Another Good Entitlement-Reform Plan

James Capretta explains why the entitlement-reform proposal put forth by Rep. Paul Ryan and former Fed vice-chairman Alice Rivlin is so important:

In Medicare, the Ryan-Rivlin proposal would be transformative. It picks up on a key feature of Rep. Ryan’s “Roadmap” budget plan, which is that new enrollees in Medicare after 2020 would receive their entitlement in the form of a fixed contribution from the federal government rather than today’s defined benefit program structure. …

But Capretta is right that the importance of the plan is more political — the emergence of a responsible Democratic voice willing to work with the GOP’s guru on entitlements (Ryan) in a productive way. This will diffuse to a degree the alarmist rhetoric coming from the Dem side of the aisle. Moreover, it recognizes that we need to pursue “an across-the-board move toward more fixed federal financial support for coverage.”

In conversations I have had over the past week, Republicans on the Hill seem to recognize that there are important elements in both the debt commission plan and the Ryan-Rivlin plan. Neither is perfect, but parts of both represent some key concessions by the Democrats involved in formulating each. A flatter tax code, a lower corporate tax rate, and market-based entitlement reforms? Some would sign on the dotted line, warts and all. The Democrats? Well, by launching an assault on the debt commission, they risk appearing unserious about deficit control and real fiscal reform.

At the very least, the Ryan-Rivlin and debt commission plans will jump-start a key debate. If Republicans want to prove they are sober and mature lawmakers, they will start crafting proposals that extract the best from both plans.