In response to a Congressional Budget Office report projecting ruinous increases in spending and taxes to maintain promises in the Social Security, Medicare, and Medicaid programs, Rep. Paul Ryan (R-WI) announced A Roadmap for America’s Future, which he said he will turn into legislation.
“Washington is broken, and has yet to face up to our most pressing domestic challenges. My Roadmap for America’s Future will fulfill the promise of health and retirement security, lift the crushing burden of debt we’re passing to our children, and will strengthen American jobs and competitiveness for the twenty-first century,” Ryan said in announcing his plan.
Ryan said major components of the proposal will focus on health care, Medicare, Social Security, and tax reform. Here are the highlights as outlined by Ryan’s office in late May:
Health Care
- Ensures universal access to affordable health insurance by restructuring the tax code and shifting ownership of health coverage away from the government and employers to individuals.
- Provides a refundable tax credit–$2,500 for individuals and $5,000 for families–to purchase coverage in any state and keep it with them if they move or change jobs.
- Establishes transparency in health care price and quality data, so this critical information is readily available before someone needs health services.
- Modernizes Medicaid and strengthens the health care safety net by reforming high-risk pools, giving states maximum flexibility to tailor Medicaid programs to the specific needs of their populations. Allows Medicaid recipients to take part in the same variety of options and high-quality care available to everyone, through the tax credit option.
Medicare
- Transitions the program to allow beneficiaries to choose the most affordable coverage to suit their needs.
- Preserves the existing Medicare program for those 55 or older.
- For those under 55, creates a Medicare payment of up to $9,500, adjusted for inflation and based on income, with low-income individuals receiving greater support. It is also risk-adjusted, so those with greater medical needs receive a higher payment.
- Establishes and fully funds medical savings accounts (MSAs) for low-income beneficiaries, while continuing to allow all beneficiaries, regardless of income, to set up tax-free MSAs.
- Makes Medicare permanently solvent, based on consultation with the Office of the Actuary of the Centers for Medicare & Medicaid Services.
Social Security
- Preserves the existing Social Security program for those 55 or older.
- Offers workers under 55 the option of investing more than one-third of their current Social Security taxes into personal retirement accounts, similar to the Thrift Savings Plan available to federal government employees. Includes a property right so they can pass on these assets to their heirs, and a guarantee that total benefits from the personal accounts will not be less than they would have been under the current system.
- Combined with a more realistic measure of growth in Social Security’s initial benefits and an eventual modernization of the retirement age, makes the program permanently solvent, according to the Chief Actuary of the Social Security Administration (SSA).
Tax Reform
- Provides individual income tax payers a choice of how to pay their taxes–through existing law, or through a highly simplified code that fits on a postcard with just two rates and virtually no special tax deductions, credits, or exclusions (except the health care tax credit).
- Simplified tax rates are 10 percent on income up to $100,000 for joint filers and $50,000 for single filers; and 25 percent on taxable income above these amounts. Also includes a generous standard deduction and personal exemption (totaling $39,000 for a family of four).
- Eliminates the alternative minimum tax (AMT).
- Promotes saving by eliminating taxes on interest, capital gains, and dividends; also eliminates the death tax.
- Replaces the corporate income tax–currently the second-highest in the industrialized world–with a border-adjustable business consumption tax of 8.5 percent. This new rate is roughly half that of the rest of the industrialized world.
For more information …
Wisconsin Congressman Paul Ryan’s “A Roadmap for America’s Future”: http://www.house.gov/ryan/press_releases/2008pressreleases/52108roadmap.htm
