Q&A: Paul Ryan on the Debt Ceiling Debate and Medicare

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Kevin Lamarque / Reuters

On Tuesday, as congressional leaders and President Obama fought a public battle over cutting spending and increasing revenue, Rep. Paul Ryan was elsewhere, leading a discussion over an issue that just happens to be at the center of the current debate over national debt: Medicare spending. Ryan, GOP chairman of the House Budget Committee, recently proposed a set of radical reforms to Medicare that would essentially privatize the program and dramatically reduce the government’s investment in it. In a Tuesday budget committee hearing, Ryan focused on the Independent Payment Advisory Board, a group created by the Affordable Care Act that is charged with containing Medicare cost increases. (He’ll hold another Medicare hearing on Wednesday.)

It’s fair to say Ryan despises IPAB and wants to eliminate it as soon as possible. But even he admits doing this before 2013 is impossible. I talked to Ryan Tuesday afternoon about why he’s holding hearings advocating repeal of IPAB anyway, how he feels about the entitlement and debt reduction platforms of those running for the 2012 GOP nomination for President and how he was pleasantly surprised by something President Obama said recently. The following is a lightly edited transcript of that conversation:

Obviously, entitlement reform is at the center of the current debt ceiling negotiations, which I imagine must make you happy. Do you feel responsible for bringing the issue to the front of the debate?

I do feel that we helped shift the debate closer to where it needs to be, which is entitlements, spending, the dangerous trajectory we are on. We have brought our partners across the aisle closer to what I would call fiscal reality. Where this is going to end up, I really, really don’t know. But I do believe by leading and putting ideas on the table, it has helped get the conversation started.

(MORE: Is Paul Ryan’s Plan the New Third Rail of GOP Politics?)

Were you surprised to see reports that the President put raising the Medicare retirement age on the table?

I was actually because he had been pretty much disavowing any kind of fundamental Medicare reform other than what he put in his health care law. Look, longevity is increasing. It’s among the most reasonable reforms that are out there. I think it’s pretty tough to defeat the logic of it. I think it’s a concession he was willing to make because it’s difficult to argue against it.

What, if any, role are you playing in the current debt ceiling negotiations and talks in the GOP caucus?

I and my staff crunch a lot of numbers and review ideas, so more of like an advisory role and a number-crunching role.

What did you think of the Lieberman-Coburn reform proposal to reform Medicare?

I thought it was a breath of fresh air that somebody brought a plan to the table. Those kinds of things you’ll need to do more of if you don’t go with fundamental reform. That would be just a beginning, a starting point, a down payment. If you don’t go with the kinds of reforms we’re talking about for the prospective generations – for the 54 and below crowd – you’ll have to go down the Lieberman-Coburn path and do about ten times as much.

(MORE: Paul Ryan’s Sisyphean Task Selling Medicare Reform)

Is repealing IPAB your goal?

Well, it’s more the repeal of the Affordable Care Act, which obviously includes IPAB. I really don’t think IPAB is going to work. They call it a backstop or a failsafe [to inaction by Congress to control increases in Medicare spending]. Here’s how this goes down politically: A congressman is going to sit in Congress in 2014, 2015, 2021 and he’s going to say, ‘You mean, I don’t have to put these painful price controls in Medicare? I can just sit back and this board will do it without me having to take a vote for it? Well, heck, I’m not going to do it.’ That’s exactly what will happen. That’s what it’s designed to do. It’s designed to give politicians the ability to wash their hands of any responsibility.

If we’re going to talk politics, it seems unlikely that full repeal of the ACA is going to happen with this Congress and the same is true with standalone IPAB repeal.

Right, that won’t happen.

Given this political reality, what’s the point in spending so much time holding these hearings?

I’ve always felt that through committee hearings, you get Congress’s attention and the public’s attention and out of that, you end up getting good public policy. It’s not going to be done in the next 18 months, but we’re setting the stage – provided the elections go the way we want them to – to fixing this problem. You make the case for what you believe in, how you want to do it and you take it to the people, let them decide. If you win, you have the obligation and the moral authority to do it.

Yeah, we’re not going to repeal ObamaCare lock, stock and barrel this year or IPAB alone, but we’re going to go the country with a case to make.

The CBO says your Medicare reform plan would cause seniors to eventually pay an average of about 60% of their health care costs. Do you think seniors will be able to afford this?

Well no, but I don’t think that’s going to be the case. What CBO tells us is that they don’t have the ability to estimate the effect that choice and competition will have. And they’re measuring against a baseline that’s a fiscal fantasy.

You can’t fix his problem by just reforming Medicare or Medicaid. You’ve got to deal with the entire health care system. That’s where I will agree with the President and Democrats. You can’t get at the root cause of medical inflation unless you address policies across the board.

(MORE: Medicare Debate: How Obama and Ryan Fooled Themselves)

Did you include reforms in your Medicare plan that would address health care costs?

Well, a budget resolution – because of the germaneness of reconciliation – you don’t put all those things in there, but there are a number of things I would do. Insurance reforms – not just inter-state shopping – but high-risk pools that are fully funded that subsidize those with pre-existing conditions. I really believe the tax exclusion is a huge source of health inflation, props up the third-party payment system and subsidizes the wrong people in society. If you’re in the top tax bracket, you get the biggest subsidy; if you’re in the lowest tax bracket, you get the smallest tax subsidy. It’s upside down. So I’ve always believed in refundable tax credits.

But you can’t address all those things in a budget resolution. You need more than a budget resolution.

Within the 2012 GOP field, whose ideas on entitlement reform and debt reduction appeal to you?

I don’t know. I think just about all the Republican candidates have acknowledged the entitlement problem and the debt problem. Some talk about it with varying degrees of detail. I don’t have a particular person I’m behind. I think it’s way too early for that. It’ll be a long time before the field matures.

You’ve won re-election by big margins in the past. Do you think it’s going to be closer this year?

I’ve held over 500 listening sessions on this. People who I represent know me very well and they know more about the details of my plan than just about anybody else in any congressional district. More to the point, the comments I get constantly – I’m telling you, go to the gas station, the grocery store, the soccer field or the airport – everybody says, ‘Look, at least you’re in there fighting and trying to make a difference.’ People are hungry for leadership on this issue and they will reward that leadership, so I’m really not worried, but I never take a person’s vote for granted.

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