Age Gap: The GOP’s Generational Weapon In The Medicare Fight
To senior citizens at town hall meetings angry or worried about their plan to convert Medicare to a private insurance scheme, Republicans have a simple answer: It’s not about you. You’ll be fine. This is for “the next generation.”
The next generation is everyone 55 or under, since the plan would not start for ten years and would affect only newly eligible seniors. The stated logic of the ten-year delay is that it takes time to put the system in place and that people need time to plan. But if “premium support” (a euphemism right up there with “enhanced interrogation”) were ever going to work, it could be implemented as quickly as the Affordable Care Act (four years) or Medicare’s prescription drug coverage (two years). Presumably, the delay is mostly a political kludge, intended to avoid a backlash from those now or soon to be dependent on Medicare by affecting only those young enough to be giving little thought to retirement health coverage.
But the line they chose is more than a gimmick: The 55-and-over cutoff marks a sharp and significant generational divide. Those over 55 will continue to benefit from one of the triumphs of social insurance in the Great Society, while the rest of us will be on our own, with a coupon for private health insurance. If you consider what it means to be 55 years old in 2011, you’ll see the significance of the line.
Today’s 55-year-old was born in 1956. That’s not generally considered a major break in the generations. It’s smack in the middle of the Baby Boom (the peak of the boom, in fact), with almost a decade to go before the first Gen-Xers were born, dreaming of Winona Ryder. But the difference between early and later Boomers, especially in their experience of the economy, is dramatic.
A baby born in 1956 would have graduated from high school in about 1974, from college in 1978 or so. Look at almost any historical chart of the American economy, and you see two sharp breaks in the 1970s. First, in 1974, household incomes, which had been rising since World War II, flattened. Real wages started to stagnate. The poverty rate stopped falling. Health insurance coverage stopped rising. Those trends have continued ever since.
Second, a little later in the decade, around the time today’s 55-year-olds graduated from college (if they did—fewer than 30 percent have a four-year degree), inequality began its sharp rise, and the share of national income going to the bottom 40 percent began to fall. Productivity and wages, which had tended to keep pace, began to diverge, meaning that workers began seeing little of the benefits of their own productivity gains. The number of jobs in manufacturing peaked and began to drop sharply. Defined benefit pensions, which provide a secure base of income in retirement, began to give way to 401(k)s and similar schemes that depend on the worker to save and the stock market to perform. While the benefits of higher education rose, college tuitions started to rise even faster. Those trends, too, have continued.
If there was ever going to be a generational war in this country, that high school class of ’74 would be its Mason-Dixon line. It’s the moment when Bill Clinton’s promise—“if you work hard and play by the rules you’ll get ahead”—began to lose its value. Today’s seniors and near-seniors spent much of their working lives in that postwar world, with their incomes rising, investments gaining, their health increasingly secure, and their retirements predictable. Everyone 55 and younger spent his or her entire working life in an economy where all those trends had stalled or reversed. To borrow former White House economist Jared Bernstein’s phrase, it was the “You’re On Your Own” economy. Finally, those 55-year-olds are spending several of what should be their peak earning years, years when they should be salting away money in their 401(k)s and IRAs, in a period of deep recession and very slow recovery.
The Ryan plan, in other words, delivers to the older generation exactly what they’ve had all their lives—secure and predictable benefits—and to the next generation, more of what they’ve known—insecurity and risk. It’s hardly the first generational fight the GOP has started. The previous one was just last fall, when they campaigned for Medicare, and against the $500 billion in cuts (mostly by getting rid of the overgenerous subsidies to private insurers in an experimental program) passed as part of the Affordable Care Act. With an off-year electorate that was overwhelmingly older, they could put all their bets on the older side, knowing that seniors would see little benefit from the Affordable Care Act and were naturally worried about any change to the health system they enjoyed.
Heading into the 2012 election, however, the electorate is likely to shift back to one in which younger and middle-aged voters vote in proportion to their share of the population, so a “Mediscare” campaign won’t work. This time, the GOP hopes to play both sides of the generational war, gambling that while seniors want security, younger voters never expected the certainty of Medicare, just as they don’t expect reliable pensions or Social Security benefits, and thus will embrace a plan that sounds innovative, flexible, and market-based. Contending that the only alternative to premium support is the end of Medicare entirely, they are offering a generation that is accustomed to getting less than their parents a little bit, rather than nothing.
This strategy is a variation on the generational conflict the Bush Administration tried to launch in 2005 over Social Security privatization. Although it never reached the level of specificity that Ryan achieved, the calculus was the same: Younger voters would welcome the opportunity to take advantage of the stock market for their retirement, rather than the stodgy and predictable system their parents and grandparents liked.
That wager didn’t work, however: It turned out that older voters were terrified of Social Security privatization and younger voters unenthusiastic. Within five months, the radical move that every pundit thought was a near-certainty when George W. Bush declared “I’ve got political capital and I intend to use it,” had disappeared, never even introduced as legislation. And despite this week’s relaunch of the Ryan plan, it’s likely to end in the same result. If Social Security is any precedent, younger voters will be indifferent, while older voters won’t believe they’re exempt. The Republicans will again walk away from the conflict, hoping to get credit for being “serious” without bearing a political price for the error.
For Democrats, the defeat of the Ryan plan, like the failed Social Security privatization before it, will be regarded as a great victory, and an opportunity to get a fresh start with worried older voters. But they should not ignore the generational divide revealed by Ryan’s cutoff. If progressive politics has nothing to offer the late Boomers and the generations that follow except the same old programs, and nothing that responds to their distinctive experience of the economy, then eventually they’ll fall for one of these gimmicks from the right.
By: Mark Schmitt, The New Republic; Senior Fellow, Roosevelt Institute, May 20, 2011
A Straight-Talking, Truth-Telling Machine?: Tim Pawlenty’s Version Of The “Truth”
Former Minnesota Gov. Tim Pawlenty formally kicked off his Republican presidential campaign yesterday, and after struggling to come up with a rationale for his candidacy, he’s apparently settled on a theme. Pawlenty, we’re told, will be a straight-talking, truth-telling machine.
As rationales go, I suppose this isn’t bad. Indeed, Pawlenty took steps to back this up, telling Iowans he wants a gradual phasing out of federal ethanol subsidies, and noting that he’s headed to Florida to endorse overhauling Medicare and Social Security. Pawlenty has spent many years saying the exact opposite, but why quibble? This is the new Pawlenty, speaking truth to power, and adopting the mantle of the last honest man in American politics — or so we’re supposed to believe.
But for a man who used the word “truth” 16 times in his campaign kick-off speech, Pawlenty is already undercutting his message with all kinds of falsehoods.
An hour after his official launch, Pawlenty talked to Rush Limbaugh, who noted in 2006 that Pawlenty said that “the era of small government is over” and that “government has to be more proactive, more aggressive.” Pawlenty responded that the newspaper article that published those remarks was wrong; the paper ran a correction; and that he was only quoting someone else.
Dana Milbank looked into this and discovered that Pawlenty “had taken some liberties with the facts.”
The article is all about Pawlenty’s efforts as governor to take on drug and oil companies and other practitioners of “excessive corporate power.” It includes his boast that many ideological Republicans “don’t even talk to me anymore” because of his support for things such as the minimum wage.
“The era of small government is over,” Pawlenty told the newspaper. “I’m a market person, but there are certain circumstances where you’ve got to have government put up the guardrails or bust up entrenched interests before they become too powerful…. Government has to be more proactive, more aggressive.”
The newspaper did issue a “clarification,” but only to say that Pawlenty’s quote about small government was “in reference to a point” made by the conservative writer David Brooks — one that Pawlenty, from his other comments, obviously agreed with.
Of course he did. In 2006, Pawlenty wasn’t well liked by the far-right, as he defended big government, endorsed cap-and-trade, wanted to reimport prescription medication from Canada, and wanted officials to be more effective and aggressive in fighting the oil industry.
Everything he told Limbaugh yesterday, just like the new persona he’s struggling to adopt, just isn’t true.
And really, that’s just scratching the surface. Wonk Room ran a fact-check piece yesterday, noting seven obvious lies Pawlenty told yesterday, on issues ranging from health care on the nation’s finances. Similarly , the AP ran a similar piece, highlighting several more of the candidate’s falsehoods from yesterday.
Pawlenty needs to realize that those who base their entire message on offering candor and uncomfortable truths face an even tougher burden — they’re inviting even tougher scrutiny. By lying repeatedly on his first day as a national candidate, Pawlenty is off to an ignominious start.
By: Steve Benen, Contributing Writer, Washington Monthly, Political Animal, May 24, 2011
A “No New Taxes” Pledge Is A Death Trap For Seniors
This has to be one of the funniest political stories of recent weeks: On Tuesday, 42 freshmen Republican members of Congress sent a letter urging President Obama to stop Democrats from engaging in “Mediscare” tactics — that is, to stop saying that the Republican budget plan released early last month, which would end Medicare as we know it, is a plan to end Medicare as we know it.
Now, you may recall that the people who signed that letter got their current jobs largely by engaging in “Mediscare” tactics of their own. And bear in mind that what Democrats are saying now is entirely true, while what Republicans were saying last year was completely false. Death panels!
Well, it’s time, said the signatories, to “wipe the slate clean.” How very convenient — and how very pathetic.
Anyway, the truth is that older Americans really should fear Republican budget ideas — and not just because of that plan to dismantle Medicare. Given the realities of the federal budget, a party insisting that tax increases of any kind are off the table — as John Boehner, the speaker of the House, says they are — is, necessarily, a party demanding savage cuts in programs that serve older Americans.
To explain why, let me answer a rhetorical question posed by Professor John Taylor of Stanford University in a recent op-ed article in The Wall Street Journal. He asked, “If government agencies and programs functioned with 19% to 20% of G.D.P. in 2007” — that is, just before the Great Recession — “why is it so hard for them to function with that percentage in 2021?”
Mr. Taylor thought he was making the case for not increasing spending. But if you know anything about the federal budget, you know that there’s a very good answer to his question — an answer that clearly demonstrates just how extremist that no-tax-increase pledge really is. For here’s the quick-and-dirty summary of what the federal government does: It’s a giant insurance company, mainly serving older people, that also has an army.
The great bulk of federal spending that isn’t either defense-related or interest on the debt goes to Social Security, Medicare and Medicaid. The first two programs specifically serve seniors. And while Medicaid is often thought of as a poverty program, these days it’s largely about providing nursing care, with about two-thirds of its spending now going to the elderly and/or disabled. By my rough count, in 2007, seniors accounted, one way or another, for about half of federal spending.
And in case you hadn’t noticed, there will soon be a lot more seniors around because the baby boomers have started reaching retirement age.
Here are the numbers: In 2007, there were 20.9 Americans 65 and older for every 100 Americans between the ages of 20 and 64 — that is, the people of normal working age who essentially provide the tax base that supports federal spending. The Social Security Administration expects that number to rise to 27.5 by 2020, and 31.7 by 2025. That’s a lot more people relying on federal social insurance programs.
Nor is demography the whole story. Over the long term, health care spending has consistently grown faster than the economy, raising the costs of Medicare and Medicaid as a share of G.D.P. Cost-control measures — the very kind of measures Republicans demonized last year, with their cries of death panels — can help slow the rise, but few experts believe that we can avoid some “excess cost growth” over the next decade.
Between an aging population and rising health costs, then, preserving anything like the programs for seniors we now have will require a significant increase in spending on these programs as a percentage of G.D.P. And unless we offset that rise with drastic cuts in defense spending — which Republicans, needless to say, oppose — this means a substantial rise in overall spending, which we can afford only if taxes rise.
So when people like Mr. Boehner reject out of hand any increase in taxes, they are, in effect, declaring that they won’t preserve programs benefiting older Americans in anything like their current form. It’s just a matter of arithmetic.
Which brings me back to those Republican freshmen. Last year, older voters, who split their vote almost evenly between the parties in 2008, swung overwhelmingly to the G.O.P., as Republicans posed successfully as defenders of Medicare. Now Democrats are pointing out that the G.O.P., far from defending Medicare, is actually trying to dismantle the program. So you can see why those Republican freshmen are nervous.
But the Democrats aren’t engaging in scare tactics, they’re simply telling the truth. Policy details aside, the G.O.P.’s rigid anti-tax position also makes it, necessarily, the enemy of the senior-oriented programs that account for much of federal spending. And that’s something voters ought to know.
By: Paul Krugman, Op-Ed Columnist, The New York Times, May 12, 2011
Boehner The Extortionist: “Give Us Trillions In Cuts In Medicare and Medicaid Or We Blow Up The Economy”
Stripped of its politician’s gloss, this is the message that House Speaker John Boehner delivered to Wall Street Monday in discussing the price Republicans demand for raising the debt ceiling.
Boehner portrays himself as a reluctant extortionist: “It’s true that allowing America to default would be irresponsible.” But he told the barons of Wall Street he has no choice. The Tea Party made him do it: “Washington’s arrogance has triggered a political rebellion in our country. And it would be more irresponsible to raise the debt ceiling without simultaneously taking dramatic steps to reduce spending and reform the budget process.”
Notice the Speaker’s phrasing. He curses deficits and debt but he isn’t focused on them. He is focused on “our spending addiction.” “Everything is on the table,” he says, “with the exception of tax hikes.”
And even that is a half-truth, since Boehner and his party have also no appetite for real cuts in the defense budget. Boehner isn’t pushing to get out of Iraq and Afghanistan and roll back the costly U.S. global police role. In the budget that Boehner pushed through the House, Republicans voted to give the Pentagon back most of the relatively nominal defense cuts that Defense Secretary Robert Gates had projected over the next years. And many harshly censored the president for suggesting that another $400 billion in cuts might be chipped out of the more than $8 trillion the Pentagon will spend over the next 12 years.
So if tax hikes aren’t allowed—even though the wealthiest Americans are now paying a lower effective tax rate than their chauffeurs—and defense cuts are off the table, how does Boehner propose to get “trillions” in spending cuts? Medicare and Medicaid get the ax. Or as Boehner puts it in politician speak, “Everything on the table” includes “honest conversations about how best to preserve Medicare.”
The budget math is inescapable. The federal government, as Paul Krugman puts it, is basically an insurance system for our retirement years that also has an army. About half of the government’s spending is in retirement programs—Social Security, Medicare, much of Medicaid and other insurance programs. Defense is half of the rest. All of the rest of government —public health, environmental protection, the IRS, the FBI and Justice Department, education, Pell grants, roads, health research, R&D—consumes the last fourth. When Republicans take taxes and defense off the table, and call for trillions in spending cuts and you have no choice but to go after Medicare, Medicaid and/or Social Security.
Which of course is what they are doing. The House budget cuts nearly $800 billion out of Medicaid over the next five years—and ends Medicare as we know it.
There is a bitter irony to this. The current deficits stem largely from three sources—the Bush tax cuts, the two wars that were fought on the tab, and the Great Recession that cratered tax revenues and lifted spending on everything from unemployment to food stamps to the recovery spending. Boehner argues that “adding nearly a trillion to our national debt—money borrowed mostly from foreign investors—caused a further erosion of economic confidence in America.” But he ignores the trillions added to the debt by the Bush tax cuts, the wars and the Great Recession, focusing only on the Obama recovery spending, which made the smallest contribution of all of these to the deficits. And, he rules out reversing the top-end tax cuts or cutting the military spending to address the deficits that they helped to create. (And if we actually adopt his policies, he’s likely to extend the Great Recession as well).
Boehner argues that adopting his position would show that Washington is “starting to get the message” from the American people. But Boehner isn’t hearing what most Americans are saying. Americans are concerned about deficits, and they are certain that government wastes significant portions of their money. They also oppose the billions squandered on subsidies and tax breaks for Big Oil, Big Pharma, Agribusiness and the like—tax breaks that Republicans defend, arguing that repealing them constitutes a tax increase.
In fact, the vast majority of Americans don’t agree with Boehner’s priorities. The Campaign for America’s Future, which I help direct, has started an American Majority campaign to remind the media of this fact. Three quarters oppose cutting Medicare to help balance the budget. Two thirds oppose raising the retirement age. Three fourths oppose cutting state funding for Medicaid. Over 60 percent favor raising taxes on those making over $250,000 to help reduce the deficit. A growing majority think defense cuts ought to be on the table.
Boehner wants to extort his cuts now—at a time when the economy is struggling, and the country is suffering from mass unemployment. With interest rates near record lows, the construction industry idle and our infrastructure in deadly state of disrepair, the country would be well advised to use this occasion to invest in rebuilding the country, and put workers back to work.
Instead, Boehner offered Wall Streeters a shower of conservative shibboleths, stuck randomly like pieces of lint on a serge suit. “The massive borrowing and spending by the Treasury Department crowded out private investment by American businesses of all sizes,” he argued to what must have been a bemused audience well aware that with interest rates low, and business sitting on trillions in capital waiting for demand to pick up, the only “crowding out” comes from ideology displacing reality in Boehner’s head..
Boehner argues that business people crave stability. Even the mere threat of tax hikes causes them to retreat from investments they might otherwise make. Regulatory changes are similarly disruptive:
“For job creators, the ‘promise’ of a large new initiative coming out of Washington is more like a threat. It freezes them. Instead of investing in new employees or new equipment, they make the logical decision to stand pat.” Sadly, Boehner didn’t explain why the threat to blow up the economy if he can’t get trillions in unidentified spending cuts doesn’t constitute the “promise” of a large new initiative coming out of Washington.”
What happens now? Boehner’s position is untenable. He is holding a hostage—the economy—that he dare not shoot. He is demanding trillions in cuts from programs that he dare not name. He is looking for a back room negotiation in which he can get the president to give him cover in enacting cuts that are unpopular to the American people and likely to be ruinous to the economy. If the president falls for it, Republicans make progress in dismantling the Medicare program that they have always opposed, and the president takes the rap for the bad economy.
What’s to be done? Jonathan Chait gets it right. The president—and the country—would benefit from an open discussion, not a backroom negotiation. The president needs to call Boehner out. What are the trillions in cuts that he wants as the price for letting the economy go free? If he lays them out, as in passage of the House budget plan that ends Medicare as we know it, the President can show Americans why they are unacceptable, and use the bully pulpit to take the case to the country. If Boehner isn’t prepared to lay out his cuts, call his bluff. Surely he can’t long threaten to cripple the economy if he doesn’t get cuts that he isn’t prepared to define.
One thing Boehner says rings true. Americans are sick of the arrogance in Washington. But it is hard to imagine a more arrogant politician than one threatening to blow up the economy if he doesn’t get his way.
By: Robert Borosage, CommonDreams.org, May 10, 2011
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