On Sept. 21, 2012, AARP welcomed President Barack Obama via live satellite and Republican vice presidential nominee Paul Ryan in-person to address AARP members at the AARP National Event & Expo, Life@50+, in New Orleans.
Prior to the appearances by President Obama and Congressman Ryan, the audience was welcomed by AARP Chairman A. Barry Rand and journalist Jane Pauley, who moderated the question and answer session.
Congressman Paul Ryan: Hey, everybody, how are you? Thank you very much, appreciate it! Jane, everybody here, I appreciate the introduction, and this chance to be with you here in New Orleans. You’ve had a busy convention, and I know that many of you also made time yesterday to volunteer around this great city. It was very much in the spirit of a group whose motto calls members to the service of others. It’s also very much in the spirit of this generous country.
This country honors those who serve — and we have set aside today, as a nation, to remember those men and women in uniform who were taken as prisoners of war or went missing in action. To honor those who have endured this hardship, and to remember those who remain missing, I’d like to begin with a moment of silent prayer, if you will.
I thank you for that, and thank you for your kind hospitality this morning.
Life@50+. I’m not quite there yet, but I’m told that can happen before you know it. I’m a little more focused these days on my forties, and in particular on the next four years. But I have given a good deal of thought to later seasons in life, not just as someone with his own family to look after, but as someone with public responsibilities as well.
Many in Washington who held office long before I came along made some big and fundamental commitments. It will fall on my generation to make sure those commitments are kept. The challenges would be enormous under any circumstances; they are even tougher in a bad economy. Many Americans over 50 are wondering: Will I lose my job before I’m ready to retire? Will the health and retirement security programs I’ve been counting on be there for me? What will happen to my savings if the value of the dollar keeps going down? What kind of nation are we leaving to our kids?
You’re right to ask these questions. You’re right to worry that years of empty promises by both political parties are threatening the security of your golden years. And you’re right to demand honest answers from those who are asking for your vote.
Mitt Romney and I share your concerns. And we respect you enough to level with you. We respect all the people in this country enough to talk about the clear choices we face on Medicare, Social Security, the economy, and the kind of country our children will inherit.
I’ll warn you ahead of time — these are very serious challenges. Sometimes, the math can be a little bit overwhelming. Well, let’s just start with some simple subtraction: 2012 minus 50.
If you’re turning 50 this year, you were born in 1962 — the dawn of a new American era in politics: JFK … civil rights … Vietnam. By the time you were learning long division, Neil Armstrong was walking on the moon. Government was making new promises to older Americans. When Lyndon Johnson signed Medicare into law, he pledged, quote: “No longer will older Americans be denied the healing miracle of modern medicine. No longer will young families see their own incomes, and their own hopes, eaten away simply because they are carrying out their deep moral obligations to their parents, and to their uncles, and to their aunts.” You see, there are two sides to that promise — obligations to old and young alike. And we must honor both.
Today, our nation faces a political turning point. Government mismanagement and political cowardice are threatening both sides of LBJ’s pledge. Seniors are threatened by Obamacare, a law that would force steep cuts to real benefits in real time for real people. Meanwhile, younger Americans are burdened by an ever-growing national debt and a diminished future.
Here’s the good news: By embracing common-sense reforms now, we can get ahead of the problem and keep promises people have organized their lives around. You see, if we reform Medicare for my generation, we can protect it for those in or near retirement today.
The first step to a stronger Medicare is to repeal Obamacare, because it represents the worst of both worlds. [Crowd reacts] I had a feeling there would be mixed reaction, so let me get into it. It weakens Medicare for today’s seniors and puts it at risk for the next generation. First, it funnels $716 billion out of Medicare to pay for a new entitlement we didn’t even ask for. Second, it puts 15 unelected bureaucrats in charge of Medicare’s future. Let’s talk about each one of these in turn. You may not have heard this side of the story.
By now you’ve probably heard a lot of claims and counterclaims about the president’s raid on Medicare. The president said that this would actually strengthen the program. He said it would improve the program’s solvency. Ladies and gentlemen, that’s just not true.
The money wasn’t walled off to stay in Medicare. Instead, the law turned Medicare into a piggy bank for Obamacare. You don’t have to take my word for it. Ask the chief actuary at the Centers for Medicare and Medicaid Services. He works for the Obama administration, and his job is to look after your Medicare. Well, last year, we invited him to Congress to answer a simple question: If President Obama’s Medicare cuts were used to pay for new spending in Obamacare, how can they also improve Medicare’s solvency? His answer? They can’t. It’s simple: You can’t spend the same dollar twice. His exact words were, quote, “It takes two sets of money to make it happen.” President Obama spent one set on a government takeover of health care, and he never provided the other to strengthen Medicare.
So there it is, from the guy whose job it is to know. If anyone tries to tell you that Obamacare strengthened Medicare, just ask them, “Where’s the other $716 billion?”
But that’s not all the new health care law did. You see, Medicare is going bankrupt. Everyone understands this. Even President Obama said last year, quote, “If you look at the numbers, Medicare in particular will run out of money, and we will not be able to sustain that program no matter how much taxes go up.” End quote.
So the disagreement isn’t about the problem. It’s about the solution. You might have heard about the approach Mitt Romney and I would take, which I will lay out for you. But you probably haven’t heard much about what President Obama would do. The president doesn’t talk much about what Obamacare will really mean for seniors. And anyone who understands the details knows why: People don’t like it.
The president’s health care law set up something called the Independent Payment Advisory Board. It will be made up of 15 unelected bureaucrats. The president has said he that will appoint experts, but none of the 15 are required by law to have any medical training. And here’s the thing: As Medicare spending grows, this board is required to cut it. Unless Congress overrides these cuts with a supermajority vote, they automatically become law.
Think about what this means. I know AARP was just involved in the annual debate over the so-called doc fix. Back in 1997, Democrats and Republicans agreed to a budget deal that included large reductions in fees for doctors who treat Medicare patients. Well, it soon became clear that these cuts would make it impossible for many doctors to keep treating Medicare patients. So every year, like clockwork, Congress postpones the cuts.
Some of us learned a lesson from that experience: Top-down, bureaucratic cuts to Medicare just don’t work. Providers stop providing care. That’s what happens. Unfortunately, some Democrats, including the president, learned a different lesson: They never gave up on their belief in top-down, bureaucratic cuts. But they did learn that these cuts are very unpopular.
So Obamacare represents a first step in their new approach: They want to take responsibility for these cuts out of the hands of your elected representatives and give it to unelected bureaucrats. They want to let them make the decisions — and let them take the heat.
Here’s Medicare’s chief actuary again, on what that would mean: These cuts could be so severe, he said, that they could jeopardize access to care for beneficiaries. I deal with actuaries a lot as chairman of the House Budget Committee. They tend to be mild-mannered folks. So when one says something like that, here’s what it means in plain English: Red Alert — do not proceed with this plan.
But you know President Obama’s slogan, right? Forward. Forward into a future where seniors are denied the care they earned because a bureaucrat decided it wasn’t worth the money. So now you’ve got the full story about President Obama’s approach. Let me tell you what Mitt Romney and I believe — and what we will do if we are elected 46 days from now.
When I think about Medicare, I don’t just think about charts and graphs and numbers. My thoughts go back to a house on Garfield Street in Janesville. My wonderful grandma, Janet. She had Alzheimer’s and moved in with my mom and me. Though she felt lost at times, we did all those little things that made her feel loved. We had help from Medicare, and it was there, just like it’s there for my mom today. My mom is here with me today. She is a senior from Florida. That time in my life, when my Nana lived with my mom and me, is when we grew the closest. I’m very proud of my mom, and I’m happy she is having a great retirement. Medicare is a big part of her security.
Medicare is a promise, and we will honor it. A Romney-Ryan administration will protect and strengthen Medicare, for my mom’s generation, for my generation, and for my kids and yours. Our plan keeps the protections that have made Medicare a guaranteed promise for seniors throughout the years. And let me be clear, it makes no changes for those in or near retirement.
Now, in order to save Medicare for future generations, we propose putting 50 million seniors, not 15 unaccountable bureaucrats, in charge of their own health care decisions. Our plan empowers future seniors to choose the coverage that works best for them, from a list of plans that are required to offer at least the same level of benefits as traditional Medicare. This financial support system is designed to guarantee that seniors can always afford Medicare coverage — no exceptions. And if a senior wants to choose the traditional Medicare plan, then she will have that right. Our idea is to force insurance companies to compete against each other to better serve seniors, with more help for the poor and the sick and less help for the wealthy.
We’ve seen this kind of reform work in Medicare Part D, the program for prescription drugs. Choice and competition helped bring it in at 40 percent below cost projections. We’ve applied these lessons and improved upon them. And by the way, these aren’t just Republican ideas. Medicare reforms based on choice and competition go back to the Clinton administration. Experts from both parties helped form this plan. Democrats in Congress have supported these ideas. Mitt and I studied these bipartisan ideas. We looked at the numbers. And we came up with a plan to save this critical program.
We did the same thing with Social Security. We know it’s in trouble — and we know what’s at stake. If we do not act, today’s seniors will face a 25 percent, across-the-board benefit cut in the heart of their retirements. That’s current law. We also know what to do. Mitt Romney and I have put our own plan on the table. We will make no changes for those in or near retirement. And for my generation, we can make this program solvent by slightly raising the retirement age over time and slowing the growth of benefits for those with higher incomes.
All that we need now is leaders who have the political will to save and strengthen Social Security. But when it comes to protecting this program, President Obama has come up short. The president has no plan — and no plan doesn’t mean leaving Social Security as it is; it means letting it grow weaker. Inaction today will mean sharp cuts tomorrow. Time and again, this president has ducked the tough issues. He’s put his own job security over your retirement security.
Of course, he has said he’d be willing to work with Republicans. But he has not moved an inch closer to common ground. When it comes to bipartisanship, it’s easy to talk the talk. But there is only one man running for president this year who has actually walked the walk. That man is Mitt Romney, and let me explain why.
In a state where 87 percent of the state legislature was Democratic, Governor Romney got real results by reaching across the aisle, bringing people together, crafting solutions that got widespread support. That’s how he was able to turn a $3 billion budget shortfall into a $2 billion rainy-day fund. That’s how he was able to cut taxes 19 times and balance the budget in all four years. And that’s the kind of leadership we’re going to need if we’re going to save and strengthen Medicare and Social Security.
Protecting Social Security is personal to me. My dad died when I was 16. Social Security survivor benefits helped my family. They helped me go to school. They helped my mom start a new career. When dad died, my mom had recently entered her fifties — just like many of you. She got on a bus every weekday for years, and rode 40 miles each morning to Madison to go to school. She learned new skills to start her small business. It wasn’t just a new livelihood. It was a new life. And it transformed my mom from a widow in grief to a successful small-business woman. Her work gave her hope. It made our family proud. And to this day, my mom is my role model.
For people over 50, retirement security is part of a larger goal. Economic security is what we seek for all Americans. The last four years have been especially hard on Americans who are out of work, but not yet ready to retire. I’ve met men and women who are close to giving up hope that they’ll ever be employed again. Mitt has called long-term unemployment an economic emergency, and he’s right. We haven’t seen a recovery this bad in decades. For many Americans, there’s been no recovery at all.
For people who find themselves without a job before they’re ready to retire, starting or joining a small business offers a promising way to bridge the gap, just like my mom did. But President Obama’s policies have made it harder for small businesses to thrive.
The president likes to talk about how he is a champion for small business on the basis of a few temporary tax measures. But the truth is, if reelected, he has actually promised to raise the tax rates that many successful small businesses pay to over 40 percent — permanently.
Mitt and I just think that’s the wrong approach. We believe that it’s the dreamers and the entrepreneurs, the workers and the families, not the government, who built this economy. And they are the ones who are going to get it growing again, and get Americans working again.
In a Romney-Ryan administration, we’re going to champion small businesses and the workers they employ, and not stand in their way. We’ve got a plan that will reform the tax code, get rid of special-interest loopholes and limit deductions so that we can lower everybody’s tax rates. Simple. Fair. Competitive. That’s the tax code families and small businesses deserve. That’s how you get people back to work. And that’s the tax code that we will deliver.
We’re also going to repeal Obamacare and replace it with real reform. That’s also going to give businesses the certainty they need to start hiring again. And in a Romney-Ryan administration, American workers and small businesses will start getting the respect they deserve. After all their hard work, what they deserve to hear is the truth: Yes, you did build that business.
There’s another threat to our economic security, and it’s our debt. It’s hurting our economy now — and if we don’t tackle it soon, it will tackle us.
The president came into office promising to cut the deficit in half by the end of his first term. Instead, he added $5 trillion to the debt and presided over our nation’s first credit downgrade. Friends, if we continue down the road that Europe is on, we’ll get European results. That means harsh cuts in benefits for those who depend on them, along with crushing tax increases. The Federal Reserve can’t keep bailing us out forever. It can only offer a short-term fix that comes at a long-term cost — and it’s our seniors who will literally pay the price. The Fed’s actions are already having an effect on energy and food prices, forcing our nation’s seniors to stretch their fixed incomes. All this money-printing hurts savers. It threatens the future value of our money, and seniors are bearing most of the risk.
Mitt Romney and I will take America off this dangerous path. We will bring back real economic growth. We will cut and cap spending. And we will restore America’s triple-A credit rating.
We can do this. We still have time to get this right. Whenever I think about the challenges we’re facing, I think about my mom. Whether it’s the mid-career worker who has to start over, the senior who relies on Medicare today, or the grandparent who wants to make sure her grandkids inherit a stronger America. That’s my inspiration. And because I had such a strong example in my own life, I have an unshakeable belief in the resilience, wisdom and ability of the American people to solve these problems.
For mid-career Americans, let’s put a president in the White House who will champion small businesses, so people can go back to work. For those on Medicare today, let’s repeal Obamacare. Let’s keep our promises to seniors. And for future generations, let’s strengthen our health and retirement security programs so that they can count on them when they retire. Let’s grow the economy so they have opportunities to succeed. Let’s work to leave our grandkids with a debt-free nation.
Friends, it will be a long journey, and we can make that journey only together. So I ask you today to join us in the work to come. Your support, and the programs you care about, have been taken for granted long enough. Let’s meet these challenges, not as Democrats and as Republicans, but as Americans. Join us, help us, work with us, and I know that we can get this done.
Thank you, everybody, for your time, for your patience. God bless and I’d be happy to take your questions. Thank you. Thank you.
Jane Pauley: Thank you, Congressman Ryan. We have got hundreds of questions and I wonder if you could take a few before you leave us. The first one comes from Mitchell, Indiana — I’m from Indiana — from Donna, who asks, “Why are Social Security and Medicare the first thing people look at when deciding to balance the budget?” She says, “Aren't there other areas of the budget that can be restructured to enable savings?”
Congressman Ryan: It's a good question. First of all, it is not what is used to balance the budget in the early decades, in the beginning. You have to cut spending in other areas of government. You have to grow the economy to get revenues to come in, but in the future, it's these programs that become the primary drivers of our debt. Let me explain. By the year 2025, according to the Congressional Budget Office, three programs — Medicare, Social Security and Medicaid — plus interest consume 100 percent of all federal revenues.
Now, why is that? It's really because of demographics and health inflation. What do I mean when I say that? We are going from approximately 40 million seniors to 80 million seniors in one generation. And don't forget that these programs are pay-as-you-go programs. Current workers pay current taxes for current retirees. I pay my FICA taxes for my mom’s Medicare benefits. And when you have a 100 percent increase in your retirement population, but only about a 17 percent increase in the tax-paying population to pay for those benefits and the cost of health care, of Medicare goes up about 8 percent a year, therein lies your problem. That is why you need to put in place these kinds of reforms that get at the root cause of health inflation.
So it's not about balancing the budget early. That's not what you do to balance a budget. That's not what we propose. But it's about putting the kinds of reforms in for my generation so that we don't have a debt crisis, so that Medicare and Social Security is there for my generation when we retire.
The point we are trying to make is this: Let's not have a European crash or debt crisis on our hands. Because you know what happens then, when the bond markets turn on you? Real cuts for real people in real time. That's what they’re doing. They’re slashing health and retirement benefits for current seniors. Cranking up taxes, slowing down the economy, young people can't get jobs.
What we are trying to do is this: Get this economy growing, help workers, help small businesses and guarantee the promise of these programs with no changes for people in or near retirement. And the best way to do that is to change it for my generation in a way that will make sure it doesn't go bankrupt when we retire. That’s the point. That’s how we fix this problem. And the point is, there are bipartisan ideas that can be done to do this.
Jane Pauley: A couple more questions. From Waterville, Minnesota, Charles asks, “Would you stabilize Social Security by increasing revenues, lowering or limiting benefits, or a combination?”
Congressman Ryan: Mitt and I have put a specific plan out on this. We think that a tax increase on payroll taxes is bad for economics, is bad for growth, and it especially hurts self-employed people. You have to remember, a self-employed person, like a farmer or somebody working their own business, they pay both sides of the payroll tax, and we think that that hurts job creation. Plus, it doesn't give you the kind of revenues you need to fix the problem.
But if you put small changes now, that don't kick in until people who are 54 and below retire, you can actually make these modest changes that make the program solvent for 75 years. So what we are saying is gradually raise that retirement age to reflect longevity in the future. It won't even start until 2025, I believe. And don't give wealthier people as much of an increase in their benefits as everyone else does, and bring that bottom benefit up to at least the poverty line.
This is a flaw in the Social Security system today. There are people who live on only Social Security who are below the poverty line. So what we’re saying is don't give a higher income person as much of an increase in their benefits. That helps you afford the ability to bring the minimum benefit up so there is no senior citizen in America below the poverty level. Doing it this way helps us save the program, not just for current seniors, not just preventing the 25 percent across the board benefit cut that kicks in in 2033, but I want to make sure it's there when I retire. The younger you [are] in America the less you believe you will get this program. We should restore the trust and faith and belief that it's going to be there for us when we retire.
Jane Pauley: A last question, I think it was fairly similar to a last question the president took as well. From Broaddus, Texas, Lester asks, “Social Security and Medicare are too important for you to keep fighting in Washington. What specific steps would you take to forge bipartisan compromise?”
Congressman Ryan: It's the best question I could have been asked this entire time. First, you might have heard the word “voucher” earlier today, right? Let me explain, that's a poll-tested word basically designed to scare today's seniors. Here is what a voucher is: A voucher is you go to your mailbox and you get a check and you go buy something and you are on your own. Nobody is proposing that. What we’re proposing is an idea that I proposed with a Democrat in the Senate last year. What we’re proposing is an idea that came out of Bill Clinton's 1999 commission to save Medicare. What we’re proposing is an idea that has traditionally been supported by Democrats and Republicans in the past.
The reason I'm so familiar with this idea is because it works like the plan I have as a congressman, as a member of the federal employee workforce. You get a list of guaranteed coverage options. You can't be denied. You pick your plan and Medicare subsidizes your premiums based on who you are. If you are wealthy, you don't get as much of a subsidy. If you’re a middle-income person, you get the same kind of subsidy you get from Medicare today. And you’re poor, or sick, you get total coverage, total out-of-pocket coverage. Doing it this way for my generation saves it, with no changes for people in or near retirement.
Now, the shame of this idea is, this idea has been supported by Democrats and Republicans since the late ‘90s. Because the president and partisan blockades in the Senate will not even act on it, that's why it didn't pass. These ideas on Social Security I talked about, they also are rooted in bipartisan ideas.
Here’s what is Mitt Romney and I are trying to do, here’s what I’ve done on this issue in Congress, what he has done when he was governor, a Republican of a Democratic state. Don't demean the opposite side. Don't demagogue Democrats. Invite them into a coalition to work with us, to talk, and then solve these problems. You see you can get to common ground on these problems, if you treat people with respect, without compromising your principles. And the very existence of this plan to save and strengthen Medicare, a plan that has been supported by Democrats and Republicans alike, is the existence of the fact that we can get this done. This is precisely what we want to do.
Our plan is to win this election, be magnanimous, and work with Democrats who want to work with us to save this critical program. That's what we are trying to achieve. It's too important to take this for granted, to play politics. These are the two most important programs the government has created. Too many Americans depend on it for their health and retirement security. And the more we delay, the more we do nothing, the deeper the hole we dig. And the sooner we act, the sooner we can fix it, so that my generation can actually count on it and that your generation will actually get it without any changes. If you wait, if you delay, then it gets uglier. The solutions are that much harsher. That's the point we are trying to make. Thanks, Jane.
Jane Pauley: Congressman Ryan, we thank you for coming and joining us in New Orleans today.
Congressman Ryan: Thank you, my pleasure.