“Laying It All Out On Medicare”: No Mistaking Paul Ryan’s Policy
The release of a new Paul Ryan budget plan is always the occasion for a lot of ridicule from liberals, for a whole bunch of reasons, and this year’s will be no different. Ryan’s budgets always manage to combine a remarkable cruelty toward poor people with a sunny optimism that draconian cuts to social services will result in a veritable explosion of economic growth, allowing us to balance the budget without taking anything away from the truly important priorities (like military spending) or, heaven forbid, forcing wealthy people to pay more in taxes.
I’m sure there are other people preparing detailed critiques of the Ryan budget, but I want to focus on one thing this brings up: the question of how we talk about Medicare. As he has before in his budgets, Ryan proposes to repeal the benefits of the Affordable Care Act, like subsidies for middle-class people to buy insurance and the expansion of Medicaid, but he’d keep the tax increases and Medicare cuts that the bill included in order to pay for it all, which helps him achieve his “balanced” budget.
Yes, it’s true that when Ryan was running for vice president, he joined Mitt Romney in condemning those very Medicare savings. But nobody really believed he was doing anything at the time but being a team player. So we can give him credit for taking at least a step toward putting his money where his mouth is on Medicare. Sure, it may be couched in some misleading words (the document refers to “strengthening Medicare” no fewer than ten times), but there’s no mistaking the policy.
Because the rest of his party is, to put it kindly, of two minds when it comes to the program. On one hand, they will tell you, Medicare is unsustainable, a ravenous beast that will devour the entire nation’s financial well-being if we don’t find a way to suppress its appetite. In Washington-speak, this is translated as “doing something about entitlements.” We have to Do Something About Entitlements! If you don’t want to Do Something About Entitlements, you’re just not serious about our nation’s fiscal challenges.
On the other hand, Republicans believe that Medicare is utterly sacrosanct, a jewel whose every facet is so perfect that even the most modest attempt to curtail its costs should be met with howls of anguish and outrage. Or at least that’s what they believe at election time, when they’ll air one ad after another condemning Democrats for cutting the Medicare seniors so desperately need. Democrats all over the country have been subjected to ads saying, “Congressman Fnurbler voted to cut $716 billion from Medicare!” over a picture of an elderly couple sitting at the kitchen table, looking over their bills with an engulfing despair, then meeting each other’s eyes in a tragic look that says, “Thanks to Congressman Fnurbler, all is lost. If only we had been able to pay our gas bill so we could stick our heads in the oven and end it all right now.”
Republicans are so deeply opposed to the idea of cutting Medicare that they can’t even stomach anyone trying to see if Medicare is spending its money wisely. Mention the Independent Payment Advisory Board, a component of the ACA that was designed to restrain Medicare costs if they rose too fast, and steam will come out of their ears. (The IPAB would make recommendations to Congress on ways to save money, and Congress would have to act on them. But since Medicare spending has slowed dramatically in the last couple of years, the requirement has yet to kick in, and President Obama hasn’t bothered to appoint anyone to what is still a theoretical board.) They waged a virtual war on comparative effectiveness research, effectively saying that it was dangerous to even ask which competing treatments work well and which don’t.
In other words, most Republicans believe we must, must, must reduce the cost of Medicare—excuse me, Do Something About Entitlements—but are adamantly opposed to every step that has been taken to reduce the cost of Medicare. I’m sure that lots of them are sympathetic to Ryan’s vision, which is to essentially turn the program into a voucher system, in which the government helps you buy private insurance, and over time costs magically go down (and if you’re thinking that sounds a lot like what people are getting on the Obamacare exchanges, any Republican will tell you that it’s totally different because freedom).
So let’s give Paul Ryan some credit. Sure, his numbers might not add up. But when he puts out a budget, there’s no mystery about where he’s coming from and what he wants to do.
By: Paul Waldman, Contributing Editor, The American Prospect, April 1, 2014
“Holding Corporate Monarch’s Accountable”: Steering America Toward A More Secure Retirement
To the let’s-cut-entitlements crowd, what’s wrong with America is that seniors are living too high off the hog. With the cost of medical care still rising (though not as fast as it used to), the government is shelling out many more dollars per geezer (DPG) than it is per youngster (DPY). The solution, we’re told, is to bring down DPG so we can boost DPY.
We do indeed need to boost DPY. And we need to rein in medical costs by shifting away from the fee-for-service model of billing and paying. But as for changing the way we calculate cost-of-living adjustments for seniors to keep us from overpaying them — an idea beloved of Bowles, Simpson, Republicans and, apparently, the White House — this may not be such a hot idea, for one simple reason: An increasing number of seniors can’t afford to retire.
Nearly one in five Americans age 65 and over — 18.5 percent — were working in 2012, and that percentage has been rising steadily for nearly 30 years. In 1985, only 10.8 percent of Americans 65 and older were still on the job, and in 1995, that figure was 12.1 percent.
Both good news and bad news have contributed to this increase. The good news is that more seniors both can and want to work than in years past, as health care and medical science have extended their capabilities, and as the share of Americans in desk jobs has increased while the number on the factory floor has shrunk. A 2011 survey by the Society of Actuaries reported that 55 percent of working seniors said they had stayed employed because they wanted to stay active and involved. But the same survey showed that 51 percent were working because they needed the money.
What advocates for reducing Social Security adjustments fail to consider is that corporate America’s shift away from defined-benefit pensions to defined-contribution 401(k) plans — or to no retirement plans at all — has diminished seniors’ non-Social Security income and made the very idea of retirement a far more risky prospect. Today, more than half of U.S. workers have no workplace retirement plan. Of those who do, just 35 percent still have defined-benefit pensions. In 1975, 88 percent of workers with workplace retirement plans had defined-benefit pensions.
The shift from traditional pensions to 401(k)s is one of the main reasons most seniors aren’t able to set aside enough income to guarantee a secure retirement. A 2010 survey by the Federal Reserve found that the median amount saved through 401(k)s by households approaching retirement was $100,000 — not nearly enough to support those households through retirement years, as seniors’ life expectancy increases. And as most Americans’ wages continue to stagnate or decline, their ability to direct more of their income to 401(k)s diminishes even more.
With the eclipse of the defined-benefit pension, Social Security assumes an even greater role in the well-being of American seniors. But advocates of entitlement cuts don’t even discuss the waning of other forms of retirement security: Listening to Alan Simpson, you’d never know that America’s elderly aren’t getting the monthly pension checks their parents got.
And it’s not as if those employers are suffering. Just as U.S. businesses have been able to raise the share of corporate profits to a half-century high by reducing the share of their workers’ wages to a half-century low, so, too, their ability to reduce pension payments has contributed not just to their profits but also to the $1.7 trillion in cash on which they are currently sitting.
So here’s a modest plan to enable seniors to retire when they wish, rather than having to work into their 70s and even beyond: Require employers to put a small percentage of their revenue, and a small percentage of their workers’ wages, into a private, portable, defined-benefit pension plan. To offset the increased costs, transfer the costs of paying for workers’ health care from employers and employees to the government, and pay for the increased costs to the government with the kind of value-added tax that most European nations levy. (The tax burden is higher in Europe, but because the level of benefits is higher as well, the tax has wide public support.)
The odds of such a plan being enacted today, of course, are nil. (Then again, the odds of any bill getting through Congress these days are close to nil.) But until we compensate for, or reverse, the abdication of corporate America from any major role in providing its workers with retirement security, we should lay off monkeying with Social Security to reduce the program’s future payments. As for all those cash-drenched chief executives who proclaim that we must cut entitlements, how about they make up the difference by restoring the pensions their companies slashed?
By: Harold Meyerson Opinion Writer, The Washington Post, March 6, 2013
“Rights Are Not Entitlements”: Fundamental Human Rights Are Not Items That legislation Should Be Able To Take Away
As Americans discuss our system of social supports, we constantly hear the word “entitlements” and rarely the word “rights.” Of course, in America the word “entitlements” is not a neutral word. Rather, it is a loaded word, laced with specific attitudes and associations in both the speaker’s mouths and listener’s ears.
Instead of repeating facts about how America’s system of social supports is substantially smaller than nearly every other wealthy democratic country or the simple fact that America is the wealthiest country in the history of the world, it is important to pause to think about the concept of human rights.
A good starting point for thinking about human rights is the Universal Declaration of Human Rights, a declaration authored by a number of international delegates (including former First Lady Eleanor Roosevelt) and adopted by the United States and other members of the United Nations in 1948. This document builds on other declarations of human rights that have occurred in the past including our own Declaration of Independence’s statement of the right to “life, liberty and the pursuit of happiness.”
In our era of drone strikes without a judicial process, it is important to point out that the Universal Declaration of Human Rights states that “Everyone is entitled in full equality to a fair and public hearing by an independent and impartial tribunal, in the determination of his rights and obligations and of any criminal charge against him.”
In our era of for-profit prisons pushing legislation to increase America’s already world-leading incarceration rates even higher, our era of prison gerrymandering and prison labor, it is important to point out that the Universal Declaration of Human Rights states that “No one shall be held in slavery or servitude.”
In our era of Guantanamo Bay and Abu Ghraib, it is important to point out that the Universal Declaration of Human Rights states that “No one shall be subjected to torture or to cruel, inhuman or degrading treatment or punishment. No one shall be subjected to arbitrary arrest, detention or exile.”
In our era of attempts to slash support for the unemployed and aggressive attempts to dismantle the rights of labor to organize, it is important to point out that the Universal Declaration of Human Rights states that “Everyone has the right to work, to free choice of employment, to just and favorable conditions of work and to protection against unemployment.”
In our era of attacks on America’s already minimal social security system, it is important to point out that the Universal Declaration of Human Rights states that “Everyone has the right to security in the event of unemployment, sickness, disability, widowhood, old age or other lack of livelihood in circumstances beyond his control.”
There was a time when our nation eloquently wrote and spoke in support of the basic rights of humans yet we have consistently abandoned those words, time after time, action after action, century after century.
Often when someone suggests that America needs to slash “entitlements,” I find myself asking two simple questions, “What are the most fundamental human rights and what role should governments play in guaranteeing those fundamental human rights?” After all, fundamental human rights are not items that legislation should be able to give and take away with the stroke of a pen or the barrel of a gun.
By: Howard Steven Friedman, Open Salon Blog, Salon, February 28, 2013
“But For Protecting The Middle Class”: Still Believe President Obama Seeks A Permanent American Socialist State?
One of the strangest—and for me, most annoying—perversions of politics in the Obama era is the meme pursued by so many on the right suggesting that this president is a raging socialist who seeks to install a permanent welfare state in America—despite all evidence to the contrary.
In the wake of the fiscal cliff deal—supported not only by the President but by an overwhelming vote of elected Democrats—we should now be able to put this foolishness to rest once and for all as we acknowledge a simple and clear reality—
If Barack Obama is indeed a socialist, he must be the absolute worst socialist in recorded history.
How do we now know this beyond any reasonable question of a doubt?
Any good conservative will be among the first to tell you that financing a permanent welfare state takes huge amounts of money—money that can only be raised by taxing a wide swath of the nation’s citizenry. And yet, the President just pushed through a law permanently lowering taxes for some 99 percent of all Americans— and was hailed as a big winner for his effort to do so.
For someone who would prefer to be President of, say, Sweeden, such a deal could only be viewed as a crushing defeat, not a political victory.
And if you somehow imagine that the President believes he can accomplish the financing of his “European style welfare state” through the rather meager increase in progressive tax rates now to be levied on the nation’s largest earners, I would suggest you take heed of the many conservatives who have incessantly reminded us over these past few months that the sum total of the tax increases on the rich will only serve to fund government for a few days a year—clearly nowhere near enough cash to fund a true, socialist agenda.
Still, I know what you’re thinking…the President is planning to create his socialist paradise by borrowing and printing all the money required to pay the high cost of the expanded welfare state he covets.
Sorry…it just doesn’t work and the President would know this better than just about anyone.
While borrowing money may be the modus operandi for filling in the shortfalls when it comes to financing entitlement programs in an era of relatively low taxes (at least comparatively speaking) and a dramatic increase in the senior population depending upon entitlement programs, I suspect even the most conservative economists would tell you —correctly I would add—that all of our available borrowing power is strained just trying to stay even with our entitlement and defense obligations, let alone expand entitlements to the point where we would even approach a government philosophy that could be comparable with a European socialistic society.
Indeed, even if the President chose to press for more borrowing or printing, he could, at best, only do so in support of the existing entitlement programs as it would take an act of Congress to expand the system.
Does anyone believe the Congress is heading in the direction of expanding entitlements? We have a House of Representatives gerrymandered into GOP control for a period likely to last at least until the end of the decade—meaning it will outlive Obama’s second term.
Thus, when Obama got behind preserving the Bush tax cuts for all but the wealthiest Americans, he did so knowing that he would never be able to expand the entitlement programs at any time during the remainder of his term. If it was a socialist society he was seeking, he had but one chance and that was to raise taxes on everyone, not just the very wealthy.
So, exactly how is it possible that a President and a Democratic Party—hell bent on creating this permanent welfare state in America—could support any deal that would not allow the Bush tax cuts to sunset as scheduled so that tax rates would return to the larger numbers of the Clinton era?
Such support would make no sense for anyone favoring expansion of the welfare state. And yet, this President chose to support the permanent lowering of taxes on the middle class as did his party.
While you may be displeased with the fiscal cliff compromise for any number of reasons, including the failure of the parties to do much of anything about spending, the simple fact remains that—for better or for worse—decades of Democratic Party/progressive tax philosophy went out the window last week when an overwhelming majority of Democrats voted to support the fiscal cliff deal—and with it went any rational support for the notion that President Obama and his party have some secret, European socialist vision in mind for the country.
All you need do to understand this is take a look at the number of Congressional Democrats who cast their votes in support of the two pieces of legislation that produced the Bush tax cuts and compare those votes to the vote of the Congressional Democrats making those very cuts permanent for approximately 99 percent of all Americans.
The vote tally for the 2001 bill that created the first round of the Bush tax cuts delivered just 28 votes in support from House Democrats. The second round—which came in 2003—could only muster up 7 Democratic votes in support.
The vote this week to make these very same tax cuts permanent received overwhelming support from House Democrats, who cast 172 votes in favor of very likely ending middle class tax increases during our lifetime—and they did so at the specific behest of the same Democratic president who many argue is committed to creating the American welfare state.
That simply does not add up for a President looking to create France in America.
As a result, one cannot rationally argue that the President, and his party— who cast their support in favor of leaving more money in the pockets of 99 percent of Americans so that they could spend the money supporting the businesses of America rather than handing it over to government to spend it for them—desire the path of socialism.
While I’m certain there will be no shortage of issues available to those wishing to attack the President, can we now dare to hope that the next time someone feels the need to vent, they might do so without the whole “Obama is a socialist” narrative?
I hope so. What was a silly narrative before the fiscal cliff deal, it is an embarrassingly preposterous narrative today.
By: Rick Ungar, Op-Ed Contributor, Forbes, January 6, 2013
“Mitt Romney’s Entitlement Society”: Winning For Losing, Money That Flow’s To The Wealthy
Mitt Romney, who secured the number of delegates needed for the Republican nomination last week, said early on that this election is a choice between President Barack Obama’s “entitlement society” in which people are dependent on government benefits, and his “opportunity society” where business is free to flourish.
But if you take Romney’s own life as representing a governing philosophy, he has the dichotomy backward. Romney is the one who has taken advantage of government entitlements — the ones that flow to the wealthy. And his interest in opportunity lies with rich investors who exploit government rules, often to the detriment of Main Street. Romney’s use of the federal bankruptcy courts to extinguish debts owed to suppliers, shops and service providers is a perfect example — more on that later.
For starters, let’s tick off some of Romney’s favorite government entitlements:
• Special tax rules allow him to pay federal income taxes of just 15 percent on his millions in “carried interest” profits, capital gains and dividends. The rest of us pay a rate of up to 35 percent on income from work.
• Bain Capital, the private equity firm Romney founded and ran from 1984 to 1999, only succeeded due to a major tax loophole. Bain was able to deduct the interest on the massive loans taken out to finance the purchase of its takeover targets — loans secured with the companies’ own assets. In 2008, Germany put limits on this kind of tax shenanigans, but don’t expect anything that enlightened to happen here.
• Romney’s firm also enjoyed government largess in the form of job creation tax breaks. Just the year before Dade Behring, a Bain company, closed its operations in Puerto Rico in early 1998, with nearly 300 workers losing their jobs, the company received federal tax break of $3 million for promoting jobs there and a $4.1 million tax exemption from Puerto Rico.
But there is no big government entitlement as magical or beloved by Romney and Bain than the get-out-of-debt-free card bestowed by federal bankruptcy court.
Dade Behring went bankrupt, leaving Main Street creditors empty-handed, but not before Romney’s firm took $242 million out of it. In fact, of Bain’s 10 top business investments that made up 70 percent of the $2.5 billion Bain made for investors, four eventually went bankrupt, according to the Wall Street Journal.
That’s called winning for losing, a game perfected by top 1 percenters.
For a closer look at one destructive bankruptcy, read “Romney Economics: Cheat Main Street,” a column by Leo Gerard in the Huffington Post (http://tinyurl.com/dylorbl).
Gerard documents the way Bain left Main Street businesses licking their financial wounds as it legally absconded with millions in management fees, dividends and other distributions. His featured example is American Pad and Paper Co. (Ampad) that Bain bought from Mead Corp. in 1992. Bain remained the company’s largest single shareholder through 1999, and three Bain executives sat on its board. In 2000, the company filed for bankruptcy, leaving debts to suppliers of more than $180 million. Even so, Bain came out smelling like money. It had invested $5 million and took out more than $100 million.
Eleven years after Ampad filed for bankruptcy, as Gerard points out, the company’s nearly 1,300 unsecured creditors finally got a pittance of what was owed: Green Bay Packaging Inc. was owed $75,500 and received $137; Lakeway Container Inc. was owed $47,100 and received $89; American Coffee Break Service was owed $1,300 and was paid $2.56. The bankruptcy trustee’s final report lists page after page of Main Street businesses receiving less than a penny on the dollar. Had that $100 million flowed to Ampad’s suppliers rather than Romney and Bain investors, it would have covered more than half the debts.
Romney desperately wants to convince the public that Bain operated in the best interests of Main Street and that he didn’t get fabulously rich under government-rigged rules. But the man exemplifies the special tax breaks and legal shields from creditors that the wealthy see as their right.
That’s Romney’s “entitlement society.”
By: Robyn E. Blumner, Columnist, Tampa Bay Times, June 3, 2012
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