Paul Ryan's budget asks little sacrifice of baby boomers

House Budget Committee Chairman Paul Ryan, R-Wis., works with Republican members of the committee on Capitol Hill in Washington, Tuesday, April 5, 2011. At right is committee member Rep. Tom McClintock, R-Calif. (AP Photo/J. Scott Applewhite)
House Budget Committee Chairman Paul Ryan
House Budget Committee Chairman Paul Ryan, R-Wis., works with Republican members of the committee on Capitol Hill in Washington, Tuesday, April 5, 2011.

Updated 6:09 p.m. Eastern Time

The Republican budget plan released Tuesday proposes to make dramatic changes to the Medicare program which provides health care for older Americans. Under the current system, the government reimburses doctors and hospitals for certain medical services; under the House GOP plan, seniors would purchase a private health care plan among numerous options on an exchange. The government would then pay the private insurer in the form of a subsidy up to a specified amount.

Republicans say this means lower costs through increased competition and better-used resources; Democrats (as well as the AARP) complain it amounts to deep cuts to Medicare recipients. "Under the House plan, seniors' coverage would be cut drastically, benefits would no longer be guaranteed and seniors' costs would skyrocket," Sen. Max Baucus said Tuesday. "We can't allow the House to balance the budget on the backs of seniors and we won't - not on my watch."

But today's seniors are actually not directly affected by the House GOP's plan. As GOP budget guru Paul Ryan said on CBS' "The Early Show" Tuesday morning, "we're proposing no changes for people 55 and above."

That means that under the proposal most of the post-World War Two "baby boomers" - Americans born between about 1946 and 1964 - would get the benefits promised them, while the rest of Americans would have to accept cuts. Not only that, but Ryan's House GOP wants to reverse the cuts to Medicare included in the health care overhaul law.

Indeed, until the Ryan plan was released Republicans were casting themselves as Medicare's defenders, campaigning in the midterm elections on opposing Medicare cuts and complaining Democrats "betrayed" seniors by supporting them.

The House GOP proposal prompted outrage from economist Larry Littlefield, who railed in a blog post against what he cast as a giveaway to a generation that has already gotten more than its fair share.

"The richest generations in American history, the first to leave those coming after worse off in the private sector, the ones that created all those deficits and debts and unfunded pension obligations in the public sector, the ones who wanted more senior spending and less in taxes, Generation Greed, gives back nothing," he wrote.

That, of course, is a little hyperbolic: There is a legitimate argument that older Americans deserve to be exempted because, unlike younger Americans, they will not have enough time to take the proposed changes into account in preparing for retirement. Special Report: Health Care and Medicare

And the House GOP will tell you that exempting older Americans is necessary because a major overhaul like this must be phased in gradually; they can point to the health care overhaul law to prove their point, since many major provisions don't kick in until 2014.

But Republicans have a political reason to exempt older Americans, too. They are a voting bloc that tends to support the GOP - according to CBS News exit polling, 59 percent of voters 65 and older voted Republican in the 2010 midterm elections, and older Americans were disproportionately represented in the electorate. Republicans who are already skittish about the political ramifications of taking on entitlement programs don't want to lose these voters, and ensuring them that they will not be impacted by the proposed changes to health care (if they don't want to be) is a good way to do that.

Yet consider this: Traditional Medicare recipients could still ultimately find themselves paying higher premiums if the House GOP plan is enacted. That's because cutting off entrants into traditional Medicare would presumably result in an increasingly older and less healthy pool of Medicare recipients, something that could lead to higher premiums for those remaining in the system.

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