Medicare, Healthcare & The Economy

Mon 20 Jun 11 | 07:40 AM ET

The following transcript has not been checked for accuracy.

more than enough to keep you going with know ham nmohammed e. that state you come from, that's a great state about. a day spent in wisconsin, that's a good kay. day. you have to go that far to find something you agree on about. yeah, that's 3r0eprobably wh the agreement will end. i was listening and i'm actually very happy to have an opportunity to talk to you because i think you're one of the most articulate purchaveyorf a set of ideas that is largely discredited. i'm going to be broad and then i'll get specific. because i know you deal in the weeds and that's another thing i like about you. what you described sounds like a whole lot about trickle down economics. didn't work in the '80s or the 2000s. the idea of slashing spending, hurting the most vulnerable people in the economy by cutting medicare, college tuition, food stamps. and at the same time, criticize class warfare, to me, this is robinhood in reverse. this is your own version of class warfare. and at the same time, you cut hundreds of billions of taxes for those at the high end. so it looks a lot like robinhood in reverse. let me give issue specifics. it's a very market oriented set of ideas as you very clearly articulated. i'm an economist, i very much believe that groowth is the way to go. but what we've seen in the past is when you go this route, what you end up is less income for middle class people, fewer jobs for middle class people, a deregulatory climate that hurts financial markets and leads people vulnerable a that front, as well. you give people an inadequate voucher for medicare so they're unable to achieve retirement security and you slash away at the programs that people depend on. so that's my overview what have i'm hearing. trickle down didn't work before, won't work again. and can i say one other thing? an unwillingnesses to negotiate with the democrats on the issue of revenues as becky was addressing with you and i think one place where i'd like to talk about is spending through the tax code. all right. gosh. do i get for respond to all of that? if we want to get into the discredited thing, you're the guy who put out the economic model and multiplier that said the stimulus spend would go prevent unemployment from ever getting to 8%. now it's 9.1s%. so where are all the jobs? you're ducking the criticism. hang on a second. i just fundamentally disagree with the premises from what you come. and we all know that. i just don't think you can sit in washington and micro manage the u.s. economy through the regulatory state and economic redistribution through the tax code. we what we want is a pro growth economy. we are no locker in the 20th century. so our tax rates matter. here is where we might agree. we believe just like the fiscal commission which i served organization i didn't vote for the final product, but we believe lowering the tax base. it means getting rid of what you call spending through the tax code. i have a different take on how you described that. more importantly, though, i don't think we should sit around in washington and pick winners and losers through tax expenditures. so in exchange, let's lower our tax rate but this is not trickle down where we think that some rich guy sitting on a yacht is going to just maybe spend money to help create jobs for people. what we want to do is remove barriers to growth. we believe in the characteristic of equal opportunity, upward mobility and economic prosperity based on an entrepreneurial free enterprise climate that helps businesses get created. that helps people get more prosperity. now, where are the facts? the facts are every time you keep raising tax rates, you slow down economic growth. you can give us some evidence say the clinton tax be ins and we had ploss pas prosperity aft time. we can't keep going down that path. we're taxing our businesses more than our foreign competitors. we have to be mower competere c. but let's not have a system where we sit around in washington and pile on more spending at the expense of the next generation, at the expense of the credit market which is are getting unstable. let's show the world that america can get its fiscal house in order. by the time my kids are my age, spending will be twice the level of shared gdp than it is today. the problem is spending, not taxes. let's get down into the weeds here. you talk about lowering the base -- broadening the base. broadenings base and lowering the rate. and i think we can agree. obama agrees that's a good idea, too. every dollar you take from that, you turn around and you give it to folks at the high end. and that's one way of going -- lowering rates for everybody. that's one wave going if you really believe in trickle down and if you weren't whacking the heck to the tune of $3 trillion taking that out of the low end. i would disagree. the fiscal commission said let's have a top tax rate of 26%. we're saying 25%. some democrats agree with us. and we're not talking about lower top rate, we're talking about lower rates across the board. there b they used a higher revenue line. and you talk about you don't want to pick winners. when you support repatriation, you're picking winners. you're picking multinationals as winners. the tax code picks winners all the time. you're just as guilty of that. i don't like it either and i don't think -- so we want to keep having losers where they keep their money overseas? i don't want to pick any winners. let's talk about this through the tax code. let's me use an example bob green stein likes to use. i want to hear what you have to say about this. so if i have a tax credit for a millionaire to get child care tax credit, that's something that we're going leave in the code because that's okay. that would be raising taxes. excellent point. but a child care sub city did i for low income people, that's spending and you want to cut that. to me they both look like spending. so let's deal with both of those. so excellent point. what we're saying is look at who uses tax shelters in america today. people in the top two tax brackets. we're saying for every dollar in that tax shelter that's taxed at zero, get rid of the shelter and lower the tax rates for everybody. whether it's 25% or whatever. so you're actually subjecting more of that higher income earner's income to taxation. so what we're saying, close those loopholes so you can lower the rates on everybody and have a better economy. look, where i come from, most jobs come from subchapter s corporations, partnerships. under the corporate law, top tax rate goes to 84%. in wisconsin, you throw your income tax on top of that, we're over 50%. how on earth can you have economic growth? i want to get to the voucher thing. you're saying we're giving a voucher to people for medicare. we're talking about premium support which used to be an idea that democrats championed. this is not a voucher approach where you get a check in the mail and then you buy something and you're on your own. this is a medicare exchange where medicare gives joe when you turn eligible a list of options like it works today. you pick your plan that you can't be denied that medicare pre-screens just like federal employees do. here's the point on the trickle down point. we're saying don't subsidize the welly person as much. tar get your spending, your taxpayer reallocated federal government intendspending to tho need it the most. less money for the wealthy. that is a far better way instead of spending more money on everybody in society. here's the problem with that. i don't think there's any -- premium support may be a fine idea about if it's actual premium support. what your voucher comes in at coop to the congressional budget office is $6,000 below what seniors would currently need to actually afford medicare. so what you're hoping to do is by giving less money to shop for insurance on their own that somehow you'll magically change the system. but insurance companies don't respond. worse your voucher loses value. so it's not cost saving. jared, what's your alternative plan? the alternative plan is the ipad. thank you. exactly. it's not cost shifting like tapping the cost burden and putting it on to individuals, retirees. good luck shopping for insurance. it's cost savings. and the only way you do that is exactly as mr. ryan said which is cost effectiveness through the independent payment advisory board which has to get under the hood, look at how we're wasting money, which we do. we can agree on that. there's a lot of waste. not worse than the private sector. it is. private sector health care costs grow more quickly than public. i think representative ryan would kroocorroborate that. the amount of fraud is much higher. that is a prejudice. can i send send you the numbers. 60 minutes did a huge report on the amount of fraud in medicare. about if i send you shall graphs, maybe you can put them up. do you a good job of representing your side's point of view. and here's what the ipad is. 15% the president appoints to be in charge of medicare financing, price controlling, designing new payment structures. the lesson i think from the ipad was the 1977 law didn't really work, so congress passed two trying to put the money back into the system. here's the lesson we learned. price controls don't work. what i think jared's side of view is that, no, price controls you have to get outside of the politicians. price controls don't work because politicians lose their will. so this ipad circumvents congress, puts the recommendations in place without congressional consent. and they have to replace the price controls somewhere else in an equal amount. what i'm saying is the difference here is we don't think medicare or any health care system should be organized by a handful of unaccountable and unelected bureaucrats imposing price controls. we believe in a consumer directed system. and we believe that this system should be one where we empower seniors to be good consumers with money, that means more for the poor and sick, less for the wealthy in, a system where the nucleus is the patient, not some distant unaccountable government. jared, it has to be fast. representative ryan loves to call those folks faceless government bureaucrats. and he does a good job of defending his side of the case. what he wants to do is turn this over to faceless insurance side bureaucrats who have consistently failed to control costs. cost shifting simply giving people an inadequate amount of hone to shop for this on their own has never worked. the only way we'll crack this nut is too g get under the hod.d if it doesn't work, representative, we will try something different. but please give it a chance. we're out of time. somebody wrote in that child tax credits are based on income and credit. and letting the wealthy keep their own money and calling that a reverse robinhood, does the vice president think you start at 1100% and whatever you -- when you take $3 trillion out of middle class and poor programs and you give another trillion to the high he said, the only group actually doing well, yeah, it's class warfare. reverse robinhood. thank you.