It’s Tuesday, August 14th, 2012….and here’s The Gouge!

First up, courtesy of Speed Mach and Ricochet.com, Paul Rahe details a decision he believes amounts to….

Romney’s Declaration of War

 

And if you still have doubts about Paul Ryan’s commitment to fiscal sanity and averting national insolvency, join the WSJ‘s Joe Rago as he travels back to 2008 to review….

The Forgotten History of Ryan’s Medicare Reform

How the House budget chairman developed his premium-support concept, which was originally supported by Democrats. It’s the only plan that won’t send grandma over a cliff.

 

There was a small but instructive moment in 2010, the summer after the passage of the Affordable Care Act, that shows why Paul Ryan is so unusual for Washington. A panel at the American Enterprise Institute featured Richard Foster, the Medicare actuary who estimates that ObamaCare’s $716 billion in Medicare cuts will cause one of six hospitals to become unprofitable. In the audience was Chip Kahn, the president of a for-profit hospital trade group that lobbied for ObamaCare, who stood up to defend the bargain his industry cut in return for 30 million new subsidized customers.

Mr. Foster noted that the cuts, which come via a technical change to Medicare payment rates, apply in perpetuity. But the hospitals only get the extra patients once, so the wedge between costs and benefits for hospitals widens over time.

“Well,” Mr. Kahn replied, “you can say, ‘Did you make a bad deal?’ Fortunately I don’t think I’ll probably be working after 2020.” When Mr. Foster pressed him, he joked again, “I’m glad my contract only goes another six years.”

This kind of short-range thinking—and intellectual exhaustion—dominates both parties and their many clients in Washington, in health care especially. Mr. Ryan’s political character has always been different. He saw before anyone else that one era of government was inexorably ending, and that if we want things to stay as they are, things will have to change.

In 2008, amid the poverty of ambition of the late Bush presidency, Mr. Ryan released “A Roadmap for America’s Future,” a 71-page document that was the first plan in years to take arithmetic seriously. The then-obscure Wisconsin congressman dropped by the Journal to sell his vision, no press secretary, no handlers. “I want to be the Paul Revere of the fisc,” he said, according to my notes from the meeting.

Mr. Ryan knew as everyone who knows the budget knows that the federal balance sheet can’t be improved by zeroing out foreign aid to Mozambique and arts funding for off-off-off Broadway plays. Medicare is such a large share of spending, and growing so much faster than any other item, that fiscal reform must include the popular entitlement.

Yet the larger goal, Mr. Ryan wrote in the roadmap’s preface, was to modernize Medicare for “the realities of the new century.” His aim was “not to retreat from the commitments made over the past eight decades, but to fulfill them.” In a word, to preserve retirement security and the social safety net. (A goal Dimocrats claim as their exclusive province, but which they cannot possibly achieve through the policies they promote.)

The core problem is that open-ended Medicare, which spends one of five dollars in health care, buys services whose costs are rapidly increasing. It is a “defined benefit.” Mr. Ryan wants to move to a “defined contribution,” where seniors would get a fixed-dollar subsidy to buy private insurance. Seniors who desire more generous benefits would pay at the margin. This shift to “premium support,” akin to the private-sector transition to 401(k)s from pensions, would change the incentives in health care and make medicine more accountable to patient choice.

Today, Medicare’s arbitrary fee-for-service price controls pay the best hospitals and the worst hospitals equally, regardless of quality or value. Innovators who deliver better care at a lower cost are rarely rewarded, as they would be in any other industry. Under premium support, networks of providers would be competing for consumers and become more efficient over time, instead of billing taxpayers for their current negative rate of productivity. (Competition!)

Under the 2008 roadmap, seniors would get a straight cash voucher for $9,500 a year (the amount Medicare then spent per person), indexed to a blended measure of general inflation and the rise of health costs. The poorest and the sickest would get more, the wealthiest seniors less. Nothing would change for people older than 55. (53 if one assumes it will take two year to pass this common-sense solution to otherwise un-fixable problem.)

Back then, Mr. Ryan was the only Republican to give a reform agenda definition. The roadmap earned all of eight cosponsors and never got a committee vote. Mr. Ryan was drawing from a rich intellectual well. Premium support was first proposed by Stanford economist Alain Enthoven in the New England Journal of Medicine in 1978. He observed that the pervasive methods of direct economic regulation of health care did not contain costs and suggested that “managed competition” would do a better job.

‘The point,” Mr. Enthoven wrote, “is that government has certain limitations that are deeply rooted, if not inherent. Government is good at some things, such as taking money from taxpayers and paying it to social-security beneficiaries, and maintaining competition in many industries; it performs badly at other things.” Premium support’s “cumulative effect is intended to alter the system radically, but gradually and voluntarily, in the long run.”

Mr. Enthoven’s reform models were the Federal Employees Health Benefits Program, created in 1959, and Calpers, the California health-insurance program for public employees. He used premium support when he designed the Stanford faculty health plan.

Mr. Enthoven’s ideas won some support in the Carter administration. Deregulation czar Alfred Kahn publicly endorsed them. Missouri Democrat Dick Gephardt, of all people, pushed them in Congress.

In the 1990s, premium support’s chief advocates were Henry Aaron of the Brookings Institution and Bob Reischauer of the Urban Institute. Neither shop is known as a hatchery for conservative ideology. (Mr. Aaron has since recanted.) President Clinton’s 17-member Medicare commission, chaired by Louisiana Democrat John Breaux, endorsed the reform in 1999.

But Mr. Ryan did what a million blue-ribbon panels never could: In late 2010 and 2011, he led an internal struggle to educate and convince the risk-averse Republican caucus to get behind his plan. Newt Gingrich’s notorious remark about “right-wing social engineering” gives a flavor of the objections. The main doubters were the careerist old guard.

When Mr. Ryan’s ideas had no chance of enactment, liberals praised his sincerity. President Obama lauded “a serious proposal” worthy of “healthy debate” in 2009. When the House GOP dared to include it in their budget, liberals responded with varying degrees of hysteria. Mr. Obama recently savaged premium support as “social Darwinism,” and that was the subtle part.

The main objection is that the premium supports wouldn’t keep pace with the rising health costs that Medicare now promotes, forcing seniors to pay for the overflow out of pocket. But that assumes doctors and hospitals won’t change their behavior when the incentives change.

At any rate, Mr. Ryan has always treated premium support as a guide for compromise and negotiation, not dogma. The 2012 budget, renamed the Path to Prosperity, indexed the payments to general inflation, starting at $15,000 (the amount Medicare now spends per person). Unlike the earlier roadmap, the payments would only flow to government-approved coverage options. Mr. Ryan joined with liberal budget expert Alice Rivlin to link the payments to the growth of the economy plus 1%.

The 2013 House iteration uses a competitive-bidding formula worked out with Oregon Democratic Sen. Ron Wyden. Insurers and traditional Medicare, which would remain as is, would essentially participate in a reverse auction to price the coverage in a given region. The annual premium-support payment would be set at the second-lowest bid, and seniors who chose the cheapest plan would keep the difference.

Mr. Ryan’s critics claim to be technocrats, but they retain more faith in central planning than the empirical evidence supports. Their objections are really false fronts for their anti-market ideology of price setting and government control.

The reality is that the status quo that Democrats pretend is an alternative to “privatization” is already irretrievably gone and Medicare is already changing, for worse or for far worse. The Affordable Care Act pegs Medicare spending to the growth of the economy plus 1% with the crude across-the-board cuts to providers identified by Mr. Foster. A bureaucratic panel of 15 men and women will enforce the cap by decreeing how medicine should be practiced and how doctors and hospitals are organized.

Premium support is the only other plausible health-care choice, as well as the only way to pay for the promises government has made while still maintaining economic growth. The model has been tested in the real world, and it works: Not only does it already apply to members of Congress, it looks a lot like Medicare Advantage, whose private plans cover nearly a quarter of seniors, and the 2003 Medicare prescription drug benefit, whose premiums, amazingly for health care, won’t increase by even a dollar next year.

Mr. Ryan’s achievement has been to confront the greatest domestic political challenge of our time—the unaffordability of the entitlement state—and move a tangible and pragmatic solution to the center of the national debate. He even persuaded a politician as cautious and famously data-driven as Mitt Romney.

Paul Ryan: he was for Medicare reform before John Kerry was against it.

In a related item courtesy of TheNewMediaJournal.com, CNSNews.com details another ….

Debt Up $6.35 Trillion Since Ryan’s 2008 Prediction of Looming Bankruptcy

 

Rep. Paul Ryan, whom Republican presidential candidate Mitt Romney has picked as his running mate, told CNSNews.com four years ago, in August 2008, that the U.S. was heading toward bankruptcy on the fiscal path it was then following and that it would be “mindboggling” to make the problem worse by adding the sort of health-care plan that then-Sen. Barack Obama was advocating in his presidential campaign.

CNSNews.com asked Ryan: “If our country, if the federal government of the United States, stays on the fiscal path it is currently following, is the government going to go bankrupt down the road?” “Yes. We know that for a fact,” said Ryan. “All the actuaries, all the objective score-keepers of the federal government are predicting this. So, this much we know. What we know is our government is growing at an unsustainable pace and it will overwhelm our economy’s ability to pay the bills.”

Since CNSNews.com first published Ryan making this prediction on Aug. 4, 2008, the debt of the federal government has grown by $6.35 trillion — rising 66 percent, from $9,565,042,361,845.53 then to $15,915,814,457,919.46 now.

Ryan then pointed out that estimates by the Government Accountability Office at that time indicated that the U.S. government already faced $53 trillion in unfunded liability to pay the promises it had made through entitlement programs, including Social Security, Medicare and Medicaid. Each year the government put off dealing with these problems, Ryan said, the unfunded liabilities would increase by $3 trillion. To pay for these government promises without reforming the entitlement programs themselves, Ryan explained, would require imposing massive tax increases on future generations of Americans.

Ryan said he had asked the Congressional Budget Office to calculate what the tax rates would need to be on Americans of his childrens’ generation to pay for the entitlement promises the government had already made. “Well, what they told me was really startling,” said Ryan. “They said that the current low rate, the 10 percent bracket for low-income Americans, would have to go up to 25 percent. The middle-income tax rates for middle-income Americans would have to go up to 66 percent. And the top rate, which is what small businesses pay, would have to go up to 88 percent. Those would be the tax rates you would have to if you wanted to tax your way out of this problem. And if you did that, all experts conclude you would literally crash the American economy.”

If we continued down the fiscal road we were on, Ryan said, America would be bankrupted and the children and grandchildren of his generation would be forced into a lower standard of living than Americans have enjoyed in the past.

“What is happening is that these three entitlement programs — Medicare, Medicaid and Social Security—are going to basically to crowd out the rest of the federal budget,” said Ryan. “In about 30 years, they consume 100 percent of the budget. Right now, entitlements are about 60 percent of the federal budget. In about 20 to 30 years, the estimates are that they crowd out 100 percent of the federal budget.

“And we all know that we are going to have an army, we are going to have a navy, we are going to do these other things that the federal government does,” said Ryan. “So, that piles on top of it.”

And since we’re on the subject of piling on, Team Tick-Tock’s pet investment projects, made with our money for the benefit of their campaign contributors, continue to hemorrhage cash faster than a Bernie Madoff mutual fund, as this next forward from Bill Meisen and the DetroitNews.com confirms:

Treasury: U.S. to lose $25 billion on auto bailout

 

The Treasury Department says in a new report the government expects to lose more than $25 billion on the $85 billion auto bailout. That’s 15 percent higher than its previous forecast. In a monthly report sent to Congress on Friday, the Obama administration boosted its forecast of expected losses by more than $3.3 billion to almost $25.1 billion, up from $21.7 billion in the last quarterly update.

The report may still underestimate the losses. The report covers predicted losses through May 31, when GM’s stock price was $22.20 a share. On Monday, GM stock fell $0.07, or 0.3 percent, to $20.47. At that price, the government would lose another $850 million on its GM bailout.

The government still holds 500 million shares of GM stock and needs to sell them for about $53 each to recover its entire $49.5 billion bailout. At the current price, the Treasury would lose more than $16 billion on its GM bailout. The steep decline in GM’s stock price has indefinitely delayed the Treasury’s sale of its remaining 26 percent stake in GM. No sale will take place before the November election.

Treasury spokesman Matt Anderson said the costs were still far less than some predicted.

Yeah….but far more than was advertised to the public at large.  Nor were the facts GM and Chrysler could have achieved a far more effective fiscal reorganization without government intervention; the only difference being the only shave would have been taken by the UAW rather than private bondholders.

Why is it when we read Mr. Anderson’s words, we’re reminded of the innumerable times TLJ has returned from shopping celebrating….

….all the money she saved!  Yeah….

Next up, courtesy of the WSJ, Bret Stephens recalls another important, equally unheralded Ryan distinction:

Paul Ryan’s Neocon Manifesto

America’s real interests, he understands, come from our deepest values.

 

Last summer, the chairman of the House Budget Committee made a foray into foreign-policy land with a speech to the Alexander Hamilton Society in Washington, D.C. About 100 people showed up, and it got next to no coverage. That should now change—and not just because Paul Ryan’s views on America’s role in the world are no longer a matter of one Wisconsin congressman talking.

Here, in CliffsNotes form, is what the speech tells us about Mr. Ryan. First, that he’s an internationalist of the old school; in another day, he would have sat comfortably in the cabinets of Harry Truman, Jack Kennedy or Ronald Reagan. Also, that he believes in free trade, a strong defense, engagement with our allies—and expectations of them. Also, that he wants America to stay and win in Afghanistan. Furthermore, that he supports the “arduous task of building free societies,” even as he harbored early doubts the Arab Spring was the vehicle for building free societies.

It tells us also that Mr. Ryan has an astute understanding of the fundamental challenge of China. “The key question for American policy makers,” he said, “is whether we are competing with China for leadership of the international system or against them over the fundamental nature of that system.”

What Mr. Ryan’s speech really tells us, however, is that he knows how to think.

Most foreign-policy speeches by American politicians take the form of untidy piles of verities and clichés. Here, for example, is Barack Obama on China: “As we look to the future, what’s needed, I believe, is a spirit of cooperation that is also friendly competition.” Here he is on the U.N.: “The United Nations can either be a place where we bicker about outdated differences or forge common ground.” Here he is to the British Parliament: “The time for our leadership is now.” (Here he is on everybody else!)

Mr. Ryan doesn’t have the president’s reputation for eloquence. Nor do his speeches ride on the windy drafts of “Yes We Can.” But unlike Mr. Obama, his speeches communicate ideas and arguments, not pieties and emotions.

Thus this speech begins not with a cliché but with a contention: “Our fiscal policy and our foreign policy are on a collision course.” It proceeds, briefly, to demonstrate the point quantitatively: Defense spending in 1970 consumed 39% of the federal budget but takes only 16% today. In the proverbial guns-to-butter ratio, our veins are already clogged.

Next there is history. Why can’t the U.S. simply cede the cumbersome role of world policeman to somebody else? Didn’t Britain do as much in the 1940s? It did. Yet, “unlike Britain, which handed leadership to a power that shared its fundamental values, today’s most dynamic and growing powers do not embrace basic principles that should be at the core of the international system.”

That’s not a novel insight, exactly, but it’s something that needs to be said and is said only rarely. Similarly with Mr. Ryan’s next point: American exceptionalism isn’t a type of jingoism. Instead, it derives from the fact that it was the first nation born of an idea, and from an idea that is true not only for Americans. “America’s foundations,” he says, are not our own—they belong equally to every person everywhere.”

So what follows? “If you believe these rights are universal human rights . . . it leads you to reject moral relativism. It causes you to recoil at the idea of persistent moral indifference toward any nation that stifles and denies liberty, no matter how friendly and accommodating its rulers are to American interests.”

Note the consistency of the logic. Note the quality of the language. Note, finally, Mr. Ryan’s understanding that America’s real interests are derived from our deepest values. For most other countries, it’s just the opposite: The interests come first, and “values” are a synonym for justifications.

None of this means that Mr. Ryan is a foreign-policy crusader. He talks of a “healthy humility” about the degree to which the U.S. can “control events in other regions.”

Yet humility should not be a prescription for passivity or fatalism. Speaking of the U.K., he notes the extent to which its postwar leaders chose their own diminished fate: “Once they concluded that they should manage Britain’s decline, it mattered little what Britain was objectively capable of achieving on the world stage. The crisis of self-perception was fatal to Britain’s global leadership.”

What kind of congressman speaks—and maybe even writes—sentences like these? When Mr. Ryan gave the speech, in June of last year, Congress and the Obama administration were gearing up for their epic budget grudge match. He had no inkling he’d be the vice presidential nominee in 14 months and had probably already decided he didn’t want to run for president. Which means he could easily have fobbed off the Hamilton Society with GOP platitudes about “keeping America strong.”

Instead he delivered one of the most thoughtful speeches in years about America’s global role and the means required to maintain it.

What a great thing he’s on the ticket. Pity he’s not at the top of it.

Yes, more’s the pity.  But in the real world, you have to dance with the girl that brung you; and Ryan didn’t elect to endure the grind of running for the top spot.  Mitt should be eternally grateful he didn’t.

Meanwhile, as FOX News reports….

Republicans tally Obama’s broken promises as November
nears

 

On the Lighter Side….

Then there’s this helpful primer for understanding Libspeak….

….as well as this classic billboard, courtesy of G. Trevor, Lord High King of All Vietors and our old friend and classmate Paul Croisetiere:

Finally, we present the culmination of our Military leadership’s deal with the Devil:

Submarine commander sunk after allegedly faking death to end affair

 

A Navy submarine commander is in hot water after he allegedly faked his death to end an extramarital affair. Navy Cmdr. Michael Ward II, 43, met the 23-year-old woman on a dating website last October, according to the Connecticut newspaper the New London Day. Ward, who is is married with children, told the woman he was separated and worked in special ops, the paper reported.

When Ward, who had only been named commander of the USS Pittsburgh a week earlier, realized he was in too deep, he allegedly contacted the woman by email purportedly from a co-worker named Bob. The email read:

“I am extremely sorry to tell you that he is gone. We tried everything we could to save him. I cannot say more. I am sorry it has to be this way.”

“He loved you very much,” ‘Bob’ continued. He goes on to say that Ward wanted her to have something.

On July 9, she drove to Ward’s house in Burke, Va., to pay her respects, only to find out from the home’s new owner that Ward had just relocated for his new job. The Chesapeake, Va., woman said she contacted the Naval Criminal Investigative Service about the incident and provided copies of text messages and emails between her and Ward to The Day. Text messages read “I want you, but I don’t know how to make this all perfect,” and “I love you and I always will,” according to The Day.

“I don’t want revenge here,” the woman told The Day. “I want everyone to know the truth about Michael. He does not need to be commanding a submarine. He’s a deceitful man.”

Ward has since been reassigned to administrative duties because of the incident.

“Our Navy has a very clear and unambiguous standard regarding the character of our commanding officers, spelled out in the Charge of Command. I reviewed this charge with Cmdr. Ward before he assumed command. He understood the Navy’s high standards for command leadership and he failed to uphold them,” Navy Capt. Vernon Parks said in a press release.

Which consist of what….based on what?  Believe it or not, despite the rescission of “Don’t Ask/Don’t Tell”, adultery remains a violation under the Uniform Code of Military Justice (UCMJ), as it runs contrary to the best interests of unit integrity and discipline; hence, it adversely impacts a unit’s military effectiveness.  But why?

The only reason the UCMJ ever considered adultery, or lying for that matter, an offense was Judeo-Christian teachings which held it to be a sin.  But as Judeo-Christian teachings have now been declared homophobic and contrary to the free expression of those more interested in flaunting their sexuality than serving their country, on what basis does the Navy dismiss a CO who lied to a Tidewater version of Sandra Fluke while committing what should clearly no longer be considered aberrant behavior?

Indeed, what now constitutes the basis for the Navy’s code of conduct?  The whims of mere men….subject to whatever Liberal attitudes prevail at the time.

Consider recent comments by the Chief of Naval Operations, Jon Greenert; he begins by affirming the Navy’s primary mission to be, at least for the moment….

“….Right now the warfighting has to be first. Because if we can’t get that done, then we will not be successful, and that’s what we owe to this country. That’s how this country will evaluate us, if we are effective warfighters.”

He then tempers his commitment to martial supremacy by extolling the virtues of “diversity”, which in our experience has nothing whatsoever to do with “warfighting”:

“….In aviation, Admiral Myers is developing ways to screen candidates that can more easily have a level playing field. What does that mean? (We haven’t a clue….other than it runs contrary to maximizing the Navy’s effectiveness as a fighting force!) That means, I don’t know about you all but I’ve never been near an airplane as a kid, up through my teenage years. I grew up in Pittsburgh. And I may have gone to an airport, but I wasn’t in the cockpit of an airplane. So if somebody says hey, want to be a naval aviator? I’d say oh yeah, sure. I’ve never been in an airplane. What is that like? Then you go in the first time, and scared and focusing on being in the Navy, there’s no level playing field. So he’s working on getting folks, including people of different culture and background as an example, in an airplane. Get them in the cockpit. It’s kind of fun. “I should do this, it’s something that I wanted to do and now I know I can do.‟ It’s leveling that playing field.”

Funny….we’re not aware the Russians or Chinese have any interest in “leveling the playing field”.  Nor do the Israelis, pound-for-pound, ounce-for-ounce the greatest fighter pilots in the world, because they practice like they fight.

And we’ve been there, done that….without the benefit of any prior aviation experience beyond our transport from Rochester, NY to Friendship Airport via Mohawk Airlines prior to our immersion in the Naval Academy and eventual transfer to Pensacola for flight training.

Two of the best pilots with which we were ever privileged to fly hailed from North Dakota, hardly a seed-bed of well-practiced aviators.  Should they somehow have been second in line behind others based on the pallor of their skin?  And if so, would national defense have been served by their demotion?

We personally witnessed the Navy’s efforts in the early ’80’s to push through one minority F-14 aviator, whose almost-certain demise was mercifully arrested when the last RIO in his squadron finally refused to fly with him.  The Navy’s singularly-unqualified choice as the first female Tomcat pilot wasn’t as lucky.

Here’s the juice: “warfighting” and “diversity” are mutually exclusive goals; and one more reason the November election is truly about America’s future.

Magoo