The Cain-Gingrich Debate

Herman Cain and Newt Gingrich held their own two-person debate on Saturday. Cain and Gingrich are now the two strongest non-Romney candidates according to RCP's poll of polls, with Cain and Romney vying for the #1 position. Ron Paul and Rick Perry are pretty close to Gingrich, but while Gingrich is trending upwards, Perry is still trending downwards, and Paul just isn't going anywhere.

Before this debate, I had said it had the potential to finally rally the anti-Romney vote around either Cain or Gingrich, provided it got enough eyeballs. Unfortunately, I don't think that was the case. It was carried by C-SPAN rather than any of the major networks. Not only was it scheduled on a Saturday night, but it went head-to-head with the LSU-Alabama game. The full video is here, but be warned, it's plagued by jumpiness, a shaky camera and bad sound, and the actual debate doesn't start until about 15 minutes in.

This debate had three main sections, one each for Medicare, Medicaid and Social Security. Defense spending, which is about the same as Social Security at 20% of federal expenditures, was not addressed.

Medicare
Newt doesn't want to force people into a particular system, but rather provide different options and allow people to choose. He says the government is losing $70-120 billion per year to Medicare fraud (which is 13-23% of the Medicare budget).

Cain says, "I'm supposed to have a minute to disagree about something he [Newt] said, but I don't." He says when it was established in 1965, Medicare was projected to grow to $12 billion per year by 1990. The actual Medicare budget in 1990, he says, was $109 billion (in 2010 it was $520 billion [PDF]). To reform it, he supports HR 3000 (which is apparently the same as HR 3400 from the previous Congress). The important parts of that bill, he says, are health savings accounts, allowing association health plans and loser-pay laws.

Newt criticizes the third-party-payer system by comparing health care to getting a burger at McDonald's. He says we don't have Congressional hearings on McDonald's fraud because there's a direct relationship between the provider and the consumer, and we need to restore that relationship to health care. Newt also wants to eliminate the CBO, which is a very dangerous proposition. Certainly the CBO has it's problems, but is less Congressional accountability really the answer?

Asked about means testing, Cain talks more about health savings accounts, which doesn't directly answer the question but are still, I think, the most important part of Medicare reform. On the same question, Newt says we wouldn't need means testing if we simply dealt with the massive amount of Medicare fraud he mentioned earlier.

Both Cain and Gingrich are opposed to defined-benefit Medicare. Gingrich doesn't like defined benefits because that means you need bureaucrats to define those benefits in ever-increasing detail. As an example he cites the recent ruling on the prostate cancer test. Cain prefers defined contributions because it allows individuals to put their name on the account and to truly own the money, which he says will result in the money being spent more wisely.

Social Security
Asked about the three reform options of raising the retirement age, cutting benefits or raising taxes, Cain says, "None of the above." He says 30 countries follow the Chilean model of personal retirement accounts, and it's worked for them. He wants to institute optional personal retirement accounts, so that those close to retirement, or who simply prefer the current system, can continue to pay into the current system and receive their promised benefits, while those who want to exit the system and get personal retirement accounts can do so. He says that for people who choose the retirement accounts, half of their payroll taxes would go into that personal account, while the other half would pay for the benefits of those who choose to remain on the old system.

Newt brings up the Galveston plan, and says that you can put in half as much to the system and get twice as much back under the Galveston plan. He talks about how economic growth affects Social Security solvency and bashes Obama for scaring seniors over the summer, but ultimately reaches the same conclusion as Cain. Newt supports optional personal retirement accounts, just as Cain does, but unlike Cain, he doesn't address the transition period, which is possibly the most important question with these accounts.

Since they agree on personal retirement accounts, they spend the rest of the Social Security segment talking about where those accounts go and where you "park" the money. Newt says that keeping it in Treasury bills like the current Social Security trust fund is fine, as long as that money is kept separate from the general budget, but that some of it would also be put into the private sector. Cain focuses on the money in the private sector, and says workers would be able to choose the level of risk they're willing to take on, and that would determine the kind of investments the money is put into.

Medicaid
Cain supports block grants to the states while ending federal mandates. He says this would allow us to bring down the costs gradually over time, but doesn't really explain why. I think block granting might be good, but my main concern is that it turns one unsustainable system into fifty unsustainable systems. That one unsustainable system could be reformed by a single act of the federal government. Some of those fifty unsustainable systems would also be successfully reformed, but many of them wouldn't be. God help you if you live in a blue state.

Newt supports block grants, but he also wants to tie personal behavior to benefits. He cites a program in Florida where people with certain long-term illnesses who took care of themselves and avoided emergency room visits were given Christmas bonuses. It was a win-win because the people were healthier and got extra money, while the state saved money since the Christmas bonus cost less than the emergency room visits would. I'm not sure whether Newt wants to do something similar nationally, or just wants every state to do what Florida did.

Cain would support a health care voucher system, provided the vouchers did not cover the entire cost of the care. He says people need "some skin in the game." Newt doesn't come out specifically for or against vouchers, but rather goes back to the block grant idea, and says if individual states want to try vouchers, that's fine for them.

How would they stop Medicaid fraud? Cain says he wants to block grant both the money and the responsibility, and that if states had the responsibility of managing the money without federal strings attached, they would be able to stop the fraud. He has a lot more faith in state governments than I do. Newt pins Medicare fraud on the CMS, which he says is an outdated agency still using paper when they should be digital. He says a crook with an iPad working late in the evening is always going to beat a bureaucrat using paper who went at 5pm.

Conclusion
Since this was just a two-person debate, I'm not going to score it the same way I do the usual circuses. I will say that I really enjoyed this format, and I would absolutely love to see the rest of the debates converted into a format like this, with just two or three candidates getting to sit down and really explain their views in depth. Neither candidate really "won" this debate, I thought. Newt was obviously more comfortable with this format than Cain was, but Newt also had more statements that I disagreed with. Both showcased some really good ideas, but ultimately they agreed on so much of the policy that they really did seem like a President & VP ticket rather than two men competing for the same job (which is something mentioned by Cain himself).