David Leonhardt's Simple Budgetary Solutions: Ration Health Care, Raise Taxes

Chief economic writer David Leonhardt argued against the deficit-reducing House Republican budget written by Rep. Paul Ryan in his Wednesday front-page Business Day column "A Lopsided Proposal for Medicare." Instead, Leonhardt called for higher taxes on "affluent Americans"(his reasoning: All wealthy countries do it). It's one of his favorite arguments for redistributing the wealth.

While admitting the Republican budget was "a daring one in many ways" he faulted it for not reforming Medicare, which he interestingly admits is a "welfare program," since people generally get more out of it in care than what they paid into the program in taxes. Leonhardt again called for rationing health care in the name of cost control.

A fairer, more fiscally conservative plan would not postpone dealing with Medicare. It would leave in place the cost control measures in the health reform bill and go even further to reward the quality of care rather than the volume. Obviously, these steps would run some risk of restricting good treatments, too. But, remember, we're facing "an existential threat." We can't limit ourselves to solutions without risks.

Next, the federal government would raise taxes. As countries have grown richer over time, they have historically paid higher taxes - to cover the costs of a strong military, good schools, comfortable retirements and other luxuries that the free market doesn't provide.

Affluent Americans, in particular, can afford higher taxes. They have received far larger raises in recent decades than any other income group, and their tax rates have fallen far more. Yet Mr. Ryan would reduce them further.