“Privatization Of Medicare”: Jeb Bush Now Says He Wouldn’t ‘Phase Out’ Medicare. What He Would Do Is Just As Wrong
It had to happen sooner or later: a Republican presidential candidate says something suggesting he’d destroy Medicare, the Democrats jump all over him, and he backtracks, saying that’s not what he meant and in fact he only wants to strengthen it. This time it’s Jeb Bush, who said the other day that though we can keep Medicare around for the people who are currently on it, “we need to figure out a way to phase out this program for others and move to a new system that allows them to have something – because they’re not going to have anything.”
This is an old argument from Republicans, one they also use to justify attacks on Social Security: the program is doomed anyway, so we should go ahead and privatize it. The argument is completely wrong with regard to Social Security, and the truth about Medicare is that the program’s future is looking brighter and brighter — in no small part because of the Affordable Care Act. The argument Bush is making is ten years out of date.
Bush did try to walk back his statement a bit, saying the “phase out” part was taken out of context and he’s only talking about how we “reform our entitlement system.” Here’s his follow-up, which doesn’t change the essence of what he was arguing:
“It’s an actuarially unsound health care system,” said Bush, who said something must be done before the system burdens future generations with $50 billion of debt. “Social Security is an underfunded retirement system; people have put money into it, for sure.
“The people that are receiving these benefits, I don’t think that we should touch that; but your children and grandchildren are not going to get the benefit of this that they believe they’re going to get, or that you think they’re going to get, because the amount of money put in compared to the amount of money the system costs is wrong.”
Bush hasn’t yet released his plan to phase out/reform Medicare, but given these comments it seems likely he’ll embrace something like what Paul Ryan has been advocating for years. It involves changing Medicare from a guaranteed single-payer government insurance plan into a voucher plan, in which the government gives senior citizens a set amount of money with which they can go out and get private health insurance. It saves money by limiting the value of that voucher, so if it’s less than what coverage actually costs, well, tough luck. In that way, it eliminates the central promise of Medicare, which is that every American senior citizen will have health coverage.
We’ll await Jeb’s particulars, but I promise you that most of the GOP candidates will embrace some version of this plan, because that’s what the Republican consensus on Medicare is these days. And it’s always justified with the argument Jeb gives: because of skyrocketing costs the program is doomed, so privatization is the only way to make sure it’s there for your kids. But don’t worry, current seniors, we won’t touch your Medicare! Which is one of the ironies of their argument: the free market is supposed to make everything wonderful, but they fall all over themselves to promise senior citizens that they won’t disturb the big-government, socialist program that seniors love.
Now on to the cost question. As it happens, the Medicare Trustees just released their annual report on the future of the program. And as Kevin Drum noted, things are looking a lot sunnier than they were a few years ago:
Ten years ago, Medicare was a runaway freight train. Spending was projected to increase indefinitely, rising to 13 percent of GDP by 2080. This year, spending is projected to slow down around 2040, and reaches only 6 percent of GDP by 2090. Six percent! That’s half what we thought a mere decade ago. If that isn’t spectacular, I don’t know what is.
Those are projections for what’s going to happen decades from now, so things are doubtless going to change. But the presumption of the Republican argument is that Medicare is eventually going to eat the entire federal budget, and so we have no choice but to fundamentally alter it. And that’s just not true.
The other assumption they make is that the way to alter Medicare is simple: privatize it. But they’re wrong about this, too. Medicare is expensive, but that’s not because it’s an inefficient big-government program. In fact, Medicare is remarkably efficient, more so than private insurance. That’s because it benefits from economies of scale, and because it doesn’t have to spend money on things like marketing, underwriting, and big salaries for executives. The reason Medicare is expensive is that American health care is expensive, and it serves a lot of people. The retirement of the large Baby Boom generation is what’s producing its current funding challenges.
Let’s not forget that at the same time Republicans cry that Medicare is unaffordable and so must be dismantled, they fight any effort to actually lower costs in a rational way. For instance, they’re adamantly opposed to comparative effectiveness research, which involves looking at competing treatments and seeing which ones actually work better. That this isn’t something Medicare already takes into account sounds ridiculous, but it’s true. If there are two medications for a particular ailment that are equally effective, but one costs $100 a year and one costs $100,000 a year, wouldn’t it make sense for Medicare to 1) find that out, and 2) make coverage decisions accordingly? But Republicans have said no — Medicare should just pay for both, no matter what it costs.
Republicans also oppose the most significant effort to reduce Medicare costs in decades, something called the Affordable Care Act, which included all kinds of provisions meant to achieve this goal. Perhaps most critically, the law starts a move away from the fee-for-service model, in which doctors and hospitals make more money the more procedures they do, to a model where they get paid a single rate for treating a patient. Under the fee-for-service model, if your hospital screws up, you get an infection, and you have to get re-admitted, they make more money; the ACA actually punishes them for that, giving them a greater incentive to provide better and less expensive care.
But Republicans not only want to repeal the ACA, which means repealing all those kinds of payment provisions, they have nothing much to say about how, specifically, we might save money in Medicare. Their only answer is that if we privatize it, the magic of the market will produce savings. Of course, if that were true America would have the cheapest health care system in the advanced world, since ours is already more private than in any other similar country. And yet we don’t — ours is far and away the most expensive, and that’s precisely because the market has failed.
So to sum up, this is the Republican argument on Medicare: We absolutely can’t do anything in particular that would bring down the cost of Medicare, but the cost of Medicare is so outrageous that we have no choice but to privatize it.
When Jeb Bush and the other candidates talk about this subject, pay close attention to what they say. They’ll use the word “strengthen” a lot — we want to strengthen Medicare! They’ll tell seniors, who vote in great numbers, that they aren’t going to touch their precious Medicare. And they’ll ignore what we’ve learned in the last few years, talking as though things look just as bad as they did before the Affordable Care Act was passed and health care spending slowed. But the truth is that their solution is no solution at all.
By: Paul Waldman, Senior Writer, The American Prospect; Contributor, The Plum Line Blog, The Washington Post, July 24, 2015
“Creating Straw Politicians”: Scott Walker And The GOP Are Wrong About The Safety Net
It’s back and Democrats are going to have to deal with it. I’m talking about the political argument that they want to lure as many people as possible into government dependency.
This is a staple of Wisconsin Gov. Scott Walker’s incipient presidential campaign, and he frames it as simple common sense. “Oftentimes when I think about the president and people like Hillary Clinton, I hear people who I think measure success in government by how many people are dependent on the government. By how many people are on food stamps and Medicaid and unemployment,” he said this week at the Florida Economic Growth Summit in Orlando. “I don’t know about all of you, but my belief in America is that we should measure success by just the opposite.”
Walker added: “I don’t remember any of my classmates saying to me ‘Hey, Scott, someday when I grow up, I want to become dependent on the government.’ Nobody signed my yearbook ‘Dear Scott, Good luck becoming dependent on the government.’”
Very funny, and a lot more appealing than Mitt Romney’s assertion that 47 percent of the electorate is dependent on government and will never take responsibility for themselves. The problem with Walker’s formulation, however, is that he’s creating straw politicians. President Obama and Clinton and practically everyone in their party — in fact both parties — talk incessantly about education, job creation, income inequality, and how to increase wages. That doesn’t sound like a yearning for Handout Nation. It sounds like people obsessing over how to make America a country of tubs standing on their own bottoms.
I’m not saying that Democrats haven’t given Republicans ammunition. The 2012 Obama campaign’s “Life of Julia” cartoon slideshow was a parody waiting to happen. From Julia’s enrollment in Head Start as a preschooler to her retirement aided by Medicare and Social Security, the sequence gave off a distinctly Soviet, cradle-to-grave vibe.
As pediatric neurosurgeon-turned GOP candidate Ben Carson put it in his announcement, “We’re not doing people a favor when we pat them on the head and say ‘there there, you poor little thing, we’re going to take care of all your needs. You don’t have to worry about anything.’ You know who else said stuff like that? Socialists.” That was less than a week after a real socialist — Vermont Sen. Bernie Sanders — announced he was running for the Democratic nomination.
Obama came into office amid the worst recession since the Great Depression. The rolls of the three programs Walker named swelled as people lost jobs, income and health insurance. Job losses climbed to a terrifying 818,000 in January 2009, the month Obama was inaugurated. Another 2.2 million jobs were gone by the end of April. The unemployment rate was at or near 10 percent for eight months. So yes, there were a lot of people relying on government programs, for good reason. The private sector had completely failed them.
Obama’s chief economic message for years has been about sustained job creation and an unemployment rate nearly down to half its recession peak, not high enrollment in safety-net programs. Democrats do try to educate people about benefits for which they may qualify. But the goal is to get them on their feet, not lock them into dependency.
There is one area of government “dependency” that Obama and his party are proud of, and that is health insurance. The Department of Health and Human Services said this week that 10.2 million people bought private health coverage this year under the Affordable Care Act, and 85 percent of them receive federal subsidies to help pay for it. Millions more have been able to enroll in Medicaid as a result of the ACA expansion of the program to people with incomes slightly above the official poverty line. For those who believe health coverage should be universal, the numbers justify a victory lap.
People who receive insurance help, or food stamps or unemployment benefits, do indeed depend on the government — just like farmers, homeowners, corporations, and anyone else who receives subsidies or tax breaks, as well as companies that don’t provide health insurance or living wages. And just to be clear, if they are not children, disabled, or elderly, people who use the safety net often have jobs. Nearly 43 percent of all food-stamp recipients live in a household with earnings, according to the Department of Agriculture. The Kaiser Family Foundation, in a study of states that haven’t adopted the Medicaid expansion, found there are workers with full- or part-time jobs in 66 percent of the families eligible for it.
Jeb Bush has called the safety net “a spider web that traps people in perpetual dependence.” We are going to hear a lot of statements like that in the next 18 months. But that doesn’t make them true.
By: Jill Lawrence, The National Memo, June 4, 2015
“Mike Huckabee Is Prepared To Blow Up Republicans’ Big Ruse”: Pulling Back The Curtain On The Party’s Double Dealing
By the time the sixth or seventh candidate enters a Republican presidential primary, it’s usually tough to identify a unique quality that distinguishes him from those who came before. Most of the predictable niches—the Establishment candidate, the Religious Right candidate, the Conservative Absolutist candidate, the non-white/non-male outreach/token candidates, the outsider candidate, etc.—have already been filled.
With that pattern in mind, you might imagine Mike Huckabee missed his moment. At the time of his announcement last week, the GOP race already included a Religious Right tribune (Ted Cruz), an Evangelical Christian (Scott Walker), a fair-weather libertarian (Rand Paul), an outreacher (Marco Rubio), an outsider (Ben Carson), and a woman (Carly Fiorina). And in a purely electoral sense, Huckabee did miss his moment.
Huckabee, a Southern Baptist minister, had a better opportunity to consolidate the religious conservative vote against the donor candidate in 2008 than he does now, and even then he came up short. Eight years ago, as Nate Cohn wrote recently at the New York Times, “religious conservatives had serious reservations about the two main candidates, John McCain and Mitt Romney.” This year things are different.
But this isn’t just a simple story about a hopeless underdog deluding himself about his odds, or a retread of so many GOP primaries where too many conservatives vie for the right wing vote and clear a path for the money guy.
Huckabee appears to be aware of his liabilities, and is thus angling not only for the evangelical vote, but for the old person vote in general. He’s adopted the view, unfathomable in modern Republican politics, that support programs for the elderly shouldn’t be tampered with, and not just for today’s seniors, but for at least a generation. By doing so he’s violated the GOP’s implicit pact that discourages members from accentuating the tensions between the party’s fiscal priorities and its aging political base. If he makes good on this cynical strategy, he will probably still lose, but his candidacy will have served a valuable and revealing purpose.
Let’s be clear up front that Huckabee’s positioning here is 100 percent cynical. As John McCormack of the neoconservative Weekly Standard reminded us last month, Huckabee was a proponent of the Republican consensus as recently as August 2012, when he wrote on his Facebook page that “Paul Ryan is being demonized for his suggested Medicare reforms. But the alternatives may be scarier.”
Today, Huckabee says he wouldn’t sign legislation codifying Ryan’s Medicare reforms if he were president, and lambasted New Jersey Governor Chris Christie’s proposal to further raise the Social Security retirement age over time. In Iowa this week, Huckabee told a crowd of supporters, “It is a foolish thing for the government to involuntarily confiscate money from your pockets and paychecks for 50 years, and then suddenly tell you, oh, we were just kidding.”
What he didn’t mention is that his proposed “Fair Tax”—a hefty tax on consumption—would disproportionately increase costs for fixed-income seniors, who spend most of their money, and thus operate in effect much like a Social Security benefit cut.
But for political purposes, it doesn’t really matter that Huckabee isn’t acting out of compassion for the elderly or the poor. What matters is that he’s motivated enough to pull back the curtain on the party’s double dealing.
For the entirety of Barack Obama’s presidency, Republicans have taken an awkward, cynical, schizophrenic view of entitlements. They have voted with near unanimity for a budget that would radically overhaul Medicare, but have promised (unworkably) to isolate the old and nearly old from any disruptions. They have largely sidelined their preferred Social Security reforms, but salivated over the prospect of voting for a cut to Social Security benefits when they thought Obama might sign it. They have railed against the Affordable Care Act for reducing spending on Medicare while voting for budgets that preserve those very cuts.
The only way to make sense of this mishmash is to remember that the GOP owes its political livelihood to the elderly. To pursue conservative goals, without obliterating their coalition, Republicans must twist themselves into pretzels. They must detest spending, but only on those other people. Their rhetorical commitments are impossible to square with their ideological and substantive ones, though, and the agenda they’ve promised to pursue when they control the government again would not exempt retirees and near retirees in any meaningful way. At the end of the day they can only keep their promises to one interest group, and it’s not going to be the elderly.
In effect, Huckabee is promising to lay this all out for Republican primary (i.e. older) voters, and place his rivals in the exquisitely awkward position of having to explain themselves. Normally the way things work in Republican primaries is that candidates seek advantage by drawing attention to their opponents’ insufficient commitment to conservatism. Huckabee’s big bet is that—in this one substantive realm, where conservatism and voter self-interest point in opposite directions—he can do the same by running to the left. Watching him test this theory, even in defeat, will be fascinating.
By: Brian Beutler, The New Republic, May 11, 2015
“Entitlements For Me And Mine”: The GOP Wants To Cut The Social Safety Net — But Only For Young And Poor People
Newly minted 2016 presidential candidate Mike Huckabee is selling himself to older Republicans as the guy who will keep Washington’s grasping hands off their government-provided Medicare and Social Security. In his recent announcement speech, the former Fox News host and ex-governor of Arkansas attacked rivals who “propose that to save the safety nets like Medicare and Social Security, we ought to chop off the payments for the people who have faithfully had their paychecks and pockets picked by the politicians.” For that and similar statements, Huckabee’s candidacy is being portrayed as some radical departure from GOP economic orthodoxy and, as The New York Times put it, is supposedly “exposing growing fault lines in the party over an issue that has long been considered a political third rail.”
Not so much, actually. Huckabee’s do-(almost)-nothing stance on entitlement reform reflects the GOP consensus. He’s just more explicit about it than most. It’s really only potential 2016er Chris Christie — with his call for cutting retirement pay for wealthier seniors — who seems to be the odd man out.
There was a time, of course, when Republicans were pushing hard to fix the fiscal problems of Medicare and Social Security. Rep. Paul Ryan’s 2010 “Roadmap for America’s Future” probably marked Peak Reform. That budget blueprint called for allowing pre-retirement workers to divert part of their payroll taxes into private retirement accounts and to receive vouchers to buy private health insurance when they finally called it quits. Such sweeping changes were needed, Ryan and other Republicans argued, to prevent these programs from “bankrupting” America.
But by the 2012 presidential election, Republicans were backtracking from those big ideas. In his convention speech, GOP presidential nominee Mitt Romney attacked President Obama for wanting to cut future Medicare spending. Vice presidential nominee Paul Ryan explained how important Medicare was for his grandmother with Alzheimer’s. Social Security wasn’t mentioned by name at all. Likewise, the Ryan budgets stopped calling for specific Social Security reforms.
Things went even further in the 2014 midterms, when GOP groups ran ads against some Democratic candidates accusing them of wanting to cut Social Security benefits and raise the retirement age. And today, the new Republican House-Senate budget drops the “premium support” Medicare reform that had been a staple of the Ryan budgets, although it does include some $400 billion in unspecified, 10-year Medicare savings also requested by Obama.
So what happened? The long-term federal financial picture hasn’t miraculously turned around since 2010. The Congressional Budget Office projects that federal spending on Medicare and Social Security over the next 25 years will rise by roughly three percentage points of GDP, from 8 percent to 11 percent. The debt deluge that prompted calls for radical reform is still on its way. What has changed is that Republicans are wising up to just how much they depend on older voters. Those 65 and over gave 56 percent of their votes to Romney in 2012 and were critical to congressional victories in 2010 and 2012.
Another big change since 2010: ObamaCare. The passage of the the president’s Affordable Care Act — opposed by older, tea party Republicans — has affected how GOP politicians view and talk about the safety net. They now clearly differentiate between “earned” entitlement benefits such as Medicare and Social Security and “unearned” welfare benefits such as ObamaCare subsidies, Medicaid, and food stamps. As Wall Street Journal columnist Holman Jenkins accurately predicted back in 2013, “The new ‘conservative’ position will be to defend Social Security and Medicare, those middle-class rewards for a life of hard work and tax-paying, against Mr. Obama’s vast expansion of the means-tested welfare state for working-age Americans.” Republican voters get the “good” entitlements, Democratic voters the “bad,” dependency-creating ones.
Huckabee clearly intends seniors to be the rock upon which he builds his candidacy. In the “Seniors” section of his campaign website, he promises to fight for the “earned benefits” of Social Security and Medicare — perhaps forgetting that a typical middle-class, one-earner couple retiring in 2030 will receive $1.3 million in lifetime Medicare and Social Security benefits, having paid in just under $500,000. Huckabee then attacks ObamaCare as a welfare program that diverts $700 billion from Medicare and fosters “government dependency.” Entitlements for me and mine but not for thee and thine.
The politics of this strategy are debatable. (Though it surely doesn’t help attract younger voters!) But regardless, it makes for simply awful public policy. Future safety net spending increases on older Americans need to be reduced. Republicans should continue the earlier work of Ryan in building the case for those changes. Moreover, more of what is spent will need to shift to lower-income Americans. At the same time, some kinds of safety net spending for the poor will need to be increased, such as the Earned Income Tax Credit. And turning Medicaid into a program that uses tax credits to buy private insurance, as some on the right want to do, would also likely cost more money.
If today’s GOP-leaning seniors want their grandkids to grow up in an America that can better take care of the truly needy — young and old — and pay its bills, they’ll reject Huckabee’s selfish populism.
By: James Pethokoulis, The Week, May 8, 2015
“Zombies Of 2016”: As Far As Issues Go, 2016 Is Already Set Up To Be The Election Of The Living Dead
Last week, a zombie went to New Hampshire and staked its claim to the Republican presidential nomination. Well, O.K., it was actually Gov. Chris Christie of New Jersey. But it’s pretty much the same thing.
You see, Mr. Christie gave a speech in which he tried to position himself as a tough-minded fiscal realist. In fact, however, his supposedly tough-minded policy idea was a classic zombie — an idea that should have died long ago in the face of evidence that undermines its basic premise, but somehow just keeps shambling along.
But let us not be too harsh on Mr. Christie. A deep attachment to long-refuted ideas seems to be required of all prominent Republicans. Whoever finally gets the nomination for 2016 will have multiple zombies as his running mates.
Start with Mr. Christie, who thought he was being smart and brave by proposing that we raise the age of eligibility for both Social Security and Medicare to 69. Doesn’t this make sense now that Americans are living longer?
No, it doesn’t. This whole line of argument should have died in 2007, when the Social Security Administration issued a report showing that almost all the rise in life expectancy has taken place among the affluent. The bottom half of workers, who are precisely the Americans who rely on Social Security most, have seen their life expectancy at age 65 rise only a bit more than a year since the 1970s. Furthermore, while lawyers and politicians may consider working into their late 60s no hardship, things look somewhat different to ordinary workers, many of whom still have to perform manual labor.
And while raising the retirement age would impose a great deal of hardship, it would save remarkably little money. In fact, a 2013 report from the Congressional Budget Office found that raising the Medicare age would save almost no money at all.
But Mr. Christie — like Jeb Bush, who quickly echoed his proposal — evidently knows none of this. The zombie ideas have eaten his brain.
And there are plenty of other zombies out there. Consider, for example, the zombification of the debate over health reform.
Before the Affordable Care Act went fully into effect, conservatives made a series of dire predictions about what would happen when it did. It would actually reduce the number of Americans with health insurance; it would lead to “rate shock,” as premiums soared; it would cost the government far more than projected, and blow up the deficit; it would be a huge job-destroyer.
In reality, the act has produced a dramatic drop in the number of uninsured adults; premiums have grown much more slowly than in the years before reform; the law’s cost is coming in well below projections; and 2014, the first year of full implementation, also had the best job growth since 1999.
So how has this changed the discourse? On the right, not at all. As far as I can tell, every prominent Republican talks about Obamacare as if all the predicted disasters have, in fact, come to pass.
Finally, one of the interesting political developments of this election cycle has been the triumphant return of voodoo economics, the “supply-side” claim that tax cuts for the rich stimulate the economy so much that they pay for themselves.
In the real world, this doctrine has an unblemished record of failure. Despite confident right-wing predictions of doom, neither the Clinton tax increase of 1993 nor the Obama tax increase of 2013 killed the economy (far from it), while the “Bush boom” that followed the tax cuts of 2001 and 2003 was unimpressive even before it ended in financial crisis. Kansas, whose governor promised a “real live experiment” that would prove supply-side doctrine right, has failed even to match the growth of neighboring states.
In the world of Republican politics, however, voodoo’s grip has never been stronger. Would-be presidential candidates must audition in front of prominent supply-siders to prove their fealty to failed doctrine. Tax proposals like Marco Rubio’s would create a giant hole in the budget, then claim that this hole would be filled by a miraculous economic upsurge. Supply-side economics, it’s now clear, is the ultimate zombie: no amount of evidence or logic can kill it.
So why has the Republican Party experienced a zombie apocalypse? One reason, surely, is the fact that most Republican politicians represent states or districts that will never, ever vote for a Democrat, so the only thing they fear is a challenge from the far right. Another is the need to tell Big Money what it wants to hear: a candidate saying anything realistic about Obamacare or tax cuts won’t survive the Sheldon Adelson/Koch brothers primary.
Whatever the reasons, the result is clear. Pundits will try to pretend that we’re having a serious policy debate, but, as far as issues go, 2016 is already set up to be the election of the living dead.
By: Paul Krugman, Op-Ed Columnist, The New York Times, April 24, 2015
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