Obama's new adversary

A great profile on Paul Ryan at Fortune: some excerpts...

...America is "sleep-walking toward a debt crisis." Ryan tells me: "Within a few years a sale of government bonds will fail. The capital markets will go crazy, and the Fed and Treasury will run to Capitol Hill demanding a giant bailout. Adding Obamacare would make the crisis go deeper and arrive faster."

Ryan's deficit roadmap
What is the Ryan plan , and why is the Obama administration seemingly obsessed with it? Ryan calls his proposal, published in January, the Roadmap for America's Future. It's a remarkably comprehensive, daring manifesto that tackles every part of the budget on a presidential scale, from Social Security to tax policy to health-care reform.

The goal is to eliminate the deficit, and eventually all federal debt, without any crippling tax increases. Under Ryan's plan, for example, federal spending would reach just 24% of GDP in 2035 and then fall, vs. the CBO's projection of 34% and rising from there. Ryan would make the deficit disappear by mid-century.

Ryan, to be sure, voted for President George W. Bush's tax cuts, which added to the U.S. deficit, but he blames the current mess on excessive spending, which he proposes to control.

But he's not trying to gut all programs. He wants to maintain promised health-care and retirement benefits for those who require them -- the sick and the poor, and not just for today's needy but for future generations. But he would also lower future benefits for the middle class. He would index future Social Security benefits to wage growth for, say, a family earning $28,000, but limit increases to inflation for households that made over $149,000.

Ryan also wants to totally change the way the government aids most Americans. His plan would use vouchers and tax credits to allow families to buy their own Medicare plans, private health insurance, and retirement accounts. His view is that by directly handing middle-class taxpayers part of the money the government now spends on their benefits, they will demand bargains and better service. Ryan predicts that what the middle class will lose in guaranteed benefits they'll more than recoup through robust economic growth and lower prices.

Regarding health care...
His prescription for health care is radical: Ryan would eliminate the exclusion allowing companies to lavish on employees tax-free benefits and give the tax breaks to the workers themselves through a rebate of $5,700 a family, or a check for that amount if they don't pay taxes.

"The problem with both Medicare and private plans is the third-party-payer system," says Ryan. "Consumers, spending their own money, will drive down prices." Ryan proposes a classic flat-tax solution: Americans could choose between using today's byzantine rules and a simplified, post-card model with two rates, 10% and 25%. Believe it or not, the simplified system would disallow mortgage and other deductions.

In February the Congressional Budget Office analyzed Ryan's road map -- and confirmed that it produced the falling deficits and balanced budgets that Ryan promises. "By proposing cuts in benefits, Paul Ryan is demonstrating the nature of the solution that must occur," former Fed chief Alan Greenspan told Fortune. "You can't close the gap with tax increases alone, and if you try to do it, you slow growth and reduce future tax receipts."

Read it all!  Then read the Roadmap for America's Future .  Then watch President Obama squirm and offer no coherent response when confronted with Rep. Ryan's analysis at the Healthcare Summit. Then dare to say that the Republicans have not presented any plans to address the current economic situation or health care! -SP