Another Budget

Cut Medicare More, Food Stamps Less—David Frum

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Paul Ryan has released today his new House Republican budget. The budget revises and revisits some former Ryan ideas, in particular bringing Ryan's plans for Medicare premium support more in line with ideas endorsed by the likely Republican presidential nominee.

The main elements of the plan are carried over from last year, however:

* Substantial immediate spending cuts in income maintenance programs for the poor.* Block-granting of Medicaid to the states, allowing them larger scope to revise the program.* A shift from current Medicare to Medicare premium-support beginning 10 years from now.* Large cuts in individual and corporate income taxes, combined with some tax reform intended to recoup revenues.

Many of the crucial details of the plan are as yet unspecified. But Ryan is clear that his plan will lead to rapid reductions in federal deficits.

And of course Rep. Ryan is right: The country needs a plan to move toward fiscal balance as the economy recovers.

But notice how much harder the job gets when you exempt Medicare entirely—and when you try to cut taxes at the same time as you seek to balance the budget. The likelihood is that even this coming period of economic recovery will weigh heavily on many Americans. We are still probably at least three years away from full employment. Does it make sense to squeeze those programs hardest and first?Medicare is where the money is. Given America's heavy overspending on healthcare, Medicare is also where the easiest economies are to be found.

We cant immediately move to premium support. But we can move earlier to comparative effectiveness review—this is public money, after all, and it should be spent rationally.