Gingrich Is Right on the Politics of Medicare: Ryan’s Plan Will not Sell – Democrats Win Big on This, as Americans Want to Keep All Benefits

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By Paolo von Schirach

May 23, 2011

WASHINGTON– A recent Associated Press-GfK polls confirms what all politicians instinctively know about federally funded entitlements: most Americans want to keep Social Security and Medicare as they are currently structured. They do not believe, or they do not want to believe, that cost is an issue affecting long term viability. Ignoring massive non partisan evidence, a majority of Americans amazingly still believe that it is possible to re-balance the budget and put the US on a healthy long term fiscal course without reducing these fantastically expensive entitlement programs. And, most ominously for the Republicans, according to the same poll, US voters believe that only the Democrats can be trusted to keep things as they are regarding cherished Medicare and Social Security benefits. And they are right, as Republicans talk openly about paring down, in order to reduce spending.

Republicans right on the issues, Democrats right on the politics

In short, the Republicans are right on the merit of the issue: “We need to cut entitlements, otherwise their growth will ruin us”. The Democrats are right on the politics: “Americans like these programs, and we Democrats shall gain politically by stating that we shall preserve them”. And since the next elections will be in 2012, way before the entitlement programs will be in serious distress due to inadequate funding, the Democrats win, the Republicans lose –at least on this fundamental issue.

Ginrich attacks Republican Plan

To make things better for the Democrats, there is infighting among Republicans on this. Former House Speaker Newt Gingrich, now a contender for the Republican 2012 presidential nomination, created a big ruckus a few days ago by saying that the Republican Medicare reform plan, as reflected in a Budget proposals just passed by the House Republicans, (although it will never get through the Senate controlled by the Democrats), is too radical and that it is some kind of right wing social engineering. Gingrich says that he would like to reform the program, for sure; but gradually, and with more consultation, experimentation, etc.

This totally undiplomatic and uncharacteristically strong attack on a product of his own party, made on national TV, created deep consternation among Republicans, not accustomed to sniping from within. Do consider that all the House Republicans voted for what is known as the “Paul Ryan Plan”, after the Chairman of the House Budget Committee who conjured up the Medicare reform proposal.

Gingrich undiplomatic; yet right on the politics: this will not sell

So, is Newt Gingrich wrong? Is he a traitor? Did he go mad by attacking his own party platform? None of the above. He is undiplomatic and socially challenged, perhaps, regarding timing and choice of words. But he is neither mad nor wrong. He knows the politics of welfare programs and he wants to win the elections. He knows –as all observers know– that the House Medicare plan is now a political liability. Whatever its substance, politically it is way too big of a jump. America is unprepared for it. And the public does not buy it. Unfortunately Americans do not understand the severity of the fiscal crisis; and they do not understand that it is mostly about the increasing cost of entitlement programs as currently structured, including Medicare.

Paul Ryan: courageous reform, but no real popular following

I commented in previous pieces that the GOP Medicare reform proposal put together by Paul Ryan, Chairman of the House Budget Committee, is revolutionary. I praised Mr. Ryan for his boldness in putting on the table something entirely new, amounting in practice to the end of the Medicare program as we know it, by transforming in into a limited subsidy. There is also hope that the end of government as an enabler of health care inflation, (in as much as Uncle Sam pays the bills as presented by physicians), might put salutary pressure on the health care industry, so that it will reduce its costs.

However, I also said that, substance aside, the political appeal of such a radical change would be modest if not minimal, even in this supposedly new Tea Party inspired fiscal rigor climate. I sensed that it would be very difficult for anybody running for the GOP nomination –if they really want to get elected and not just nominated by the party faithful– to get squarely behind this reform program that essentially cuts the level of benefits, as a way to pare down the federal deficit. I thought that Ryan was courageous in coming up with something new and radical; but I believed that he would be charging along essentially alone.

GOP presidential contenders not endorsing Ryan Medicare Plan

And it turned out more or less this way. While it is still very, very early in the GOP nomination process, no serious Republican contender for 2012 so far has touched the Ryan Medicare reform plan, let alone embraced it. Undiplomatically, presidential hopeful Gingrich attacked it and essentially dismissed it, to the delight of the Democrats. An open disagreement among key Republicans over such a major issue is a fantastic political bonus. So, let the Republicans shoots themselves in the foot. The Democrats gain simply by claiming that they will protect the status quo, essentially doing nothing. They know that they are on the correct political side of this issue. Americans want these programs, while they believe that these entitlments will be preserved as long as the Democrats are in control. Most Americans conveniently ignore the cost of all this; and the Democrats are not interested in reminding them.

So, is Paul Ryan hopelessly wrong? Not really. Ryan may be wrong in the type of remedy and the timing of radical changes. But he is absolutely right on the merit: we do need to change course. The cost of entitlements –Medicare first and foremost– will grow so much that in a few years it will absorb the entire federal budget. The Republicans problem is that they do not yet know how to sell this politically; and I seriouly doubt that they will be able to find a good way before the 2012 elections, as Americans just do not believe that Medicare will bankrupt the US.

Americans in denial

Indeed, the fundamental problem here is that America is still mostly in denial about the extent of the fiscal crisis and that the crisis is caused mostly by the growing cost of Medicare, Social Security and Medicaid. And the Democrats can cynically ride this between now and November 2012.

We know and they know that Medicare, Medicaid and Social Security will not go broke by the time of the elections. Sure enough, if the programs are left unchanged financial ruin will come –but not just now. It will be a decade or more before the growing cost of federal entitlments turns into a fiscal emergency. In the meantime, between now and November 2012, it is not about “making the hard choices”. It is all about winning elections. And if the voters believe that Medicare is affordable, why contradict them?

With their earnest, but politically ill advised, radical reform plan the Republicans gave the Democrats a powerful political advantage. Just by guaranteeing that they will not change Medicare, the Democrats have secured the votes of a huge majority of senior Americans who depend on these programs and of millions of others who count on them as soon as they will retire.

Advantage for the Democrats, defenders of entitlements

Of course, many things can change between now and November 2012. And Barack Obama’s record is hardly stellar. He is likely to go into the general election with low economic growth, still high unemployment, a sickly housing market, foreclosures and more bad stuff. But he will also be known to tens of millions of senior Americans as the president who will preserve the entitlements most Americans want. The president knows that long term Medicare is unaffordable. But this is a problem that we can deal with later. Right now, let’s get re-elected. And thanks to Republican political clumsiness, the job just got a bit easier.

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