Who’s Killing Medicare? Part 2

The only budget that the Democrats have produced in recent years was the one submitted to Congress in February by the President. It was an extraordinarily alarming document when one considered the long range budget projections it implied. Perhaps it is good news that the Senate voted it down by 97-0. Not a single Senate Democrat supported the President. Ah, but there's an explanation!

Democratic aides said ahead of the vote that the Democratic caucus would not support the plan because it has been supplanted by the deficit-reduction plan Obama outlined at a speech at George Washington University in April.

The only problem with that explanation is that an outline isn't a budget. A budget has numbers in it. The President refused to follow up his April speech with any actual numbers and that leaves the Democrats without anything resembling a budget. Since the Ryan plan has also be voted down in the Senate (40-57), that leaves we the people without any plan for fiscal management over the near future, let alone the chilling future that will follow.

Listening to public radio, I heard Senator Tim Johnson explain his vote. The Ryan plan, I believe he said, would "end Medicare". Ok. But the Ryan plan isn't the only threat to Medicare, is it Senator? Medicare is on the road to fiscal catastrophe all on its own. Here's a bit from The Corner:

Based on the trustees' report, despite a growing share of general revenue going to Medicare spending, the HI program will be insolvent by 2024 and registers $3 trillion in unfunded liabilities. And, of course, there's only going to be so much money that can actually go to health care, because the economy is unlikely to stomach spending increases of that scale. The question is, how much can the economy stomach before it can't anymore? When will voters decide that too much other spending is being squeezed out of the budget by health care and say they've had enough?

That puts the situation pretty well. Medicare is approaching a fiscal crisis that threatens not only that program but the rest of the budget as well. Except that the problem is much worse than that. The above note was based on the trustee's report. A "statement of actuarial opinion" appended to the report makes for a bitter footnote. Here is a sample:

In past reports, and again this year, the Board of Trustees has emphasized the strong likelihood that actual Part B expenditures will exceed the projections under current law due to further legislative action to avoid substantial reductions in the Medicare physician fee schedule. While the Part B projections in this report are reasonable in their portrayal of future costs under current law, they are not reasonable as an indication of actual future costs. Current law would require a physician fee reduction of an estimated 29.4 percent on January 1, 2012—an implausible expectation.

Further, while the Affordable Care Act makes important changes to the Medicare program and substantially improves its financial outlook, there is a strong likelihood that certain of these changes will not be viable in the long range.

To put it in precise political science terms, Medicare is in deep doodoo. It would be plausible, but unfair, to say that Senator Johnson and the rest of his Party are being cynical. They probably are focused solely on the next election. They hope to play on the fears of the elderly as they have done for decades.

They are also resolutely ignoring reality. Sooner or later the crunch will come. With every year, the crunch moves backward towards the present. The longer we wait to face it, the worse the pain will be. To say that the Democrats are neither doing nor even thinking about how to address the problem would be misleading. They are doing everything they can to demonize anyone who does try to address it. If anyone is acting to end Medicare, it's the Party that pretends to champion Medicare. The same goes, I might add, for Social Security and every other part of the Federal Government.

Comments

[Stan Gibilisco]

The Democrats will demagogue this issue successfully, increasing their margin in the Senate and reducing the Republican majority in the House (maybe even regaining the majority there) after the 2012 election.

Obama will win a second term.

Then the Democrats' solution to this problem will come into focus, the solution they already have planned (but craftily will not say): Massive tax increases. I'm growing increasingly agnostic on that issue. What's the alternative? Let seniors try to buy health insurance? That's like trying to insure a new house built on a flood plain in tornado alley.

The Democrats have a winning hand and they'll play it to the maximum.

[A.I.]

Stan, yours is certainly a plausible scenario. However, you fail the mention Republicans will continue to "demagogue" the tax issue with equal or greater fervor saying increased taxed will destroy the economy, warp our spines and cause the Allies to loose the war!!!!

Of course we have had higher taxes in the past. Somehow, America endured and even thrived achieving decent economic growth without incurring unsustainable deficits. That implies there is some optimum rate of taxation that is higher than what is currently imposed. And most certainly, that must be linked to an optimal level of spending.

KB, your/Ryan's argument boils down to this: Medicare will be dead in a few years anyway so lets kill it now and replace it with something totally different and inadequate while trying to fool people into believing its still Medicare. And while we're at it, lets cut taxes by an amount roughly equal to the $3 trillion you present as the program unfunded liabilities. I can't bring myself to offer even a tongue-in-cheek "good luck on that one".

[Billl Fleming]

it's always sad to see KB, who I have come to respect as a thinker and writer, doggedly assign himself to what he knows is every good Republican's duty, however distasteful. The distasteful task of polishing fat cat turds.

[KB]

Bill: at least the cat can pass something. Congress is constipated. Both you and A.I. have nothing. All you can do is complain about the Republicans. Your party has no budget and no plan. While Rome burns, your response is to close the windows tight and turn up the volume on the fiddle. When anyone suggests that we might ought to put out the fire, you scream about how many people will drown. That is what your side amounts to.

A.I.: I suspect that raising taxes, especially on the middle class, will be unavoidable, but even Democrats seem suddenly to understand that that sort of thing can depress economic growth. Nonetheless, it will probably have to be done. It is completely irresponsible, however, to complain about Republicans wanting to cut taxes when the Democrats have no budget and no plan of their own.

[Billl Fleming]

No, we're saying that the people who are enjoying the largesse of the American dream, should pony up and help pay for it, brother.

[Billl Fleming]

Also, as per Nancy Pelosi, KB we DO TOO have a plan. it's called Medicare.

[duggersd]

Dear Senator Johnson:
I am writing this to thank you for saving us from those dastardly Republicans. Thanks to your and the votes of your fellow Democrats and a few RINO Republicans, I can be sure to have the coverage I am expecting when I turn 65. It is very nice of you to pass on the costs to my children and grand children. I am sure they will enjoy paying their taxes so that I can have my coverage. Who cares that there is no way this can be sustained without taxing them to oblivion? Obviously you Democrats have figured out how to give all of us future senior citizens Medicare coverage without destroying the country. I think it would be kind of nice if you would let us know what YOUR budget proposal is and how YOU plan to save Medicare from what is inevitable. So far I have seen nothing. Your leader in the Senate has said he sees no reason to propose a budget even though that is part of the duty.
PS I loved the advertisement of the Republicans pushing granny over the cliff, even though granny is not part of the changes proposed by Representative Ryan. Only the Democrats have no shame in lying the way they do.

[A.I.]

Exactly when was it KB that a President submitted a budget and congress said wow, that is exactly what we had in mind, done deal? As for Democrats not having a budget plan, how do you know they will not submit one? And even if they don't, why would that preclude their criticism of the Ryan plan? By that logic, now that Ryan's plan has been killed in the Senate, Republicans also have no plan and thus are "irresponsible" in criticizing Democratic efforts to raise taxes.

As for raising taxes on the middle class, that's unlikely until upper classes pay a larger percentage of their incomes. That means all taxes: local, state and federal. And by the way, Democrats have always been aware that over-taxation can depress economic growth.

But back to Ryan's plan, the thing is a total joke/sham as applied to Medicare. It actually increases costs while reducing benefits, that according to the CBO: http://www.bloomberg.com/news/2011-05-25/sharing-costs-is-no-way-to-fix-medicare.html?wpisrc=nl_wonk

[Jimi]

"No, we're saying that the people who are enjoying the largesse of the American dream, should pony up and help pay for it, brother."

How many times do we have to explain this math to you? It doesn't matter how much you raise taxes...it will only have a negative effect. You could Tax every Single American at 100%, and you still do not solve the problem, why can't you people get this thru your thick skulls?

[Bill Fleming]

Seriously Jimi, have you ever tried Thorazine?

[Jimi]

"As for Democrats not having a budget plan, how do you know they will not submit one?"

Oh probably because it has been two years now....

"Republicans also have no plan"

WTF? They just voted down?????????

"that's unlikely until upper classes pay a larger percentage of their incomes."

The majority of the cost of the tax cut came from the middle class. Go ahead and tax the upper class more, you only net revenue about $65 Billion a year, that does nothing to solve the problem, and most likely will make it worse. You are already getting 80% of revenue from the upper class.

[Jimi]

Bill,

Typical.....you have nothing!

[Stan Gibilisco]

Well, if all else fails, they could accuse Paul Ryan of "attempted manslaughter."

For precedent, see ...

http://www.foxnews.com/scitech/2011/05/27/italian-scientist-charged-manslaughter-failing-predict-earthquake/

Oh, I meant "attempted humanslaughter." Wouldn't want to commit political incorectness.

[Ken Blanchard]

A.I.: you are being silly. The Democrats didn't quibble with the President's budget; they voted against even taking it up for debate. It is the responsibility of the President to offer a budget, so if the Feb. budget has been superseded,as the Senate Dems say, it is the President's responsibility to offer another. He ain't doing that.

Yes, the Democrats have no standing to challenge the Ryan Plan unless they have an alternative. Medicare as currently structured cannot be maintained. Do I need to repeat that? If you want to save it, you have to offer an alternative. Do I need to repeat that as well? The Ryan plan is the only thing offered so far that even addressed the fiscal problems facing Medicare. The Democrats have offered nothing.

Let me summarize your critique of the Ryan plan: it will raise fees on seniors, cut benefits, and increase total costs. It that about it? Not long ago you were arguing that ObamaCare would expand health insurance, increase delivery of care to the newly covered, and save money. What color is the sky in your world?

[Bill Fleming]

I think it's important to point out here that "Medicare" represents actual guaranteed health care service delivery as opposed to access to health insurance coverage. It's a significant distinction. Profound. People understand Medicare. They don't understand health insurance. As per virtually ALL recent polls, the GOP can attempt to blur and obfuscate the difference at their own peril. "We the peeps" ain't buyin' it, boys. Eventually, the solution will be an extension of Medicare to younger and younger age groups, and a taxing formula to pay for it. It will happen, but it isn't ripe yet.

[A.I.]

The color of my sky KB is the Affordable Care Act is better than the status quo for the age group it covers, but not as good as Medicare. Just because those under 65 have to settle for second best does not mean I favor imposing the same on the elderly.

As for the Ryan plan, if it really did fix America's budget woes, it might be worth consideration. It does not. It simply shifts costs from the federal government to individuals and/or state and local entities. And it increases costs because these entities have less bargaining power.

[Ken Blanchard]

Bill: you think the American people are too simple minded to understand health insurance. You may be right. However, even a mind as complicated as yours can have a blind spot. You talk of extending Medicare to cover everyone, which might have been a good idea at one time.

But for Heaven's sake, Medicare is going belly up. It CANNOT be sustained as it is. The only way to fix it is to increase fees and cut benefits. There is little chance of success unless you do both. I'll grant you that Republicans will scream if you talk about raising taxes. Our bad. But Democrats are screaming bloody murder at any change in the program at all.

A.I.: I like your language here: "shift costs from the federal government to individuals and/or state and local entities." I am tempted to ask where you think the Federal Government GETS its money, but I will skip that. If all the Ryan plan does is "shift" costs without reducing them, then obviously it won't fix the problem. Ok, then what is YOUR proposal. If you say tax the rich, fine, but we both know that that won't solve the problem.

Your attack on the Ryan plan is part and parcel of the general Democratic strategy: acknowledge the need for Medicare reform in general and then vehemently oppose any change, however minor. I repeat: this is completely irresponsible.

[Donald Pay]

The stated goal of conservative Republicans is to get rid of what they call "socialized medicine" (ie. Medicare). If they truly believe the system should fail, then why can't they simply let that happen? Why try to fix the system?

This has never made any sense to me until Paul Ryan came out with his plan. It's not about socialism. It's about who benefits from socialism. Medicare benefits all. Ryan wants the financial industry and the wealthy to benefit. If Medicare totally fails, there won't be any money to shift to the private sector socialists Ryan wants to benefit.

[Ken Blanchard]

Donald: your jaundiced view of Ryan's motives aside, you might have a point. Yet you concede that Ryan is, in his fashion, trying to keep Medicare from "totally" failing. The Democrat's response: keep it aimed straight down the road to total failure and castigate anyone who suggests putting a foot on the breaks.

[A.I.]

You certainly like bandying the term "irresponsible" KB, too bad your applying it to the wrong party. Certainly someone will have to come up with an alternative to Ryan's proposal. But that does not mean Democrats must produce that plan before rejecting "Ryancare", which is nothing more than a plan to privatize and ultimately destroy Medicare. Telling the public Ryancare is BS on steroids isn't irresponsible, it simply is honest.

How can the current system be saved? Here are a few alternatives to Ryancare: Institute measures to bring health care costs more in line with those of the rest of the industrialized world, which are about half of what Americans pay. Increase the amount of income subject to Social Security and Medicare withholding thus contributing to the solvency of both programs. Roll back Bush tax cuts and close "corporate welfare" loopholes to increase revenues and thus help underwrite the Medicare trust fund by bringing the overall budget more into balance. Cut general spending and eliminate or curtail subsidies where appropriate.

For any of those measures to be taken however, the Republican notion that cutting spending is the only acceptable way to reduce deficits and that spending can be significantly reduced without hurting/destroying worthy programs like Medicare will have to be overcome. These are among a host of lies that are the epitome of "irresponsibility" and their acceptance as truth the primary obstacle to keeping Medicare as well as the entire federal government solvent.

So here's a question for you KB: Why is exposing a program for the sham it is irresponsible while promoting the notion one can have something for nothing is not?

[Ken Blanchard]

A.I.: finally you advance some serious proposals. They are woefully insufficient but I think that they will almost certainly be part of the solution. Now: has the President endorsed your proposals? Is Harry Reid drawing up a plan including them? Senate Democrats have no intention of producing a budget, let alone a long range plan for Medicare reform. The President has no plan whatsoever for getting our fiscal house in order. The Democratic strategy is perfectly clear: attack any change the Republicans propose and remain scrupulously silent otherwise. That is utterly irresponsible.

[A.I.]

Seems you forgot to answer my question. Must have been an oversight.

[Jimi]

A.I.

The baby boomer generation cannot be supplimented by raising taxes....the math doesn't work, there is not enough workers, and the economy is not the correct size. So all the things that you just listed to save Medicare and S.S. are accurate. Sure it would help, but it would be like using spit-wads to stop a tank.

[Jimi]

Sorry:

"So all the things that you just listed to save Medicare and S.S. are NOT accurate."

[KB]

A.I.: I think I did, but let me make it clearer: attacking the Ryan Plan without offering anything of your own as an alternative is obviously designed to scare anyone away from making any further proposals for reform. Even if that weren't its design, that has been the effect of this strategy for a half century. It keeps Medicare and Social Security on the "third rail" of politics, something politicians can't touch without dieing.

That virtually guarantees that there will be no genuine change in the system until it and the rest of government are really insolvent. Do you really not see how that is irresponsible?