Remember When The GOP Hated Medicare Cuts?
You’ve seen hypocrisy in politics before. But rarely have you seen the brazen kind Republicans just showed on the House floor, when they voted for Budget Chairman Paul Ryan’s “Path to Prosperity.”
Ryan’s budget calls for repealing most of the Affordable Care Act, including both the insurance coverage expansions and creation of an independent board to help restrain Medicare costs. But it would leave in place the rest of the planned reductions in Medicare spending, at least for the next ten years. Among those cuts are $136 billion in reductions to Medicare Advantage plans.
As you may know, Medicare Advantage plans are the private insurance alternative, already in existence, for seniors who prefer to opt out of the traditional, government-run insurance plan. About a quarter of all seniors now use them. The government pays insurers a fee for every senior who enrolls, but studies have shown the government is paying too much. That’s how supporters of the Affordable Care Act have justified the $136 billion reduction.
Throughout the health care debate, Republicans not only rejected these and other arguments for Medicare cuts. They made the cuts a centerpiece of their attacks on Democrats, as the Associated Press noted recently:
“The new law’s massive Medicare cuts will fall squarely on the backs of seniors, millions of whom will be forced off their current Medicare coverage,” the GOP wrote in their Pledge to America, an election-season manifesto. …
In addition to the Pledge to America, House Speaker John Boehner, House Majority Leader Eric Cantor and individual Republican candidates all criticized the cuts.
The National Republican Congressional Committee featured them in ads attacking Democrats in numerous campaign commercials, and some individual candidates made use of the cuts as well.
Ryan and his supporters claim the Medicare reductions in the new Republican budget are different, because Democrats used their cuts to finance more government spending. And that’s partially true. Although Democrats bolstered Medicare drug coverage and arguably put in place policies that will lead to higher quality care, they used the bulk of the saved Medicare money to offset the cost of subsidizing insurance for working-age Americans.
But, by the same logic, Republicans are also diverting most of the Medicare Advantage money away from Medicare. They’re using that money to underwrite the cost of tax cuts for the wealthy.
So Democrats are cutting Medicare to make sure everybody has health insurance, while Republicans are cutting Medicare to make sure millionaires have tax cuts. This is really an argument the Republicans want to make?
By: Jonathan Cohn, The New Republic, April 15, 2011
Lucy, Charlie Brown And Football: The Politics Of Personal Grievance
Congressional Republicans all but dared President Obama to engage in a fiscal debate on their terms, demanding to know whether and how he’d tackle long-term debt reduction. The president agreed and presented a credible, realistic plan to cut $4 trillion from the debt over 12 years.
GOP officials obviously weren’t going to like his vision, but I’m a little surprised they’re still whining that Obama was mean to them.
The three Republican congressmen saw it as a rare ray of sunshine in Washington’s stormy budget battle: an invitation from the White House to hear President Obama lay out his ideas for taming the national debt.
They expected a peace offering, a gesture of goodwill aimed at smoothing a path toward compromise. But soon after taking their seats at George Washington University on Wednesday, they found themselves under fire for plotting “a fundamentally different America” from the one most Americans know and love.
“What came to my mind was: Why did he invite us?” Rep. Dave Camp (R-Mich.) said in an interview Thursday. “It’s just a wasted opportunity.”
Paul Ryan was reportedly “furious” and complained that the speech “was extremely political, very partisan.”
It’s worth fleshing this out, because there are some important angles to keep in mind.
First, the Republicans’ politics of personal grievance is based solely on their hurt feelings. They’re not saying the president lied or that his numbers don’t add up, but rather, they’re outraged that Obama was a big meanie. That’s kind of pathetic, and it reinforces fears that the House GOP majority is dominated by right-wing lawmakers with temperament of children.
Second, exactly what kind of reaction did Republicans seriously expect? Their fraudulent and callous budget plan, approved yesterday despite bipartisan opposition, eliminates Medicare. It punishes the elderly, the disabled, and low-income families, and rewards millionaires and billionaires. It calls for devastating cuts that would do widespread damage to the middle class and the economy. Were Republicans seriously waiting for Obama to politely pat them on the head and say, “It’s OK, you tried your best. I’ll give you an A for effort”?
Third, why is it Republicans expect one-sided graciousness? They expected a “peace offering” after pushing their own plan that was “deliberately constructed to be as offensive to Democrats as it’s possible to be,” and didn’t even bother with insincere “nods in the direction of bipartisanship.” I’ll never understand why Obama is expected to be conciliatory with those who refuse to do the same.
And finally, having a debate pitting two competing visions isn’t a bad development. Greg Sargent’s take on this rings true.
Throughout the first two years of Obama’s presidency, leading Republicans have regularly claimed that Obama is taking America towards socialism. Yet when a Democratic president stands up and aggressively defends his vision and worldview, and contrasts it sharply with that of his foes, something’s wrong. That’s not supposed to happen.
Obama’s characterization of the GOP vision was harsh. But so what? Politics is supposed to be an impassioned argument over what we all think the country should be. Is it possible to cross lines? Sure, but Obama didn’t cross any lines — in fairness, neither has Ryan — and no one was blindsided. No one was the victim of any sneak attack. We should want politicians who think their opponents’ worldviews are deeply wrongheaded to be free to say so in very vivid terms. Otherwise, what’s the point of it all?
I’d add just one last point. For two years, Obama pleaded with Republicans to play a constructive role, work in good faith, and compromise. They refused. Lucy doesn’t get to complain when Charlie Brown doesn’t want to run at a football that’s going to be pulled away anyway.
By: Steve Benen, Washington Monthly, Political Animal, April 16, 2011
“I’m Not A Politician So Let Me Be Perfectly Clear”: Raise America’s Taxes!
President Obama in his speech on Wednesday confronted a topic that is harder to address seriously in public than sex or flatulence: America needs higher taxes.
That ugly truth looms over today’s budget battles, but politicians have mostly preferred to run from reality. Mr. Obama’s speech was excellent not only for its content but also because he didn’t insult our intelligence.
There is no single reason for today’s budget mess, but it’s worth remembering that the last time our budget was in the black was in the Clinton administration. That’s a broad hint that one sensible way to overcome our difficulties would be to revert to tax rates more or less as they were under President Clinton. That single step would solve three-quarters of the deficit for the next five years or so.
Paradoxically, nothing makes the need for a tax increase more clear than the Republican budget proposal crafted by Representative Paul Ryan. The Republicans propose slashing spending far more than the public would probably accept — even dismantling Medicare — and rely on economic assumptions that are not merely rosy, but preposterous.
Yet even so, the Republican plan shows continuing budget deficits until the 2030s. In short, we can’t plausibly slash our way back to solid fiscal ground. We need more revenue.
Kudos to Mr. Obama for boldly stating that truth in his speech — even if he did focus only on taxes for the very wealthiest. I also thought he was right to say that we need spending cuts — including in our defense budget. Mr. Obama didn’t say so, but the United States accounts for almost as much military spending as the entire rest of the world put together.
As I see it, there are three fallacies common in today’s budget discussions:
• Republicans are the party of responsible financial stewardship, struggling to put America on a sound footing.
In truth, both parties have been wildly irresponsible, but in cycles. Democrats were more irresponsible in the 1960s, the two parties both seemed care-free in the ’70s and ’80s, and since then the Republicans have been staggeringly reckless.
After the Clinton administration began paying down America’s debt, Republicans passed the Bush tax cuts, waded into a trillion-dollar war in Iraq, and approved an unfunded prescription medicine benefit — all by borrowing from China. Then-Vice President Dick Cheney scoffed that “deficits don’t matter.”
This borrow-and-spend Republican history makes it galling when Republicans now assert that deficits are the only thing that matter — and call for drastic spending cuts, two-thirds of which would harm low-income and moderate-income Americans, according to the Center on Budget and Policy Priorities. To pay for tax cuts heaped largely on the wealthiest Americans, Republicans in effect would gut Medicare and slash jobs programs, family planning and college scholarships. Instead of spreading opportunity, federal policy would cap it.
• Low tax rates are essential to create incentives for economic growth: a tax increase would stifle the economy.
It’s true that, in general, higher taxes tend to reduce incentives. But this seems a weak effect, often overwhelmed by other factors.
Were Americans really lazier in the 1950s, when marginal tax rates peaked at more than 90 percent? Are people in high-tax states like Massachusetts more lackadaisical than folks in a state like Florida that has no personal income tax at all?
Tax increases can also send a message of prudence that stimulates economic growth. The Clinton tax increase of 1993 was followed by a golden period of high growth, while the Bush tax cuts were followed by an anemic economy.
• We can’t afford Medicare.
It’s true that America faces a basic problem with rapidly rising health care costs. But the Republican plan does nothing serious to address health care spending, other than stop paying bills. Indeed, Medicare is cheaper to administer than private health insurance (2 percent to 6 percent administrative costs, depending on who does the math, compared with about 12 percent for private plans). So the Republican plan might add to health care spending rather than curb it.
The real challenge is to control health care inflation. Nobody is certain how to do that, but the Obama health care law is testing some plausible ideas. These include rigorous research on which procedures work and which don’t. Why pay for surgery on enlarged prostates if certain kinds of patients turn out to be better with no treatment at all?
Ever since Walter Mondale publicly committed hara-kiri in 1984 by telling voters that he would raise their taxes, politicians have run from fiscal reality. As baby boomers age and require Social Security and Medicare, escapism will no longer suffice. We need to have a frank national discussion of painful steps ahead, and since I’m not a politician, let me be perfectly clear: raise my taxes!
By: Nicholas Kristof, The New York Times, April 13, 2011
The Selfish Budget Or The Selfless Budget
It was refreshing to hear all those unambiguous declarations from President Obama on Wednesday. “I will not” let Medicare become a voucher program or deprive families with disabled children of needed benefits. “We will” reform government health-care programs without disavowing the social compact. “I refuse” to sign another renewal of the Bush tax cuts for millionaires. Republicans “want to give people like me a $200,000 tax cut that’s paid for by asking 33 seniors each to pay $6,000 more in health costs. . . . And it’s not going to happen as long as I’m president.”
Okay, there weren’t any lines with the simple heat of “Mr. Gorbachev, tear down this wall” or the terse power of “Make my day.” But Obama’s budget manifesto represented a significant warming of his usually cool rhetoric. He said he wanted to find common ground but instead devoted much of the speech to drawing lines in the sand.
And thank goodness. If ever there were a time when lines desperately needed to be drawn, it’s now.
Before we get carried away with praise, let’s remember that even as he gets in touch with his Old Testament side, Obama is playing defense. Republicans have already forced him to accept budget cuts that he abhors, and it’s a given that more slashing and burning will follow. Obama noted the questionableness of choking off government spending at a time when the economy is struggling for altitude. Yet he proposes doing just that — which means his GOP opponents are setting the agenda.
Let’s also remember that those tax cuts for the rich were as unjust, outrageous and totally unacceptable last fall as they are today. Which many commentators noted (ahem). Before someone caved to Republican demands and signed legislation extending the millionaires’ tax break for two more years. That someone being Obama.
The president glossed over this inconvenient history. What he managed to do admirably, however, was distinguish between his vision of America and the one sketched by Rep. Paul Ryan (R-Wis.) on behalf of House Republicans. It was, as Obama’s critics charge, a political speech — and rightly so. The questions at the heart of the battle over spending and entitlements are, after all, fundamentally political.
It’s not just a matter of drawing a graph in which the line called “expenditures” meets the line called “revenue.” The question is how this intersection is made to occur. Ryan’s plan and Obama’s plan both reduce the deficit by about $4 trillion over the next decade, but they do so in starkly different ways.
Perhaps the clearest example of the difference is how the two plans would handle Medicare and Medicaid, the chief drivers of the deficit. Obama wants to maintain both programs as entitlements. He believes, as I do, that we have a collective interest in ensuring that the elderly and the poor receive the health care they need and deserve. He sees this as a matter not just of compassion but of common sense: We’ve already fallen behind other industrialized democracies in major health indicators, including life expectancy, and we certainly won’t “win the future” by becoming an unhealthier nation.
Republicans apparently believe it’s enough to ensure that state-of-the-art medical care is available to those who can afford to pay for it. Under Ryan’s plan, Medicare and Medicaid could no longer be described as true federal entitlements. This is no exaggeration, because under neither program would adequate health care be guaranteed. Seniors and the poor would, increasingly, have to fend for themselves.
The Republican plan would turn Medicare into a voucher program that subsidizes the purchase of private health insurance. So what if an individual’s insurance premiums are not covered by the voucher? So what if health costs, and premiums, continue to skyrocket? The free market will surely take care of all that, somehow or other.
On Medicaid, Republicans want to shift the burden to the states, giving them block grants and essentially telling them to take care of the indigent however they choose. Some states would be diligent in providing adequate medical care. Some would not.
Is this the kind of America we want? How selfish are we, really? How selfless? To what extent does this churchgoing nation take the biblical instruction to “love thy neighbor” seriously?
These are the kinds of basic choices we face. There are two plans on the table now. Only one of them — Obama’s — appeals to the better angels of our nature.
By: Eugene Robinson, Opinion Writer, The Washington Post, April 14, 2011
Pragmatic Policy vs Ideological Philosophy
For some time now, Democrats and Republicans alike have been yearning for a great philosophical clash between the two parties. No more of this five percent of 12 percent of the federal budget stuff. We wanted entitlements, the role of government, the obligations that the old have to the young, that the rich have to the poor, that the powerful have to the powerless.
Paul Ryan’s budget offer exactly that sort of reconstruction of the social compact. America is a very different place before his budget than it would be after his budget. But though Obama’s speech was closer to that sort of clash of visions than anything he’s offered before — he used the word “vision” 15 times, for instance — what he offered was not philosophy. It was policy. But you have to read it closely — and know where it came from — to see that.
This is difficult advice when it comes to deficit reduction, but don’t look at the number. This plan cuts $4 trillion, that plan cuts $2 trillion, that one cuts $10 trillion. Those numbers reflect little but the internal hopes and dreams of the plan. If I say that my plan means Medicare will never spend another penny and economic growth will shoot to 8 percent — and that’s only a shade less optimistic than the assumptions and models included in the Ryan budget (pdf) — I can save an almost unlimited amount of money. My number can be anything I want it to be. The problem is I actually can’t save that much money because my math is based on fantasy. So my number is meaningless.
President Obama says his plan cuts $4 trillion over 12 years. Rep. Paul Ryan says his plan cuts $4 trillion over 10 years. If you look at the numbers, the two plans appear quite similar. But if you look at how they’d get to the number, they couldn’t be more different. And it’s how you get to the number that matters, because that’s what decides whether you’ll get to the number. It’s also, incidentally, what decides the shape of our government going forward.
Ryan’s number is the product of holding the growth of Medicare and Medicaid to the rate of inflation, which is far lower than has ever been shown to be possible. How he gets there is, on Medicaid, he tells the states to figure it out, and on Medicare, he tells seniors to figure it out. Both strategies have been tried: Various states have gotten waivers to radically remake their Medicaid program, and the consumer-driven model that Ryan is proposing for Medicare has been attempted in the Federal Employee Health Benefits Program and Medicare Advantage. None of these programs have worked, which is why we’re in our current predicament.
Obama’s number is the product of holding Medicare growth to GDP+0.5 percent — which is, in practice, a few percentage points beyond inflation, and a few percentage points behind the health-care system’s normal rate of growth. He mostly gets there through the cost controls passed as part of the Affordable Care Act, which hope to hold Medicare to GDP+1 percent. He then proposes to shave a further half-percentage point off the growth rate by introducing value-based insurance — where we pay more for treatments that are proven to work than for treatments that are not proven to work — into Medicare and giving generic drugs quicker entry into the marketplace. These programs have worked at smaller scales and in more limited pilots. We don’t know if they’ll work across the entire Medicare system, but we have reason to think they will.
Then there are taxes. Ryan’s plan pledges to make the Bush tax cuts permanent, at a cost of at least $4 trillion over 10 years, and more after that. He’d then clean out the tax code, but he’d pump the money he made from closing expenditures back into tax cuts. Obama proposes to return to the Clinton-era tax rates on income over $250,000 and then raise a further trillion through closing tax expenditures. Altogether, that’s about $2 trillion less than letting all the Bush tax cuts expire, but at least $2 trillion more than Ryan’s plan. Notably, Obama hasn’t said which expenditures he’d close to get to $1 trillion. The difference between the two tax plans — particularly when added to Obama’s decision to cut $400 billion from security-related spending, while Ryan largely exempts that category — explains why Obama doesn’t have to make such deep cuts in programs for seniors and low-income Americans.
So are we finally getting the grand philosophical debate we wanted? Not quite. Obama spoke extensively of vision — the GOP’s, which “claims to reduce the deficit by spending a trillion dollars on tax cuts for millionaires and billionaires … {while} asking for sacrifice from those who can least afford it and don’t have any clout on Capitol Hill,” and his, “where we live within our means while still investing in our future; where everyone makes sacrifices but no one bears all the burden; where we provide a basic measure of security for our citizens and rising opportunity for our children,” but he’s overselling it.
Obama’s budget is not philosophy. It is very similar to the Simpson-Bowles report, which attracted the votes of Republicans as far to the right as Tom Coburn. Few Democrats would say their vision of balancing the budget is one in which there was only one dollar of new taxes for every three dollars of spending cuts, but that’s what Obama’s proposal envisions. Obama’s budget, somewhat curiously, is what you’d expect at the end of a negotiation process, not the beginning. In fact, as it’s modeled off of Simpson-Bowles, it is the product of a negotiation process, as opposed to an opening bid. It is, in other words, policy. You could argue that this is a philosophy, and that philosophy is pragmatism, but I think that’s getting too cute. This is the sort of policy that might pass and might work.
Ryan’s budget is purer, but it is also more fantastical. It posits the government it wishes were possible, and the policies it wishes would work. It is an opening bid so ideological that it leaves little room for a process of negotiation. Every dollar it purports to raise comes from cutting spending. Not one comes from taxes. It privatizes Medicare and unwinds the federal government’s role in Medicaid. For all the philosophy in his budget — and his budget does have a very different philosophy about the proper role of government than we see in federal pllicy today — there’s neither policy that could pass nor policy that could work. And, curiously for a conservative who distrusts both government and congress, it has no answer to the question of “what if this fails?”
The policy that clarifies this difference is the “trigger.” Obama’s budget, aware that it might not pass and, if it does pass, it might not work, proposes to make automatic cuts to discretionary spending and tax expenditures if the promised savings don’t materialize. If Ryan’s budget falls shorts, there’s no comparable failsafe. That is to say, Obama’s budget has two plausible ways to get to its number, while Ryan’s budget has none. You don’t need a PhD in philosophy to understand why that’s a problem.
By: Ezra Klein, The Washington Post, April 13, 2011
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