Is Paul Ryan’s Medicare A Voucher System Or Not: Who Is Demagoguing Who?
During the White House meeting this week between President Obama and the Republican leadership, Rep. Paul Ryan took the President to task for demagoguing Ryan’s proposed Medicare changes.
According to the Congressman, the insistence on the part of the President- and his brother and sister Democrats – that the program is a voucher system rather than the ‘premium support’ program Ryan steadfastly claims the idea to be, is grossly misleading Americans, all for the purpose of political gain.
While Ryan’s confrontation with Obama brought cheers from the GOP freshman class who fill the corridors of Congress these days, the question that needs to be asked is, ”Who is demagoguing who?”
In truth, the concepts behind premium support and voucher programs are fairly close, each with a similar objective – the government helping out the beneficiary by paying a portion of a benefit, in this case an insurance premium.
Rep. Ryan likes to point out that his proposed Medicare program is the same as that employed by the Federal Employees Benefits Program and the Medicare Part D benefit that helps seniors pay for their prescription drugs. Both these programs operate using government premium support, whereby the government contributes towards the payment of the premiums charged by the private insurance carrier to the beneficiary, but makes the government’s share of the premium payment directly to the insurance company issuing the policy.
This direct payment is what is often considered the point of distinction between a voucher and premium support. In a voucher program the government gives the financial support directly to the beneficiaries who are then on their own to do what they will with the money, so long as they don’t look to the government to do anything else for them.
Using this standard alone, Rep. Ryan would have a point.
Indeed, his plan proposes seniors going to private insurers for their health care coverage with the government contributing a share of the premium charges and making the payment directly to the insurance company. This is just as the federal government does in the cases of federal employee benefits and Medicare Part D.
However, there is a more important distinction between premium support plans and vouchers.
In the plan that provides heath care benefits for federal employees, on which Ryan relies to make his premium support case, if a government employee’s premium costs go up –and they always do – the government increases the premium support in lockstep with the increased premium.
Not so with RyanCare.
Ryan’s proposal, that would turn Medicare into a private insurance program with the government providing assistance to seniors on their premium payments, limits increases in that support to the cost of living index – an amount wholly insufficient to cover the extra costs as we know that rising costs of health care and premium charges always exceed annual cost of living increases. Thus, if premiums increase (and of course they will) the costs of these increases will be shifted to our senior citizens who, in most instances, would not appear to have the ability to take on these increased costs on their fixed retirement budgets.
This, by anyone’s definition, is a voucher program.
In a recent piece by Washington Post blogger Ezra Klein, Ezra interviewed Henry Aaron of the Brookings Institute and Bob Reischauer of the Urban Institute. Messrs. Aaron and Brookings are the two gentlemen who originally came up with the term “premium support” to describe their idea for a Medicare system where the program is opened up to competition by private insurers but has safeguards built in to protect Medicare beneficiaries from the very cost shifting program the Ryan plan proposes.
While Ryan has largely adopted this model – the two originators make clear that he has done so without the key cost shifting safeguards that they believe are so essential to it working.
According to Aaron-
If one does the arithmetic, income grows a few percentage points faster than prices. Health-care spending grows faster than income by a couple of percentage points. So we’re looking at linking to an index that grows less rapidly than health-care costs by three to four percentage points a year. Piled up over 10 years, and that’s a huge erosion of coverage. It’s vouchers, not premium support.
Clearly, Ryan’s plan bears a far greater resemblance to a voucher program than the premium support programs he looks to as back up for what he is selling.
We can have a debate as to whether we would be better off turning Medicare over to the private markets. While I believe it is an idea fraught with dangerous consequences to our future seniors (those who are not yet 55 years of age), an honest debate to discuss these different ideas cannot hurt.
However, when Ryan and friends continue to play the political game of blaming the President for misleading the public when it is, in fact, Ryan who is attempting to mislead, there will be no honest debate.
It is not the President who is demagoguing on this one – it is Paul Ryan.
By: Rick Ungar, The Policy Page, Forbes, June 5, 2011
To Fix The Budget Deficit, Raise Corporate Taxes
Washington is a town currently gripped by deficit hysteria. Various commissions and congressional “gangs” have formed (and broken up) with the goal of crafting a plan to bring the nation’s budget into balance. Even the media has been sucked into this vortex, dedicating far more of its time to covering the deficit than other economic issues, such as unemployment.
At the same time, both parties seem to agree that the nation’s corporate tax code needs to be reformed. President Obama and House Budget Committee Chairman Paul Ryan each dedicated a portion of their respective budget plans to overhauling the federal corporate income tax, which is high on paper, but so riddled with loopholes, deductions, and outright giveaways that few corporations pay the full statutory rate (and several corporations pay no corporate income tax at all).
This, then, should be an excellent opportunity to kill the proverbial two birds with one stone: cleaning up the corporate tax code, lowering the corporate tax rate, and still raising more revenue that can be put towards deficit reduction.
But no.
Despite all the hyperventilating over the deficit, both Republicans and Democrats have said that they want corporate tax reform to be revenue neutral, meaning no more or less revenue will be raised by the new system than was raised by the old. President Obama and Treasury Secretary Tim Geithner have each extolled the virtues of deficit-neutral corporate tax reform. But if this is actually the road that’s taken, it will constitute a colossal missed opportunity.
At the moment, corporate tax revenue has plunged to historic lows. In 1960, the corporate income tax provided more than 23 percent of federal revenue; the Office of Management and Budget estimates that it will provide less than 10 percent this year.
During the 1960s, the United States consistently raised nearly 4 percent of GDP in corporate revenue. During the 1970s, the total was still above 2.5 percent of GDP. Now, the U.S. raises less than 1.5 percent of GDP from the corporate income tax. As the Congressional Research Service put it, “Despite concerns expressed about the size of the corporate tax rate, current corporate taxes are extremely low by historical standards.”
The United States effective corporate tax rate is also low by international standards (though the 35 percent statutory rate is the second highest in the world). There are plenty of reasons for this drop, but chief among them is the proliferation of loopholes and credits clogging up the corporate tax code (alongside the growing use of offshore tax havens and the ability of corporations to defer taxes on offshore profits indefinitely).
Huge corporations, such as ExxonMobil, have recently had years where they paid literally nothing to the U.S. Treasury, despite making huge profits. The New York Times made waves by finding that General Electric paid no federal income tax last year, instead pocketing hundreds of millions of dollars in tax benefits. Mega-manufacturer Boeing has done the same, paying no federal taxes in 2009 while collecting $132 million in tax benefits. Google last year had a 2.4 percent effective tax rate, while California-based Broadcom’s rate was just 1.4 percent, far below the rate that the average American pays.
The Treasury Department estimated in 2007 that corporate tax preferences cost $1.2 trillion in lost revenue over a decade. So there is ample room to remove credits and deductions (like those that benefit, amongst others, hugely profitable oil companies and agribusinesses), lower the statutory rate, while still bringing in more revenue. Some companies would see their taxes go up, but others would see their tax bills drop, and the corporate tax code would be more fair, efficient, and competitive, while ensuring that all corporations pay their fair share.
As the Center on Budget and Policy Priorities put it, “corporate tax reform is a solid candidate to make a contribution to fiscal improvement … Taking a major revenue source off the table for deficit reduction at the outset would be ill-advised.” Indeed, with corporate profits skyrocketing—up 81 percent over a year ago—and corporations sitting on trillions in cash reserves, there is no reason that corporate tax reform should be done in a way that is deficit neutral, besides the fact that raising more revenue will be politically difficult, as corporations will likely throw their considerable lobbying weight against such a move. But in the end, failing to raise additional corporate tax revenue will simply shift more of the deficit reduction burden onto a middle-class already battered by the Great Recession.
By: Pat Garofalo, U. S. News and World Report, May 25, 2011
Republicans Ignored Warnings On Paul Ryan Plan
It might be a political time bomb — that’s what GOP pollsters warned as House Republicans prepared for the April 15 vote on Rep. Paul Ryan’s proposed budget, with its plan to dramatically remake Medicare.
No matter how favorably pollsters with the Tarrance Group or other firms spun the bill in their pitch — casting it as the only path to saving the beloved health entitlement for seniors — the Ryan budget’s approval rating barely budged above the high 30s or its disapproval below 50 percent, according to a Republican operative familiar with the presentation.
The poll numbers on the plan were so toxic — nearly as bad as those of President Barack Obama’s health reform bill at the nadir of its unpopularity — that staffers with the National Republican Congressional Committee warned leadership, “You might not want to go there” in a series of tense pre-vote meetings.
But go there Republicans did, en masse and with rhetorical gusto — transforming the political landscape for 2012, giving Democrats a new shot at life and forcing the GOP to suddenly shift from offense to defense.
It’s been more than a month since Speaker John Boehner (R-Ohio) and his lieutenant, Majority Leader Eric Cantor (R-Va) boldly positioned their party as a beacon of fiscal responsibility — a move many have praised as principled, if risky. In the process, however, they raced through political red lights to pass Ryan’s controversial measure in a deceptively unified 235-193 vote, with only four GOP dissenters.
The story of how it passed so quickly — with a minimum of public hand-wringing and a frenzy of backroom machinations — is a tale of colliding principles and power politics set against the backdrop of a fickle and anxious electorate.
The outward unity projected by House Republicans masked weeks of fierce debate, even infighting, and doubt over a measure that stands virtually no chance of becoming law. In a series of heated closed-door exchanges, dissenters, led by Ryan’s main internal rival — House Ways and Means Committee Chairman Dave Camp (R-Mich.) — argued for a less radical, more bipartisan approach, GOP staffers say.
At a fundraiser shortly after the vote, a frustrated Camp groused, “We shouldn’t have done it” and that he was “overridden,” according to a person in attendance.
A few days earlier, as most Republicans remained mute during a GOP conference meeting on the Ryan plan, Camp rose and drily asserted, “People in my district like Medicare,” one lawmaker, who is now having his own doubts about voting yes, told POLITICO.
At the same time, GOP pollsters, political consultants and House and NRCC staffers vividly reminded leadership that their members were being forced to walk the plank for a piece of quixotic legislation. They described for leadership the horrors that might be visited on the party during the next campaign, comparing it time and again with former Speaker Nancy Pelosi’s decision to ram through a cap-and-trade bill despite the risks it posed to Democratic incumbents.
“The tea party itch has definitely not been scratched, so the voices who were saying, ‘Let’s do this in a way that’s politically survivable,’ got drowned out by a kind of panic,” a top GOP consultant involved in the debate said, on condition of anonymity.
“The feeling among leadership was, we have to be true to the people who put us here. We don’t know what to do, but it has to be bold.”
Another GOP insider involved to the process was more morbid: “Jumping off a bridge is bold, too.”
Time will tell whether the Medicare vote, the most politically significant legislative act of the 112th Congress thus far, will be viewed by 2012 voters as a courageous act of fiscal responsibility — or as an unforced error that puts dozens of marginal GOP seats and the party’s presidential candidates at serious risk. That question might be answered, in part, this week during a special election in New York’s 26th Congressional District, in which Republican Jane Corwin appears to be losing ground to Democrat Kathy Hochul.
The GOP message team is already scrambling to redefine the issue as a Republican attempt to “save” Medicare, not kill it.
But the party’s stars remain stubbornly misaligned. Presidential hopeful Newt Gingrich candidly described the Medicare plan as “right-wing social engineering” — only to pull it back when Ryan and others griped. And Priorities USA Action, an independent group started by two West Wing veterans of the Obama administration, was out Friday with its first ad, a TV spot in South Carolina using Gingrich’s words to savage Mitt Romney for saying he was on the “same page” as Ryan.
“The impact of what the House Republicans have done is just enormous. It will be a litmus test in the GOP [presidential] primary,” said former White House deputy press secretary Bill Burton, one of the group’s founders.
“I couldn’t believe these idiots — I don’t know what else to call them — they’re idiots. … They actually made their members vote on it. It was completely stunning to me,” said former Pennsylvania Gov. Ed Rendell, a Democrat who worked hard to win over the western part of his state, which has among the highest concentration of elderly voters in the country.
It was also the site of some of the Democrats’ worst losses in 2010 — three swing House seats Democrats hope to recapture next year, largely on the strength of the Medicare argument.
“Look at [freshman House members in the Pittsburgh-Scranton area], they make them vote on this when they’re representing one of the oldest districts in the country?” Rendell asked.
“We have a message challenge, a big one, and that’s what the polling is showing,” conceded Rep. Patrick McHenry (R-N.C.), a former Karl Rove protégé who enthusiastically backed the Ryan plan. “There’s no way you attack the deficit in my lifetime without dealing with the growth of Medicare. Do we get a political benefit from proposing a legitimate solution to a major policy problem? That’s an open question.”
The House Republican leadership had hinted at an emerging plan to tackle entitlement reform on Feb. 14 — the day Obama released his budget without reforms to Medicare, Medicaid and Social Security.
Cantor caught Hill reporters by surprise when he said, nonchalantly, that the Republican budget would be a “serious document that will reflect the type of path we feel we should be taking to address the fiscal situation, including addressing entitlement reforms.”
But there were also internal motivations in the decision to go big on Medicare, rooted in Boehner’s still tenuous grasp of the leadership reins, according to a dozen party operatives and Hill staffers interviewed by POLITICO.
Republican sources said Boehner, who has struggled to control his rambunctious new majority, needed to send a message to conservative upstarts that he was serious about bold fiscal reform — especially after some of the 63 freshmen rebelled against his 2011 budget deal that averted a government shutdown.
Then there’s the ever-present friction between Boehner and Cantor, who, along with Minority Whip Kevin McCarthy (R-Calif.), has positioned himself as the next generation of GOP leadership and champion of the conservative freshman class.
Boehner’s camp said the speaker has always supported the Ryan approach — which would offer vouchers to future Medicare recipients currently younger than 55 in lieu of direct federal subsidies — and proved his support by voting for a similar measure in 2009.
“Boehner has said for years, including leading up to the 2010 election, that we would honestly deal with the big challenges facing our country,” said his spokesman, Michael Steel. “With 10,000 Baby Boomers retiring every day, it is clear to everyone that Medicare will not be there for future generations unless it is reformed. The status quo means bankruptcy and deep benefit cuts for seniors. It’s clear who the real grown-ups in the room are. We’ve told the truth and led, while the Democrats who run Washington have cravenly scrambled and lied for partisan gain.”
But that message hasn’t always been quite that clear. On several occasions, Boehner has seemed squishy on the Ryan budget. In talking to ABC News, Boehner said he was “not wedded” to the plan and that it was “worthy of consideration.”
Still, even if Boehner had opposed the plan — and his top aide, Barry Jackson, expressed concerns about the political fallout to other staffers — he probably couldn’t have stopped the Ryan Express anyway, so great was the push from freshmen and conservatives.
That’s not to say some of the speaker’s allies from the Midwest didn’t try. Camp and Ryan hashed out their differences in a series of private meetings that, on occasion, turned testy, according to several GOP aides. Camp argued that the Ryan plan, which he backed in principle — and eventually voted for — was a nonstarter that would only make it harder to reach a bipartisan framework on real entitlement reform.
A few weeks later, Camp told a health care conference that, from a pragmatic legislative perspective, he considered the Ryan budget history. “Frankly, I’m not interested in talking about whether the House is going to pass a bill that the Senate shows no interest in. I’m not interested in laying down more markers,” he said.
House Energy and Commerce Committee Chairman Fred Upton (R-Mich.) also made the case for a more moderate approach — but his principal concern was the Medicaid portion of Ryan’s plan, an approach he believed wouldn’t do enough to reduce burdens of indigent care on states.
But even as Democrats high-five over the possibility of Medicare-fueled political gains, Republicans are trying to muster a unified defense. Cantor, for his part, stumbled by suggesting to a Washington Post reporter that the Ryan Medicare provisions might be ditched during bipartisan debt negotiations being led by Vice President Joe Biden.
Cantor later clarified his remarks and claimed he still backed the Ryan principles, but no GOP staffer interviewed for this article believed the Medicare overhaul has any realistic chance of passage.
By: Glenn Thrush and Jake Sherman, Politico, May 23, 2011
“Stalwart” Ronald Reagan: Why Raising The Debt Ceiling Is Necessary
Let’s get real. What person in their right mind would really want the United States to default? Of course, nobody, yet over the years many members of Congress have voted against raising the debt ceiling.
Barack Obama did it and now rejects his own action. It is always a symbolic gesture that both Democrats and Republicans use, and use irresponsibly.
Yet now we seem to have the Tea Party, and a larger group of Republicans, clamoring for some kind of show down at the OK Corral. Not a symbolic gesture to some but a real threat. Not smart.
For those who like to cite Ronald Reagan in his 100th year as a stalwart, antidebt, no-tax-hike, no nonsense conservative, they have the wrong guy. Aside from his major tax increases as governor of California and as president here is a little history on the debt ceiling.
In a letter to then-Majority Leader Howard Baker on November 16, 1983, President Reagan asked “for your help and support, and that of your colleagues, in the passage of an increase in the limit on the public debt.”
Reagan went on:
…the United states could be forced to default on its obligations for the first time in its history.
This country now possesses the strongest credit in the world. The full consequence of a default–or even the serious prospect of default–by the United States are impossible to predict and awesome to contemplate….The risks, the costs, the disruptions, and the incalculable damage lead me to but one conclusion: the Senate must pass this legislation before the Congress adjourns.
The point is that Republicans should shelve using the debt ceiling vote as a means of negotiation. This is not a negotiable item. Should they take this right up until the 11th hour and refuse to fund the government, not only will Reagan’s admonitions come true but the Republicans will seal their fate as an irresponsible, minority party–a pariah for years to come.
Bad policy, bad politics.
By: Peter Fenn, U. S. News and World Report, May 19, 2011
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GOP And Media Alert: Vouchercare Is Not Medicare
What’s in a name? A lot, the National Republican Congressional Committee obviously believes. Last week, the committee sent a letter demanding that a TV station stop running an ad declaring that the House Republican budget plan would “end Medicare.” This, the letter insisted, was a false claim: the plan would simply install a “new, sustainable version of Medicare.”
But Comcast, the station’s owner, rejected the demand — and rightly so. For Republicans are indeed seeking to dismantle Medicare as we know it, replacing it with a much worse program.
I’m seeing many attempts to shout down anyone making this obvious point, and not just from Republican politicians. For some reason, many commentators seem to believe that accurately describing what the G.O.P. is actually proposing amounts to demagoguery. But there’s nothing demagogic about telling the truth.
Start with the claim that the G.O.P. plan simply reforms Medicare rather than ending it. I’ll just quote the blogger Duncan Black, who summarizes this as saying that “when we replace the Marines with a pizza, we’ll call the pizza the Marines.” The point is that you can name the new program Medicare, but it’s an entirely different program — call it Vouchercare — that would offer nothing like the coverage that the elderly now receive. (Republicans get huffy when you call their plan a voucher scheme, but that’s exactly what it is.)
Medicare is a government-run insurance system that directly pays health-care providers. Vouchercare would cut checks to insurance companies instead. Specifically, the program would pay a fixed amount toward private health insurance — higher for the poor, lower for the rich, but not varying at all with the actual level of premiums. If you couldn’t afford a policy adequate for your needs, even with the voucher, that would be your problem.
And most seniors wouldn’t be able to afford adequate coverage. A Congressional Budget Office analysis found that to get coverage equivalent to what they have now, older Americans would have to pay vastly more out of pocket under the Paul Ryan plan than they would if Medicare as we know it was preserved. Based on the budget office estimates, the typical senior would end up paying around $6,000 more out of pocket in the plan’s first year of operation.
By the way, defenders of the G.O.P. plan often assert that it resembles other, less unpopular programs. For a while they claimed, falsely, that Vouchercare would be just like the coverage federal employees get. More recently, I’ve been seeing claims that Vouchercare would be just like the system created for Americans under 65 by last year’s health care reform — a fairly remarkable defense from a party that has denounced that reform as evil incarnate.
So let me make two points. First, Obamacare was very much a second-best plan, conditioned by perceived political realities. Most of the health reformers I know would have greatly preferred simply expanding Medicare to cover all Americans. Second, the Affordable Care Act is all about making health care, well, affordable, offering subsidies whose size is determined by the need to limit the share of their income that families spend on medical costs. Vouchercare, by contrast, would simply hand out vouchers of a fixed size, regardless of the actual cost of insurance. And these vouchers would be grossly inadequate.
But what about the claim that none of this matters, because Medicare as we know it is unsustainable? Nonsense.
Yes, Medicare has to get serious about cost control; it has to start saying no to expensive procedures with little or no medical benefits, it has to change the way it pays doctors and hospitals, and so on. And a number of reforms of that kind are, in fact, included in the Affordable Care Act. But with these changes it should be entirely possible to maintain a system that provides all older Americans with guaranteed essential health care.
Consider Canada, which has a national health insurance program, actually called Medicare, that is similar to the program we have for the elderly, but less open-ended and more cost-conscious. In 1970, Canada and the United States both spent about 7 percent of their G.D.P. on health care. Since then, as United States health spending has soared to 16 percent of G.D.P., Canadian spending has risen much more modestly, to only 10.5 percent of G.D.P. And while Canadian health care isn’t perfect, it’s not bad.
Canadian Medicare, then, looks sustainable; why can’t we do the same thing here? Well, you know the answer in the case of the Republicans: They don’t want to make Medicare sustainable, they want to destroy it under the guise of saving it.
So in voting for the House budget plan, Republicans voted to end Medicare. Saying that isn’t demagoguery, it’s just pointing out the truth.
By: Paul Krugman, Op-Ed Columnist, The New York Times, June 5, 2011
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June 6, 2011 Posted by raemd95 | Affordable Care Act, Budget, Conservatives, Consumers, Elections, GOP, Government, Health Care Costs, Health Reform, Ideologues, Ideology, Journalists, Lawmakers, Media, Medicare, Politics, Pundits, Republicans, Right Wing, Seniors, Under Insured, Uninsured, Voters | Canada, Canadian Health Care, Canadian Medicare, CBO, Comcast, Commentators, Demagoguery, Elderly, Government Health Insurance, House Republicans, Insurance Companies, Low Income, Medicare Vouchers, Out of Pocket xpenses, Politicians, Poor, Private Health Insurance, VoucherCare | Leave a comment