He may enjoy pushing old ladies off of cliffs, but few can argue that Paul Ryan is one of the hardest working proponents for economic reform in Congress. Considering that the last time Democrats passed a budget there was no such thing as an iPad and gas was $1.84 per gallon, Ryan’s touted “Roadmap for America’s Future 2.0,” combined with his budgets passing the House the last two years running (albeit the House is controlled by his own party) make this point hard to argue.
Compared to recent healthcare legislation, Ryan’s “Roadmap” is shorter than Chelsea Clinton’s run as an NBC commentator. But despite its relative brevity, we decided to scan the seventy plus pages and highlight how his plan may affect you.
The current Administration has promised us that Obamacare will bring us closer to universal healthcare access than any other plan. Ryan’s plan promises the same, but by taking a different route, one that will not add to the deficit.
Under the Ryan Plan anyone will be able to purchase coverage in any state and take it with them when they move. Economic principles dictate that free and open competition generally brings costs down and efficiency of service and production of goods up. Some economists believe that costs have been rising in recent years partially due to an increased number of regulations within the industry, something Republicans plan to change.
Ryan’s healthcare plan also calls for a refundable tax credit of $2300 for individuals and $5700 for families (even if you have no tax liability the IRS will still return this money to you), along with continuing full coverage for the lowest income brackets.
Medicare and Social Security
The trustees of Medicare, including Obama appointee Kathleen Sebelius, suggest in their annual report that Medicare may be insolvent by 2016 (after sifting through the Politicanese) under current law. According to the CBO, as well as the Actuary of Medicare, Medicare will remain permanently solvent under the Ryan plan.
Contrary to popular belief, proposed changes will not affect anyone 55 or older. Ryan’s plan is intended to change Medicare only for those under that age, pegging total costs to income, with low-income individuals having access to “Medical Savings Accounts” to cover out-of-pocket costs.
If you’re over 55, Social Security will change less than a Cuban used car lot. Under 55? Well, yours won’t change either . . . unless you opt for the opportunity to invest a portion of your Social Security taxes into a personal retirement account. The added bonus is that this new Social Security system will have only upside potential and is protected against losses by a minimum guarantee equal to the old system. Lower costs for the government, greater potential returns for Americans: it’s a win-win.
Taxes and Death
Two facts of life. But what if you could have a choice between the current tax code (even with an MBA, advanced studies in both law and economics, and TurboTax, I botched my recent year’s taxes) and a simple 10% tax rate? I’m not lazy, but I would have probably gone with a simple 10% tax over the day-long wrestling match I had with 2011, the ensuing migraine, and eyes more bloodshot than a dreadlocked “occupier.”
As concerning as it is that loopholes have allowed for GE-type profits combined with a zero tax liability, the current labyrinthine system is to blame, not the tax rate. According to the Ryan plan, reducing the highest corporate tax rate in the world would return jobs to America, maintain manufacturing within our borders, lower costs to consumers, increase competition, and boost employment. Just ask Google, PayPal, Bank of New York, Citigroup, MasterCard, Facebook (oh yes, the list goes on), etc. who have all moved their headquarters or significant portions of operations to Ireland within recent years to reduce their tax burdens.
Ryan may not be planning to push Grandma off a cliff, but if he and Romney have anything to do with it, Ryan-esque economics will be jostling the economy in a new direction soon enough.
JUSTIN VELEZ-HAGAN is a Senior Contributing Writer and Commentator for Politic365.com. He is also the National Executive Director of The National Puerto Rican Chamber of Commerce, an Adjunct Instructor of Economics with the University of Maryland-University College, and an international developer of senior living facilities. He can be reached at Justin@Politic365.com.