Wednesday, December 15, 2010

Governor Palin on the Issues: Entitlement Programs; Updated



“I think if you want to expand your base, you have to get into policy even though it sounds dull.”
-Charles Krauthammer in regards to Governor Palin's 2012 Presidential potential (see beginning at the 2:18 mark of the following video)




This is the second in a series of posts outlining Governor Palin's stance on policy issues, and this one is dedicated to Charles Krauthammer who apparently hasn't been paying very close attention. Prepare to be bored! You can see the first "On the Issues" post on monetary policy here. This second post will address Governor Palin's stance on entitlement programs.

Governor Palin has recently emphasized the need to reform entitlements. In a recent interview with Time Magazine, she emphasized the need to address entitlements as a means to get America's fiscal house in order:
I'd also look for entitlement reform, as well as a system-wide audit of government spending with a goal to move us toward zero-based budgeting practices and ultimately a balanced budget. We need to start really living within our means. As any mother or father will tell you, you don't spend what you don't have. And if the argument against this is that the government is too big and unruly to even consider such an audit, then I say that that alone is all the proof you need that our government has grown completely out of control and desperately needs to be reined in.
She also expressed strong support for Congressman Ryan's "Roadmap for America" juxtaposed against President Obama's Debt Commission findings in a Wall Street Journal op-ed last week. She discusses Ryan's solutions for Social Security and Medicare:
In my view, a better plan is the Roadmap for America's Future produced by Rep. Paul Ryan (R., Wisc.). The Roadmap offers a reliable path to long-term solvency for our entitlement programs, and it does so by encouraging personal responsibility and independence.

[...]

On Social Security, as with Medicare, the Roadmap honors our commitments to those who are already receiving benefits by guaranteeing all existing rights to people over the age of 55. Those below that age are offered a choice: They can remain in the traditional government-run system or direct a portion of their payroll taxes to personal accounts, owned by them, managed by the Social Security Administration and guaranteed by the federal government. Under the Roadmap's proposals, they can pass these savings onto their heirs. The current Medicaid system, the majority of which is paid for by the federal government but administered by the states, would be replaced by a block-grant system that would reward economizing states.

Together these reforms help to secure our entitlement programs for the 21st century. According to the Congressional Budget Office (CBO), the Roadmap would lead to lower deficits and a much lower federal debt. The CBO estimates that under current spending plans, our federal debt would rise to 87% of GDP by 2020, to 223% by 2040, and to 433% by 2060. Under Rep. Ryan's Roadmap, the CBO estimates that debt would rise much more slowly, peaking at 99% in 2040 and then dropping back to 77% by 2060.
In supporting Congressman Ryan's plan, Governor Palin advocates for reforms in Medicare and Social Security that give individuals greater control over their own money, as working Americans pay social security and medicare taxes, by giving them the option manage their own personal accounts. Governor Palin advocated another means of Medicare reform in the Fall of 2009 during health care reform discussions (emphasis mine):
Instead of poll-driven "solutions," let's talk about real health-care reform: market-oriented, patient-centered, and result-driven. As the Cato Institute's Michael Cannon and others have argued, such policies include giving all individuals the same tax benefits received by those who get coverage through their employers; providing Medicare recipients with vouchers that allow them to purchase their own coverage; reforming tort laws to potentially save billions each year in wasteful spending; and changing costly state regulations to allow people to buy insurance across state lines. Rather than another top-down government plan, let's give Americans control over their own health care.

This reform would give patients greater flexibility and would save American taxpayers money. Michael Cannon, whom Governor Palin referenced, said this regarding Medicare vouchers:
"Vouchers would not make seniors less secure, it would make them more secure," Cannon told ABC News. "Everyone agrees that Medicare cannot go on spending as much money as it does now. The voucher idea allows individual consumers to make their own decisions about what they need and what they don't need."

"Giving Medicare seniors a voucher is the most rational, the most humane way to contain Medicare spending," he added.
She also advocates a plan for Medicaid which incentivizes states to budget more frugally and efficiently as suggested in Ryan's plan . What effects would these reforms have? They would "lead to lower deficits and much lower federal debt". Governor Palin often refers to deficit, out -of-control spending and massive debt as generational theft. Borrowing from future in order to pay for today's entitlement is indeed stealing from our kids and grandkids. It's also the ultimate display of taxation without representation, as future Americans will be paying for past entitlements without having representation to approve this spending.

Governor Palin not only has opinions on entitlement policy; she also has a strong record on dealing efficiently with Medicaid on a state level. Medicaid is a program funded and managed on both a state and federal level. Due to federal restrictions, assessments to see if elderly patients qualified for Medicaid funded home health care assistance had to be taken over by the state as no other contractors could bid. The federal government stopped accepting new patients due to the backlog of individuals to be assessed for assistance. By FY2009, Governor Palin's administration had reduced the backlog of assessments from 30.5% in her predecessor's FY2005 and 4.5% in FY2008 during her administration.

The FY2011 budget is still being discussed in the Senate, but the FY2010 budget included $1.9 trillion dollars in non-discretionary (Medicare, Medicaid, and Social Security) spending, which is equivalent to 55% of the federal budget. Through their taxes, people have paid into Medicare and Social Security over time. It is smart, as Congressman Ryan and Governor Palin have suggested, to allow for greater personal responsibility and flexibility for these programs. Additionally, these reforms would help decrease the national debt to help secure America's future and solvency.

I hope this was dull enough for you, Mr.Krauthammer.

Update: I neglected to previously include that Governor Palin strongly encouraged incoming members of Congress to address entitlement reform in a Facebook post last month:
In order to avert a fiscal disaster, we will also need to check the growth of spending on our entitlement programs. That will be a huge challenge, but it must be confronted head on. We must do it in a humane way that honors the government’s current commitments to our fellow Americans while also keeping faith with future generations. We cannot rob from our children and grandchildren’s tomorrow to pay for our unchecked spending today.

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