Document Sample
Ryan Powered By Docstoc
					                   Carrying Wisconsin’s Torch of Reform

                                         Paul Ryan

     Wisconsinites are a forward-looking people that fight for a better tomorrow by
reforming the broken institutions of today. Our state motto says it all: Forward. Since our
early pioneers drafted a constitution in 1848, Wisconsinites have worked to make
government more accountable to those it serves and harness the best in its people. From
Robert LaFollette’s Progressive Movement to Tommy Thompson’s Welfare Reform—
Wisconsin has put forth bold ideas that transform the relationship between the people and
their government.
     Wisconsinites are hungry for reform. I have held over 400 listening sessions in my
ten years of serving Wisconsin’s First Congressional District. Everywhere I go, people
tell me, “Washington is broken, and isn’t dealing with our nation’s most pressing
problems.” They are right. By failing to tackle the greatest threat to our nation’s long-
term economic prosperity—the explosion of entitlement spending—we are failing the
next generation of Americans.
     Let’s explore this looming fiscal crisis in greater depth. Unrestrained health care costs
coupled with the retirement of the baby boomers are driving the social insurance
programs of the past century—those that promise health and retirement security—toward
financial collapse. Medicare, Medicaid, and Social Security will not only grow
themselves into extinction, they will immensely burden our economy and our budget—
piling massive amounts of debt on future generations, crippling our ability to compete in
the international marketplace, and dramatically reducing American’s standards of living.
     Our continued failure to address this crisis has set us on an unsustainable fiscal path.
When my three young children are my age (38), the Federal Government will consume
40% of our economy. To put this in perspective, our federal government, in order to
function, has historically taken 18.3 cents on every dollar made in America. If we do
nothing to address the explosion of entitlement spending, when my kids are my age, 40
cents of every dollar will be needed just to keep the government afloat. This will occur
with no new programs, no new spending—double the taxes just to maintain the status
     We are shackling our children with a crushing burden of debt and taxes. With
Medicare and Social Security alone, we have an unfunded liability of $40 trillion today—
which is over $350,000 per household. With each year we put off reform, the problem
gets considerably worse—adding $2 trillion more in unfunded liabilities a year. This is
what is meant when I say that the Federal government is making promises it knows it
can’t keep. The looming fiscal and economic crisis we face is no longer in question.
What remains in doubt is whether America's leaders will lead and set a different course
for the next generation.
     We must apply Wisconsin's appetite for reform and realism to the nation’s fiscal and
economic crisis. To meet this challenge and secure our fiscal future, I have introduced a
comprehensive legislative plan called “A Roadmap for America's Future.” This proposal
recognizes the interrelated crises in health care, entitlement spending, the outdated
Federal tax code, and our growing debt.
    This Roadmap will keep the size of government at a sustainable level and achieve the
following three objectives:
        1. Fulfills the mission of health and retirement security for all Americans;
        2. Lifts the crushing burden of debt and taxes from the shoulders of future
            generations; and
        3. Strengthens American jobs and competitiveness in the 21st century global
    Here are its main components:
Health Insurance
    We spend more than any other nation on health care, yet nearly 50 million Americans
are uninsured. In addition, Americans with health insurance are losing more of their
paychecks to sky-rocketing health care costs. Americans should not fear bankruptcy due
to a major illness.
    Reducing the costs of health care is my first priority. This would be done by
requiring health care providers to fully disclose upfront the prices and quality of health
care services. If people know upfront what services cost and who provides the best
service, health care providers will be forced to lower prices and provide better service in
order to attract patients.
    My plan provides universal access to affordable health insurance, by providing all
Americans with an advanceable, refundable tax credit to pay for health coverage.
Individuals will be able to buy insurance offered by any provider in any state—not just
the one where they live—and carry it with them if they move or change jobs. My reforms
strengthen the health care safety net, providing direct assistance for those with chronic
illnesses and preexisting conditions. If you're really sick or have a disease that makes it
hard or impossible for you to get insurance, the state will help you enroll in and help pay
for a health insurance plan. This allocates health care spending more compassionately
and more intelligently—providing preventative care on the front end for those with the
greatest needs.
Medicaid and Medicare
    Medicare is a vital program that provides health care to all Americans over the age of
65. Yet, this program is headed for collapse, with an unfunded liability of $34 trillion. I
believe that unless we do something to fix these problems, there will be no health
insurance program for future generations of seniors, and I want to make sure it's there for
those who are counting on it.
    The bill secures the existing Medicare program for those over 55—so Americans can
receive the benefits they planned for throughout most of their working lives. Those 55
and younger will, when they retire, receive an annual payment of up to $9,500 to
purchase health coverage that best suits their needs—either from a list of Medicare-
certified plans, or any plan in the individual market, in any state.
    The $9,500 payment is adjusted for inflation and based on income, with low-income
individuals receiving greater support and a funded medical savings account. Seniors with
deteriorating health conditions will also receive additional support.
     The bill also modernizes Medicaid by giving states maximum flexibility to tailor their
Medicaid programs to the specific needs of their populations. It also allows Medicaid
recipients to avail themselves of the health coverage options open to everyone else
through the tax-credit option. According to the chief actuary at the Centers for Medicare
and Medicaid Services, my plan makes these programs permanently solvent.
Social Security
     In 2017, Social Security will begin to pay out more in benefits than it brings in
through payroll taxes, and the Social Security Trust Fund will be completely exhausted
by 2041. When first enacted in 1935, there were 42 working-age Americans for each
retiree, and the average life expectancy was 62. With life expectancy now near 80, and
only three workers paying to finance benefits for each retiree, it is no surprise that this
pay-as-you-go New Deal program will soon collapse.
     My proposal’s reforms will be gradually phased in so that the current system remains
intact for those in and near retirement. My plan starts by ending the raid on the Social
Security Trust Fund. Workers under 55 will have the voluntary option of investing over
one-third of their current Social Security taxes into personal retirement accounts. These
personal accounts will be overseen by Social Security Personal Savings Account Board—
not a stock broker or private investment firm—and will likely enjoy higher rates of return
than the traditional benefit. They are also the property of the individual, and are thus fully
     The bill includes a guarantee that no one's total Social Security benefits from the
personal accounts will be less than if he had chosen to stay in the current system.
Combined with a more realistic plan for growth in Social Security benefits, and an
eventual increase in the retirement age, the Social Security program can thus become
sustainable for the long term. According to the chief actuary at the Social Security
Administration, my plan makes Social Security permanently solvent.
Tax Reform
     The current federal tax code is complex, burdensome and discourages economic
growth. It cannot be fixed with incremental changes; it needs a complete overhaul.
     To accomplish this goal, the bill first of all offers individuals a choice of how to pay
their taxes—either through the existing tax code, or through a simplified code with a tax
return that fits on a postcard. It has just two rates and virtually no special tax deductions,
credits, loopholes, and exclusions (except the health care tax credit). Taxpayers
themselves choose which code serves them better.
     The rates in the simplified code are 10% on income up to $100,000 for joint filers
($50,000 for single filers); and 25% on taxable income above these amounts. There is
also a generous standard deduction of $25,000 for joint tax filers, and $12,500 for single
filers. There is also a $3,500 personal exemption. This results in a $39,000 exemption for
a family of four. The alternative minimum tax is eliminated. And to promote long-term
investment in economic growth, taxes on capital gains, dividends and estates are also
     On the business side, the bill gets rid of our uncompetitive corporate tax—currently
the second highest in the industrialized world—and replaces it with a business
consumption tax of 8.5%, which is half the average industrialized world rate. It levels the
playing field for American-made goods and services by removing taxes from American-
made exports and putting an equal tax on foreign imports. It encourages companies to
invest in America, promotes jobs here at home, and strengthens the paychecks of
American workers.
     The Roadmap I'm offering is a real plan, with real proposals, real numbers to back
them, and real legislation (H.R. 6110) to implement it. The Roadmap takes us off of our
crash course toward stagnation, and moves us onto an alternative, sustainable path. The
full plan can be accessed at:
     Wisconsin has been called “America's Laboratory for Democracy”—and rightly so.
Our laboratory produced the Republican Party and the Progressive Movement. University
of Wisconsin-Madison economists crafted and helped implement Social Security in the
1930s. As Wisconsin innovators helped set the framework for the social insurance
strategies of the 20th century, Wisconsin must transform them for this century.
     Tommy Thompson’s welfare reform of the 1990s exemplifies how we can bring
about entitlement reform for this decade. At first, Thompson’s idea that we should
empower society’s most vulnerable—rather than further fuel a dangerous dependence—
was dismissed as too bold and too upsetting to the status quo. Yet Wisconsin’s welfare
reforms—reforms that strive for an ideal, but are rooted in pragmatism and common
sense—quickly gained national prominence and became the law of the land.
     Similarly, “A Roadmap for America’s Future” is an ambitious proposal. Not
everyone will agree with every aspect of it, and that's fine. But it is my sincere hope that
it will spur Congress and today’s political leaders to move beyond simply rehashing the
problem—to the politically difficult, but critical task of debating, and implementing
actual solutions for the American people.
     These problems are too big to grow our way out of, tax our way out of, or borrow our
way out of. The problems are not Democratic problems or Republican problems—and
cannot be solved exclusively using the political ideology of either party. We need to build
bipartisan support across America for leaders to take on our entitlement crisis.
     The unique American legacy is that each generation tackles its defining challenge and
leaves the next generation better off. Previous generations have risen to the occasion and
left America stronger, safer, and more prosperous for the next generation. This looming
fiscal crisis is our defining challenge, and we must take decisive action if we are to
uphold the American legacy.

Paul Ryan (R) is the Representative to the U.S. Congress from Wisconsin’s 1st
Congressional District.

Shared By: