptably high, and both Republicans and Democrats are rightfully expressing frustration with the situation.
Unfortunately, what many Members of Congress are not focusing on is that today’s deficits pale in comparison to the staggering amount of red ink looming on the horizon. For example, while the deficits for the next few years represent around 3% of our country’s GDP, CBO predicts that by 2030, the out-of-control growth of entitlements could drive the annual budget deficit to over 10 % of GDP, more than three times the size of today’s record deficits. And this is just the beginning. By 2050, CBO projects that the deficit could grow to over 20% of GDP, and by 2082, the deficit could grow to 54% of GDP, nearly 20 times the size of this year’s deficit.
So while members of both parties will spend much of the day and even the remainder of the election season blaming each other for today’s budget mess, we must put politics aside and come together to address the longer-term fiscal crisis facing our nation. This problem has not received enough attention in the Presidential campaigns, in Congress, or in the press. This must change. The looming threat to our nation’s prosperity gets closer and larger each and every year that we wait, and if the growth of our entitlement programs is left unchecked, their size will eventually consume our economy and irreparably damage the country’s standard of living. Our children deserve a better future.
Census Reports 46 Million Americans Remain Without Insurance
August 26, 2008
By: Paul Ryan
Today, the U.S. Census Bureau reported that nearly 46 million Americans do not have health insurance. (http://www.census.gov/prod/2008pubs/p60-235.pdf). Although this is a slight decrease from last year’s level, the high number of uninsured in this country is staggering. Current Federal policies put affordable health care out of reach for millions of Americans. That is unacceptable and Congress can and should act immediately to address this problem. Every American who wants health care insurance should be given the opportunity to get affordable coverage.
There are many reasons that so many Americans lack health care coverage. One of the most prominent reasons is the rising cost of health care in the United States. In fact, health insurance premiums have risen 58% in just the last 5 years.
The reasons for these unsustainable increases are largely the making of the Congress and it is up to the Congress to fix them. The tax exclusion for employer-sponsored health insurance is a relic of a very different time in American history and has outlived its usefulness. Likewise, the lack of transparency in the health care markets – an unintended consequence of the third party payer system – confuses consumers confounds market efficiencies. It is essential that Congress fashion policies to address these rising costs and the market distortions that have helped create them.
The Roadmap for America’s Future (H.R. 6110) will provide universal access to health care for all Americans. Some of the key ways in which the Roadmap achieves this goal are by (1) providing all Americans with a refundable tax credit used to pay for health care; (2) requiring the public release of quality and price information and thereby promote competition in the marketplace to lower costs; and (3) creating high-risk pools that specifically cater to the needs of the uninsurable, those individuals who would otherwise be denied coverage due to pre-existing medical conditions.
Although much of Washington has become consumed with the upcoming elections, Congress needs to get to work on writing legislation into law such as the Roadmap, which would address one of the most pressing problems facing the nation today.
For more details on the Roadmap’s health care provisions, please click here:
Health Care Security
"I.O.U.S.A" to Premiere in Theatres Across the Country
"I.O.U.S.A": Highlighting the Fiscal Crisis Facing Our Country
August 13, 2008
By: Paul Ryan
On Thursday, August 21, “I.O.U.S.A” will be premiering in theatres across the country. This film, which was funded by the Peter G. Peterson Foundation, highlights the fiscal crisis facing our country and seeks to educate Americans about the dangers posed by the continued unwillingness of politicians in Washington to act on, or even discuss, this pressing issue.
I.O.U.S.A. follows one of the leading voices on this issue, former GAO Comptroller General David Walker, as he travels across the country explaining the dire financial condition of the U.S. government. The film provides an easily digestible helping of what is normally considered inside the Beltway budget arcana. The film looks at four deficits: the budget deficit, the trade deficit, the savings deficit, and finally, the deficit in leadership that fails to address these growing problems. It features candid interviews with Warren Buffett, Alan Greenspan, Pete Peterson, Judd Gregg, and Bob Bixby of the Concord Coalition, among others.
While this group may not have quite the same popular appeal as Brad Pitt or Angelina Jolie, and the movie’s catchphrases are unlikely to find a place in the pop culture lexicon, I’m hopeful that the film can start another trend – making it fashionable to talk about and propose solutions to the entitlement crisis. Perhaps the most effective way to get Members of Congress to tackle a problem is to have them hear about it from their constituents. I hope this film will motivate people to demand action from their elected officials on the entitlement crisis. I commend David Walker, Pete Peterson, Bob Bixby, and every one else that was involved with this film for their continued efforts to raise the profile of this issue.
The film is rated PG, an appropriate rating when one considers the alarming portrayal it provides of the future for our children and grandchildren if we fail to address this crisis.
For more information on the film, including show times and locations, please visit:
Working to Start a Bipartisan Dialogue
July 8, 2008
By: Paul Ryan
The entitlement crisis facing our future is not a Democratic problem or a Republican problem. It is a problem facing all Americans, and as a result, it requires bipartisan dialogue to advance a solution.
In recognition of this, I have participated in numerous events over the past few weeks with Members of Congress and think tanks that hold diverse political views. For example, on June 18, I participated in an entitlement event held by the Brookings Institution with my Democratic colleague, Representative Jim Cooper from Tennessee. The event gave us a chance to talk on a bipartisan basis about the fiscal crisis facing America and the need for Members of both parties to address it. To view my opening statement from the event, please click here:
Click Here to View Rep. Ryan’s Opening statement
Just last week, on June 30, I participated in the Fiscal Wake-up Tour in Milwaukee, WI. The Fiscal Wake-up Tour is a series of nationwide town hall-style forums that attempts to bring attention to the entitlement crisis. It is hosted by the Concord Coalition, the Heritage Foundation, and the Brookings Institution, think tanks representing a diversity of viewpoints. Like the Brookings event, the Fiscal Wake-up Tour also provided Democrats and Republicans an opportunity to come together to discuss the problem and call Congress to action. For a write up on the event that was printed in the Milwaukee Journal Sentinel, please click here:
Click Here for Article
This week I am continuing my efforts to advance a bipartisan discussion on legislation to address the entitlement crisis. On Wednesday, July 9, I will be hosting a health care debate between John Goodman of the National Center for Policy Analysis and Len Nichols of the New America Foundation. Once again, the goal of the debate is to start the dialogue in Washington, DC, and around the country about the importance of acting now to address the entitlement crisis. This debate will emphasize the largest cause of increased spending, health care, and will look at constructive ways to improve cost, quality and access to health care in a way that allows everyone to receive the care that they need without bankrupting the nation. For more details on the event, please click here:
Click Here to View Event Details
Letter from Federal Reserve Chairman, Ben Bernanke:
June 30 , 2008
By: Paul Ryan
Since introducing A Roadmap for America’s Future, I have been seeking feedback from leading policymakers and economic experts in Washington, DC, and around the country. Just last week, I received comments on my plan from the Chairman of the Federal Reserve, Ben Bernanke (see letter below). Chairman Bernanke’s letter acknowledges the daunting challenges facing the nation and states that “[The Roadmap] addresses some of the most important long-term fiscal and economic challenges faced by our nation.”
Further, Chairman Bernanke’s letter also indicates that two of the most important issues that we must address in the U.S. are the “developments in our health care system and the aging of the population.” I agree with Chairman Bernanke. We must tackle these difficult issues before they tackle us and put our country on a sustainable path toward economic growth and higher standards of living for future generations.
For a copy of the entire letter, please click here:
See Entire Letter from Chairman Bernanke
House Committee on the Budget Hearing
June 24, 2008
By: Paul Ryan
The SAFE Commission Act and the Long-Term Fiscal Challenge
Today, the House Budget Committee held a hearing on legislation to address the looming entitlement crisis through the creation of a bipartisan Entitlement Commission. During the hearing we heard from five distinguished witnesses who all encouraged Congress to act now without delay to address the problem. Here are some excerpts from their testimony:
“[G]overnment obligations are reaching unthinkable, and worse, unmanageable levels. Every American—even the youngest among us—is now burdened, most of them unknowingly, with more than $175,000 in federal liabilities and unfunded government promises. Taxes would have to more than double to pay for them. And that is unthinkable not only economically, but morally. Slipping this huge hidden check of debts and taxes to our children should, indeed, be declared immoral.” – Hon. Peter G. Peterson, Chairman, Peter G. Peterson Foundation
“[A]bsent meaningful entitlement, spending and tax reforms, the United States will face debt burdens in the future that would make third-world nations look thrifty. We are currently in a $53 trillion fiscal hole. This hole gets deeper by $2-$3 trillion a year on autopilot… [W]e need to start figuring how we are going to start climbing out of that hole… It is critical that we not continue to kick the can of tough choices down the road.” – Hon. David M. Walker, President and CEO, Peter G. Peterson Foundation
“Our projections of the long-term budget outlook show a “fiscal gap”… Specifically, under our projections, the publicly held debt, which today stands at a relatively modest 37 percent of GDP… to 231 percent by 2050. The Congressional Budget Office, in a recent letter to Mr. Ryan, estimates that in about 40 years, the per-person growth of the economy would halt and then begin to reverse. Such a situation would be untenable.” – Robert Greenstein, Executive Director, Center on Budget and Policy Priorities
“The Congressional Budget Office has issued projections of long-term spending and revenues twice in recent years, under the directorship of Douglas Holtz-Eakin, who was selected by a Republican Congress, and under the directorship of Peter Orszag, who was selected by a Democratic Congress. Their projections differ in detail, but both foresee the emergence of excessive budget deficits in future decades.” – Henry J. Aaron, Bruce and Virginia MacLaury Senior Fellow, The Brookings Institution
“Entitlement spending on Medicare, Medicaid, and Social Security is a tsunami heading toward our budgetary and economic shores. Experts across the ideological spectrum agree that entitlements threaten the nation’s priorities.” – Alison Acosta Fraser, Director, Roe Institute for Economic Policy Studies, The Heritage Foundation
I hope that Congress will finally take these warnings seriously, step up to the plate, and work on a bipartisan basis to address the challenge posed by the entitlement crisis.
For a copy of my testimony from today’s hearing, please click on the following link:
Ryan Prepared Opening Statement
Introducing a ‘Roadmap for America’s Future’
May 21, 2008
By: Paul Ryan
Today, I released a detailed plan and legislation to fix the Nation’s long-term budget and economic problems. I call this plan the “Roadmap for America’s Future.”
The legacy of America has always been one of a rising standard of living, where parents strive to leave their children better off than they were, with greater prosperity and more opportunity. Like any parent, I hope to provide this same legacy for my three children — to leave them with an America that is even better off than the great country where I grew up.
Unfortunately, I am concerned that standards of living in this country could suffer tremendously if we fail to face up to the problem of rapidly growing entitlement spending and allow budget deficits to grow out of control. I fear that this trend could swamp economic growth and leave my children with far fewer opportunities to get ahead in the world.
To get a sense of how big a problem this really might be, I recently asked the Congressional Budget Office (CBO), the non-partisan agency that provides budget and economic analyses for Congress, to analyze the impact on the American way of life if Congress fails to tackle the entitlement crisis and lets budget deficits grow out of control. As I feared, CBO offered a sobering reply. According to their analysis, this scenario would cause our nation’s standard of living, measured in terms of Gross National Product (GNP) per capita, to begin plummeting midway through this century, just as my children will be reaching their prime years in the workforce.
Of course, one way to cover the growth in entitlements would be to simply raise taxes as high as needed to cover the increased spending. I was curious about the impact this policy might have on the economy, and I asked CBO to model it as well. Unfortunately, CBO drew a similar conclusion –raising tax rates to pay for the entitlements would cripple the economy and cause standards of living to decline. In fact, CBO stated that “tax rates would have to more than double” to balance the budget. CBO continued to say that “such tax rates would significantly reduce economic activity,” and “[r]evenues would probably fall significantly short of the amount needed to finance the growth of spending; therefore, tax rates at such levels would probably not be economically feasible.” Under this scenario, GNP per capita would fall significantly as well. In short, we cannot tax our way out of this problem.
So, finally, I had CBO look at one last alternative – I asked them what would happen if we were able to reform entitlements and keep spending on a path outlined by the Roadmap For America’s Future. The results were quite different. According to CBO, the path envisioned by the Roadmap would result in a considerably stronger economy, with standards of living much higher than today. Under the Roadmap, CBO stated that GNP per person would be a full 85 percent higher than if we did nothing to address the entitlement crisis.
With the Roadmap for America’s Future I have put forward policies to fix our entitlement programs and provide for a bright future for the country. While not everyone who reads about my plan will agree with everything I have proposed, I hope there is at least one thing we can all agree on. We need to begin developing solutions to this problem. If we do not, we will fail to do what previous generations have done for us — to leave a better America for the next generation. That is the type of America we should all strive for — an America with greater economic growth, greater opportunities for advancement, and higher standards of living. This is an America we can be proud to pass on to our children.
For the full text of CBO’s analysis, please click on the following link:
CBO Analysis Link