How Long?

Well, your friends with their fancy persuasions
Don’t admit that it’s part of a scheme,
But I can’t help but have my suspicions
‘Cause I ain’t quite as dumb as I seem.

And you said you were never intendin’
To break up our scene in this way,
But there ain’t any use in pretendin’, 
It could happen to us any day.

—Ace, “How Long

s we now watch dueling presidential campaign whiteboards, which must make Glenn Beck very proud, I want to call your attention to something E. J. Dionne rhetorically asked Ryan-Romney this morning on MSNBC about their “bold” Medicare “improvement” plan:

If this is so good, if it’s such a good idea, why don’t you propose it for today’s senior citizens?

Well, of course the answer to that is because if they did propose it to today’s senior citizens, the geezers would, as fast as their geezerly legs could take them, run toward Obama and down-ballot Democrats in November and deliver the present incarnation of the Republican Party the coup de grâce it most certainly deserves.

So, what Republicans are doing is telling today’s seniors they don’t have to worry about Paul Ryan’s heroic plan to “save” Medicare, since the heroes have come not to save them but to save future geezers.

Current old folks, say the Republicans, can continue to count on authentic Medicare and need not fret over whether Ryan and Romney are offering a counterfeit version. In other words, the GOP, which has totally committed to the voucherized Medicare proposal, is counting on the selfishness of seniors to get them through this election.

Of course, Republicans hope that today’s senior citizens don’t stop to consider what would happen to them and their for-now untouched benefits, if some day millions of young people working and paying Medicare taxes grow tired of paying for current geezers’ full bennies, particularly when those young folks realize that the Ryan-Romney scheme will leave them with an old-age health care plan that will cost them more and provide them less.

How long will young people pay to keep octogenarians and nonagenarians on real Medicare after they figure out that Ryan and Romney have sold them a fake?

That is a question I would ask if I were a silver-haired geezer.

Advertisements

A Fiscal Fantasy

This morning on MSNBC Ezra Klein made a great point about how most of the talk surrounding Ryan’s budget plan has been limited to the Medicare issue. But there is a lot more to it than that:

What people don’t realize about it is the cuts to other health care programs, primarily Medicaid, are almost twice  as large as Medicare…

Medicaid, of course, is a means-tested health program for low-income folks, including children, the elderly, and the disabled.  More than half of the funding for each state is provided by the feds.

According to the Kaiser Commission on Medicaid and the Uninsured, those Ryan—now Romney-Ryan—cuts Klein referenced, along with repeal of the Affordable Care Act which Romney and Ryan promise to accomplish, will in, say, Missouri mean that somewhere between 46% and 53% of folks who would otherwise be enrolled in Medicaid under current law in 2021 would not be so enrolled.

That represents between 650,000 and 750,000 Missourians whose well-being, unless the state came up with more revenue itself (!), would be sacrificed in the name of budget austerity that has as its guiding principle the idea that rich folks need more tax cuts.

But that’s not all. Klein also makes the point that the Ryan plan is designed to shrink other parts of government spending as a share of the economy, to uncivilized levels by 2050. He  presented this graph:

Klein wrote something remarkable that should be shouted from the housetops (emphasis mine):

The truth is that the Ryan budget’s largest long-term savings don’t come from Medicaid or Medicare or Social Security, or even Medicaid and Medicare and Social Security put together. They come from everything else. Ryan says that under his budget, everything the federal government does that is not Medicare, Medicaid or Social Security will be cut to less than 3.75 percent of GDP by 2050. That means defense, infrastructure, education, food safety, energy research, national parks, civil service, the FBI — all of it. Right now, that category of spending is 12.5 percent of GDP.

Think about that. A government that small could not possibly “establish Justice, insure domestic Tranquility, provide for the common defense, promote the general Welfare, and secure the Blessings of Liberty to ourselves and our Posterity” in 2050. But it’s all nonsense, as real-time, Nobel Prize-totin’ economist Paul Krugman pointed out:

Look, Ryan hasn’t “crunched the numbers”; he has just scribbled some stuff down, without checking at all to see if it makes sense. He asserts that he can cut taxes without net loss of revenue by closing unspecified loopholes; he asserts that he can cut discretionary spending to levels not seen since Calvin Coolidge, without saying how; he asserts that he can convert Medicare to a voucher system, with much lower spending than now projected, without even a hint of how this is supposed to work. This is just a fantasy, not a serious policy proposal.

Well, what is serious is the philosophy behind the proposal, which philosophy is based on a fantasy, a fantasy that what is wrong with our fiscal house can be fixed by throwing the poor, the elderly, and the sick in the streets to fend for themselves and by shrinking government to a size that could truly be drowned in Grover Norquist’s bathtub.

McCaskill: “I’m Not Willing To Blow Up Medicare”

Saint Rachel Maddow had a dustup on Meet the Press  with right-winger and editor of National Review Rich Lowry. Following the lead of his lying leader, Lowry was pushing a two-year-old lie (which Democrats failed to adequately address in 2010) that Obama’s health care reform law slashed billions out of Medicare:

RICH LOWRY: …Republicans should go on offense on Medicare, because the president, as part of Obamacare, passed $700 billion in cuts in Medicare.  And Romney wants to repeal Obamacare, including those cuts…So at the top of a ticket Romney versus Obama, there’s only one of those guys who wants any cuts affecting current seniors…That’s not Mitt Romney.

Of course that is blatantly false. There were exactly zero cuts in Medicare benefits to “current seniors” or, indeed, to future seniors. The “cuts” were actually reductions in the future payments the program makes to participating hospitals (and other providers but not including doctors) and reductions in Bush-era overpayments to private insurance companies participating in Medicare Advantage.

But don’t take my word for it. Here’s Gail Wilensky, former administrator—under W. Bush—of the Centers for Medicaid and Medicare:

There are no reductions in the Medicare benefits promised in law.

Obviously, that fact hasn’t stopped Romney, Ryan, and other Republicans, including the national Chamber of Commerce, from lying about the issue—going on offense, as Lowry described it—which is made worse by the fact that, as Maddow tried to point out on Sunday, Paul Ryan’s budget contains the same “cuts” to Medicare!

At the end, Maddow asked Lowry a question:

What I want to know is the logic of attacking somebody for something that you yourself are proposing to do?

Logic? Ah, the logic in lying about imaginary Medicare cuts is in the fact that Republicans have so much money this year they can lie, and lie continuously, with impunity. Like here in Missouri, where, as Bloomberg points out, the Rovian smear group, Crossroads GPS, is doing damage to Claire McCaskill:

…an ad sponsored by Crossroads that’s run 858 times says Democratic Senator Claire McCaskill voted for Medicare cuts that could slash benefits for the program’s enrollees.

That ad ran 858 times as of June 28! It has undoubtedly run a gazillion times since, as McCaskill has become, in the words of Andy Kroll at Mother Jones, “Dark Money’s Top Target.”

Well, McCaskill is at least fighting back with charges of her own. This morning on Fox and Friends, the show with the ambitious mission of extirpating IQs everywhere,  she was treated rather rudely by host Steve Doocy, but before he went on an inelegant Romney-Ryan offensive, she managed to get in a shot at Paul Ryan:

I think he’s willing to blow up Medicare to give more tax cuts to folks at the very top…I have worked in a bipartisan way to bring down federal spending, but I’m not willing to blow up Medicare in the process—especially when you consider that Paul Ryan believes that at the same time we blow up Medicare, we need to give another tax cut to people who make more than a million a year.

“Blow up Medicare.” I like that phrase because it perfectly describes what conservatives have wanted to do to the program since it was created. Blow it up, obliterate it, or, as they phrase it these days, “save” it.

Call It “ClaireCare” If You Want, McCaskill Should Say

I will take Claire McCaskill at her word that she is not skipping the Democratic National Convention because she is afraid to cavort with Mr. Obamacare himself and other Democrats who don’t enjoy overwhelming popularity here in Missouri.

She told Morning Joe:

I’ve never gone when I’ve had a contested race. You’ve got to say to people at home, which is more important: Going to a place with a bunch of party honchos and having cocktail parties, or being at home talking to them? So this has never been a hard call for me. Everybody is trying to make this a big deal and narrative. It’s just stupid.

All of the chatter about McCaskill’s reasons for not going to North Carolina later this summer, along with the  expectation that the Supremes will rule on the Affordable Care Act tomorrow, has me wondering just why it is that here in Missouri, as elsewhere, the concept of “ObamaCare” is relatively unpopular, even while its constituent parts are not. My conclusion is that such dissonance is attributable to a failure to properly—and constantly—educate an inattentive public.

Which, of course, made me wonder, for instance, what Ms. McCaskill has said about the ACA and how she has tried to educate Missourians on the virtues of the law.

Well, she did make an effort to do so in March, sort of. Here is how TPM began a story about it:

Grilled about her support for the Affordable Care Act, Sen. Claire McCaskill (D-MO) told a home state radio interviewer that the law’s core structure is “exactly” like the House GOP Medicare privatization plan that conservatives support and liberals detest.

Hmm. That’s not exactly a good way of selling ObamaCare to liberals, now is it? She went on:

“The irony of this situation is that these are private insurance companies people will shop to buy their insurance. It’s not the government,” she told KMOX of St. Louis on Wednesday. “It’s exactly what Paul Ryan wants to do for Medicare.”

“It’s subsidized by the government — premium subsidies — which is exactly, this is the irony,” continued McCaskill, who faces a tough reelection battle this fall. “You think what Paul Ryan wants to do for seniors, you think it’s terrific. But when we want to provide private health insurance for people who don’t have insurance with subsidies from the government, you think it’s terrible.”

Her point here is, of course, unassailable. There is a lot of Republican hypocrisy associated with the debate over health care reform, particularly since almost the entire scheme that is now called ObamaCare is made up of ideas that once were dreamed up in the minds of right-wingers.

But that doesn’t let Claire off the hook, in terms of her responsibility to educate folks about the law. I looked on her campaign website and I found the following under “Healthcare“:

Claire has fought for expanded health insurance for all Missourians, from children to seniors. In her first term, Claire helped protect children with pre-existing conditions from being refused insurance and saved seniors from paying too much for prescription drugs by helping to close the Medicare Part D “donut hole.” Claire strongly believes that affordable health care is necessary in a successful economy and will continue to fight to make sure all Missourians have access to it, while also fighting to ensure those who chose not to be insured don’t pass along their medical costs to other Missourians.

This paragraph constitutes a summary of the details that follow on the page, but what we see here is essentially an explanation of the Affordable Care Act, of ObamaCare, but without the name attached. Now, while it is understandable that she would want to stay away from terms that Republicans and their moneyed funders have tainted via their propaganda campaign against “ObamaCare” and the ACA, what McCaskill is doing is essentially furthering the public’s misunderstanding of what is the health care reform law that goes by those names.

I can’t help but wonder what public opinion about the ACA might be today, if folks like McCaskill would not only consistently tout the parts of the law that people like, but aggressively defend the idea behind the one part they don’t like, the dreaded mandate.

Something like the following would be in order, coming from the moderate Missouri Democrat who voted for the ACA and who gets constantly attacked for doing so:

You’re damned right I voted for ObamaCare. And I’m proud of that vote. Hell, I wish they’d call it ClaireCare, so proud I am to have voted for it.

You know why?

Because it helps protect Missourians with pre-existing conditions from getting screwed by insurance companies;

Because it protects Missourians who get sick from getting booted off the insurance they had before they got sick;

Because it provides insurance for Missourians who can’t afford it and who would otherwise go without it and get sick and die or who would end up in an emergency room with a horrible and horribly expensive disease that we’d all end up paying for;

Because it allows about 40,000 Missouri kids to stay on their parents insurance until they are 26;

Because it has already “saved 111,815 Missouri seniors on Medicare an average of $627 per person on their prescription drugs by closing the Medicare Part D ‘donut hole‘” (quote from her website);

And because it has already “provided 431,945 Missouri women with free mammograms, bone density scans, and cervical cancer screenings with no co-pay” (quote from her website);

As I said, you’re damned right I voted for what you derisively try to call “ObamaCare,” and I couldn’t be prouder. Tell me, my critics, which one of the above “becauses” would you like to repeal? Huh?

And I’m even proud of the fact that I voted for the hated mandate because it was at least an attempt to get folks to stop gaming the system and help pay their own way. Aren’t you tired of some people trying to get something for nothing?

Any bleeping questions?

More Falsehoods About Social Security And Medicare

By now everyone has heard the news:

WASHINGTON – The Medicare and Social Security trust funds are both on “unsustainable paths” — as they have been for years — and will be exhausted by 2024 and 2033, respectively, a trustee report released Monday said.

And by now maybe you have heard the misinformation.

Joe Scarborough said this morning that Social Security will be “bankrupt” three years earlier than projected last year and it will just keep ratcheting up until it will be no time until it is gone. “It’s going down,” he said. In fact, here was the graphic on the screen as the panel discussed the issue:

Social Security benefits to be depleted by 2033.” What tommyrot that is. Benefits, far from being depleted, will continue long after 2033, even if nothing is done.

But first, let’s look at Medicare. As the USA Today story noted:

The trustees have predicted the depletion of the Medicare Trust Fund every year since they first began issuing reports in 1970, and they ultimately extend the deadlines out a few more years.

Yes, look at this from the Congressional Research Service:

As you can see, since such reports have been created, the projections of insolvency have been fairly imminent. Consider this from Sarah Kliff at Wonkblog:

…the trust fund doesn’t really decide Medicare’s fate. Instead, it’s an accounting term. When we talk about the Medicare Trust Fund, we’re pretty much referring to where our payroll taxes to finance the insurance program get stored. If the Trust Fund runs out, that means it can no longer cover everything it’s supposed to pay for. But Congress could — and, many think, would — make up the difference by borrowing, cutting spending elsewhere and using the savings to plug the hole, or finding new sources of revenue.

“The fund is a fiscally neutral element in the goods and services of Medicare finances,” Theodore Marmor, Spencer Martin and Jonathan Oberlander wrote in one article on the topic. “Congress can change the taxes that finance Medicare if it has the will. Likewise, it can change the benefits and reimbursements of the program.”

So, you can easily see that Medicare won’t be “bankrupt” in 2024, even though there is a definite problem with its financing that has to be soon addressed (apart from just shifting the cost on to future seniors, as the Romney-Ryan budget plan does*).

Likewise, Social Security is not now bankrupt and won’t be in 2033. Why? It is simple, as John Harvey at Forbes pointed out:

It is a logical impossibility for Social Security to go bankrupt.

Here’s how the Social Security Administration explains it:

The current Social Security system works like this: when you work, you pay taxes into Social Security. The tax money is used to pay benefits to:

  • People who already have retired;
  • People who are disabled;
  • Survivors of workers who have died; and
  • Dependents of beneficiaries.

The money you pay in taxes is not held in a personal account for you to use when you get benefits. Your taxes are being used right now to pay people who now are getting benefits. Any unused money goes to the Social Security trust funds, not a personal account with your name on it.

Because wage growth has been slow, and because the economy hasn’t exactly been great, money going into the trust funds has slowed down, but Social Security is not—not—paying out more in benefits than it is bringing in. Payroll taxes, along with interest from the special issue Treasury bonds the program holds, plus taxes on Social Security benefits paid by high-income taxpayers, all add up to an increase in the Social Security surplus.

Get that? The program’s surplus is still growing.

But even though Joe Scarborough got it wrong about Social Security and bankruptcy, he did get something right. He said the program’s future finances could be fixed in about twenty minutes.

One way of doing that—without cutting benefits—would be to eliminate the Social Security tax cap, which is currently set at $110,100. Eliminating the cap would mean that those who make more than that (about 6% of wage-earners) would then have to pay Social Security taxes on all their wages. Just this simple move would guarantee payment of full benefits for at least 75 years.

So, although we will hear a lot of Republicans talking about the demise of the two most important social stabilizers we have, using trust fund projections as tools to severely weaken, if not destroy, our safety net, the truth is that the future of both programs can be fixed without dramatically altering their nature, if there is the political will to do so.

And it is up to voters to impregnate the Republican Party with that will.

_________________________________

* Sadly, Willie Geist, a fixture on “liberal” MSNBC from 4:30am until 8:00am, defended the GOP budget plan and Paul Ryan, saying,

He doesn’t do this because he likes throwing old people out on the street; he’s trying to make it solvent. He’s trying to save it in the long term…he’s trying to do something big…

Willie, of course, will never have to worry about surviving his old age on reduced Social Security benefits or worry about how he is supposed to come up with the thousands upon thousands of dollars to get health care when he is too old for television.

Throw Medicare From The Train—Part Deux

Here’s the basic outline of House Budget Committee Chairman Paul Ryan’s 2013 budget in one sentence: Ryan’s budget funds trillions of dollars in tax cuts, defense spending and deficit reduction by cutting deeply into health-care programs and income supports for the poor.”

Ezra Klein

The Associated Press story in today’s Joplin Globe (the paper’s version was shortened for publication) summed up the Ryan budget plan nicely:

Mixing deep cuts to safety-net programs for the poor with politically risky cost curbs for Medicare, Republicans controlling the House unveiled an election-year budget blueprint Tuesday that paints clear campaign differences with President Barack Obama.

The AP also reported Mitt Romney’s rather enthusiastic support for the plan:

The House Republican budget rejects the out-of-control spending and higher taxes proposed by President Obama in his budget last month. By proposing prescriptions that will strengthen Medicare for generations to come, it also highlights President Obama’s failed leadership on entitlement reform.

So, now that we know where Romney stands (a rare achievement), let’s look at some of the Ryan plan in broad strokes, as presented by the AP: (follow the link for the details):

The Republican proposal…would wrestle the federal spending deficit to a manageable size in short order, but only by cutting Medicaid, food stamps, Pell Grants and a host of other programs…

The plan calls for steep drops in personal and corporate tax rates in exchange for clearing away hundreds of tax deductions and preferences. It would eliminate oft-criticized corporate tax boondoggles but also tax deductions and credits claimed by the poor and middle class.

To cope with the unsustainable growth of Medicare and the influx of retiring baby boomers, the GOP budget reprises a controversial approach that would switch the program — for those under 55 today — from a traditional “fee for service” framework in which the government pays doctor and hospital bills to a voucherlike “premium support” approach in which the government subsidizes purchases of health insurance.

If that all sounds familiar, that’s because we saw this movie last year. The difference is that this year’s sequel is even gorier (aren’t they always?) than last year’s spine-chilling offering.  And it was meant to be that way, according to Paul Ryan:

We are sharpening the contrast between the path we are proposing and the path of debt and decline that the president has placed us upon.

Sharpening, indeed.

Perhaps most appalling—considering all the cuts in the rest of the budget and the change in Medicare—is this:

The GOP measure also would replace $55 billion in Pentagon spending cuts and $43 billion in cuts to non-defense appropriations set to take effect in January with at least $261 billion in other savings over the coming decade, including curbs to food stamps, federal employee pensions and further cuts to federal health care programs.

As The Hill reported, not only does Ryan’s plan “shield the Pentagon from nearly $500 billion in automatic cuts and roll back some of the $487 billion reduction” already approved, the plan,

also increases national defense spending to $554 billion in 2013, an increase of $8 billion over the $546 billion that was agreed to under the Budget Control Act.

Get that? The GOP budget actually increases defense spending over what was agreed to last year!

All of the above is from neutral journalists. If you want to read progressive takes on the Ryan plan, go to the Washington Post and read Ezra Klein or to the Center for American Progress, which has a series of articles presenting the details of the plan. It ain’t pretty. And there is, as always, the Center on Budget and Policy Priorities here and here.

____________________________________

As for a short, non-partisan analysis of the “premium support” plan for “saving” Medicare, go to Kaiser Health News. Here is part of that analysis:

All plans, including traditional Medicare, would submit bids for how much they would charge to cover a beneficiary’s health care costs. The government would pay the full premium for the private plan with the second lowest bid, or for traditional Medicare, whichever is lower. Beneficiaries would have to pay the difference if they chose a plan that set rates higher. There could be one less expensive plan option, and beneficiaries who chose it would get a rebate for the difference…

But some critics are already arguing that the government-administered option would not be affordable and that it could cause doctors to leave the program. Critics have argued that the government-run plan would attract the sickest people, driving up its costs, while private plans would lure the healthiest.

This plan is the so-called Wyden-Ryan “compromise.” If you have wondered why a Democrat with liberal bona fides—Oregon Senator Ron Wyden—would team up with a right-winger like Paul Ryan to develop a plan to “protect Medicare,” go here and read Senator Wyden’s explanation. (You might be surprised; I was. But it is still unconscionable to give Ryan and the Republicans some political cover at a time like this, when so much is at stake.)

For a readable critical analysis of that Wyden-Ryan plan go here and here and here to get educated. It is essential to know what may happen to a vital social program.

Finally, in case any of us might think the White House will get wobbly-kneed on the Medicare proposal in the Ryan budget, remember this initial statement from Obama’s Communication’s Director Dan Pfeiffer:

We are concerned that Wyden-Ryan, like Congressman Ryan’s earlier proposal, would undermine, rather than strengthen, Medicare. The Wyden-Ryan scheme could, over time, cause the traditional Medicare program to “wither on the vine” because it would raise premiums, forcing many seniors to leave traditional Medicare and join private plans. And it would shift costs from the government to seniors. At the end of the day, this plan would end Medicare as we know it for millions of seniors. Wyden-Ryan is the wrong way to reform Medicare

Debt Hysteria Housecall

A conservative Globe blogger is in serious need of some timely counsel, and, being a conscientious public servant, I am here to provide it. He commented on my recent post, Let’s Agree:

We, all of us, in America, today are facing a $65 Trillion HOLE (Ok, plus or minus a “little bit”). Said another way…each and every American is “in hock” for about $550,000 due and payable some day.

And the crazy thing is NO ONE talks about that number nor does ANYONE propose how to fix it, “on bite at a time”.

And:

Well it is possible for a man to eat an elephant. But he must do so one bite at a time. But while we all argue, the NUMBER just keeps on going up and up. THERE, Duane, is the curve that MUST be bent, NOW. Just how deep is a $65 Trillion “cliff” I wonder?

Richest nation in the world my hind foot. Not with that kind of balance sheet!!!

Anson 

Dear Anson,

Because I hate to see you in such a state, as your Doctor of Tranquility, I am offering my limited help (I’m not a Doctor of Finance, remember) in treating the unfortunate hysteria you are suffering over the issue of the alleged “65 trillion” dollar financial “HOLE” you claim the country is about to disappear into. (Or are we going off a cliff? Or eating elephants? I forget.)

You should know that people who make that frantic $65 trillion charge (or any of the other various amounts) in the way they do are using what I consider to be the accounting equivalent of junk science:

First of all, the term “unfunded liabilities” has normally been used in right-wing, fear-generating blogs and articles and Fox “reports” on this very long-term wild speculation you mention, but that term has been lately discredited (because a “liability” is more of a legal term and promises made by the government are not actually legally binding on it). I notice now many folks are using the proper term, “unfunded obligations,” which is more accurate, but still junk, when used in the kind of analysis you referenced.

To put it as simply as possible, what you are referring to with your scary high number is the difference between projected federal financial commitments under current law and the projected revenues available to cover those commitments—over a completely arbitrary time horizon of 75 years.

These obligations are not technically “debt,” since Congress is free to pass legislation that would eliminate them altogether (don’t try doing that with your debt, by the way). And it is beyond silly to say “each and every American is ‘in hock’ for about $550,000 due and payable some day.”

Second, that time horizon (did you even know what it was?) could just as well have been 750 years and that big and fat and scary number would have been even bigger and fatter and scarier. (Let me see, what comes after “trillion”?)

The truth is that no one—or almost no one—actually believes these numbers are accurate for a lot of reasons, most notably that policies and situations change quite frequently over even short periods of time (just look at budget surpluses under Clinton and deficits under Little Bush), and 75 bleeping years is sort of a long time, don’t you think?  Go back 75 years (1936?) and imagine a bureaucrat in the government, perhaps Newt Nostradamus, estimating “unfunded obligations” in 2011. It is absurd on its face.

And while we’re at it, the Social Security and Medicare Boards of Trustees have said that

Projected Medicare costs over 75 years are about 25 percent lower because of provisions in the Patient Protection and Affordable Care Act…

Do you believe that? Of course you don’t.

The reason some conservatives promote hysterical talk about such things as unfunded liabilities and use such frightening language is because they seek to dismantle or sharply reduce our social commitments and scaring the public is one way, they believe, they can do it. 

While it is true that Medicare funding is a big problem in the out years, it is not, as I demonstrated recently, an insurmountable one, if policies to control health care costs are implemented and other things are done, like, say, raising revenues.  And they will get implemented and revenues will get raised, in some way at some time. So, get some sleep and stop worrying about it, for God’s sake. (Or, if you can’t sleep, use the up time to write your favorite Republicans and urge them to get real about taxes.)

Third, there is a comparative fallacy involved in these numbers. The gap, instead of being put in the form of aggregate unfunded dollar commitments, should be put in the form of percentage of projected GDP, which would attempt to account for economic growth over the time period. That way future gaps could be more fairly compared with today’s gap.  But then those numbers wouldn’t look or sound so damn scary, would they?

Fourth, let’s look at those “unfunded obligations” in a way that conservatives won’t like.  Let’s discuss Pentagon spending in those terms.  Is defense spending an obligation? Yeah, sort of (see the Constitution). And, like Social Security and Medicare, is there a Pentagon tax dedicated to our national defense? Huh? Nope, there’s not.  So, using the analysis you are advancing, every single dollar of necessary future military spending is an unfunded obligation, right?  That means, projected over 75 years, the gap between revenues specifically dedicated to the Defense Department and the projected military spending is, well, it is more money than God, or even Mitt Romney, has!

This stuff the right-wind peddles is analytical junk, Anson.  There really are no such things as “unfunded” obligations because the government has the power to tax to meet them. And using such language in the context you and others use it unnecessarily scares people who don’t know any better, and it doesn’t help arrive at rational solutions to our very real problems with long-term debt. 

The fact is you don’t need those misleading large numbers to make the point—which nearly everyone understands by now—that some important changes in Medicare (and a tweak or two in Social Security) are necessary to keep us fiscally sound.  Indeed, distorting the picture so grossly tends to lead away from careful, reasonable solutions in favor of distinctly reactionary and irrational ones. (Of course, as I said, some folks on the right wouldn’t mind that one bit, as long as the New Deal fell victim to such panic.)

But I am under no illusion that you, in your zeal to save the country, will stop worrying and stop trying to scare the bejesus out of people because you are fixated on our debt problem and therefore welcome uncritically any analysis that generates fear over it.  And I am certain you will not now listen to,

Your  Doctor of Tranquility,

Duane

How To Fix Medicare And Beyond

I have written quite a bit about health care reform over the past few years, including my last post of 2011, which received this comment from the always thoughtful and thought-provoking Jim Wheeler:

My conclusion: the present system, including the ACA, is unaffordable and the Paul Ryan plan is even worse. Extending Medicare to all ages, sorry Duane, would have the same problem, unless that is, if the government were given pricing power in the medical market, but it seems to me that such would be equivalent to the Public Option, the only solution that makes sense to me. The bottom line is a tough one in that any viable solution will have to slash industry profits by half, which is why industry lobbyists sank the Public Option in the first place.

My response is necessarily lengthy because the issues are obviously difficult.  But let the following stand as my current, if somewhat tentative, endorsement of what to do to fix what is wrong with our health care system, despite the passage of the Affordable Care Act:

Jim,

As you know, I was a proponent of the public option. But the kind of public option I would favor was found in H.R. 4789, which had 82 co-sponsors. It amended the Social Security Act “to authorize an option for any citizen or permanent resident of the United States to buy into Medicare.”

I choose Medicare-for-all not because it would be the best possible system, but because it seems to me to be the only politically possible system that would also be a considerable improvement over what we have now. I say that because most people already have a high opinion of Medicare and would, with gentle persuasion over time, be open to applying it to all people.

My own personal choice—I want to make clear—would be a complete government health care system, similar to the VA system, or even expanding the current VA system to include all people.  It turns out that since the late 1990s—contrary to what most people believe—the VA system—socialized medicine—is the model of efficiency and effectiveness. (And, of course, the “moderate” Mitt Romney wants to privatize it.) It also has the power to negotiate discounts for prescription drugs, which is essential to control costs.  This kind of truly socialized medicine would be my “public option.”

But I recognize the near-impossibility of such a move, given our politics and our historical national aversion to such things, even though it appears to me that conservatives would have a hard time labeling the VA system as dangerous European socialism and the military veterans who use it as scary socialists. But I digress.

Let’s talk first about the possibility of fixing or improving the current Medicare system, before extending it to all people. Without the fix, I agree that it would be a problematic option for all people.

To begin, let me get this out of the way: As a rule, I believe choice and competition are good things and serve us well as Americans. But let us keep in mind that they ought to be our servants and not our masters.

I also believe the profit-motive is indispensable for a society that seeks a general prosperity that benefits everyone, even if there are some inequities necessarily arising out of a system that values the concept of making gobs of money. (Severe inequities, though, should be addressed via a progressive tax system, but that’s for another day.)

But those who believe that increased choice and competition and profit-opportunities in the health care system overall will lead to greater efficiency and reduced costs don’t understand how the American health care system works or how it has worked in the past. (Phillip Longman does; read here and here for the details.) What this choice and competition leads to most often is inefficiency and wasted resources, often at the insistence of the health care consumer, who doesn’t mind all that much in times of dire need if, for instance, the specialist orders extra—and profitable—but unnecessary treatment.

Look at this graph, which I know you are familiar with:

The idea here, of course, is that as Americans (the top blue line) we are spending a lot of money on our private, profit-based health care system, compared with most of the rest of the industrialized world, and we are not necessarily getting our money’s worth. Many unnecessary expenses are built into the kind of system we have, including unnecessary treatment in the form of operations and other costly procedures.  

And, look, I don’t necessarily chalk up everything wrong with this picture to “greedy bastards” in the health care and health insurance business. There are plenty of entrepreneurial reasons why over-treating patients makes $en$e (see, for instance, this New York Times article by Dr. Peter Bach, who criticizes fee-for-service plans because they encourage doctors to quickly move patients through their practices and to order expensive and profitable testing).

And there are plenty of profit-minded reasons, given our capitalist system and what some call “actuarial logic,” why it is that insurance companies charge older folks more for insurance or discriminate against the sick, even though such behavior causes gratuitous harm to society.  They are in business to make money, not to promote the general welfare.

So, it only makes another kind of sense—common sense—to take, or begin to take, the profit-motive out of our health care system. As I said, I would be in favor of a complete government-run, VA-like system, but the second-best in my opinion would be to improve the Medicare system and extend it to all folks who want it.

Based on all that, I suggest considering the recommendations of the above-mentioned Phillip Longman, who says that to improve and make Medicare financially sustainable, we ought to set a date certain for the conversion of that system from an inefficient fee-for-service plan to one that utilizes Medicare-certified nonprofit HMOs.  He addresses the historical problems with Health Maintenance Organizations (there are many) and offers valuable examples of ones that have worked well, including, but not limited to, the VA system. (Among other non-government players, he mentions the Cleveland Clinic and the Mayo Clinic.)  

Longman says:

Approximately a third of all Medicare spending goes for unnecessary surgeries, redundant testing, and other forms of overtreatment, according to well-accepted estimates. The largest single reason for this extraordinary volume of wasteful and often dangerous overtreatment is Medicare’s use of the “fee-for-service” method of compensating health care providers that dominates U.S. medicine, under which doctors and hospitals are rewarded according to how many procedures and tests they perform. To fix this, the federal government should do the following: announce a day certain and near when Medicare will be out of the business of subsidizing profit-driven, fee-for-service medicine.

Republicans, famously, have voted en masse to voucherize Medicare, which would, as Longman says, “lead to seniors paying for nearly 70 percent of the cost of their health care, which is hardly insurance at all.” And certainly not “Medicare” at all.

Democratic fixes, says Longman, are less onerous for seniors, but “don’t necessarily save money” because “profit-maximizing providers remain free to game the system.” And some of the fixes built into the Affordable Care Act, like the Independent Payment Advisory Board, are subject to political demagoguery (“death panels”) and thus reversal, and at best, even if they survive, their ability to do good is “gradual.”

Longman again:

Unless a more immediate and certain reform is applied, most of the Medicare population will continued to be treated—for years if not decades to come—by the status quo of a pattern of deeply fragmented, wasteful, and dangerous fee-for-service care, the cost of which everyone now agrees is unsustainable. If we’re going to avoid financial Armageddon, we have to do better than that.

Phillip Longman’s idea of setting a date “when the Medicare system will stop covering fee-for-service medicine” and instead give seniors a choice “among competing managed care organizations” that do not operate under the profit motive sounds like a good place to start to me, in terms of fixing the Medicare system we have today.

After that, or as part of that fix, we could, if we generated the political will, extend the program as an option to all—even though Longman does not go that far in his proposal.

And speaking of political will, over all this talk of reform hangs the politics. By adopting his proposal, Longman argues, both Democrats and Republicans can declare some kind of victory:

It allows Democrats to say that they will not cut benefits to Medicare recipients. And Democrats should also like that these nongovernmental organizations serving the Medicare population will have the freedom to do things liberals have long wanted Medicare itself to do, like bargain with drug companies for lower prices. Meanwhile, Republicans who support this proposal will be able to boast that it takes vast decision- making power out of the hands of “unelected bureaucrats in the federal government” and puts that power in the hands of private organizations that compete with each other for customers.

Longman closes with this, which will serve as my close:

America is still a rich and productive country. Compared to Europe or Japan, it has a youthful population and no real long-term debt crisis except that caused by huge volumes of wasteful and dangerous fee-for-service medicine. So once again in our long history, Americans can have their cake and eat it too. We can improve our health care while lowering its cost, and in the process eliminate our long-term deficits and resume building for future.

So why don’t we feel more optimistic? Because there is this feeling of despair, especially among policy makers and the chattering classes, that we don’t know how, politically, to bring health care costs in line. We know that all other developed countries get better health care for less money, and that it is no real mystery how they do it. But all their approaches seem—or can be spun as— socialistic, paternalistic, and fundamentally un-American, and therefore impossible to consider.

Yet we have within our reach a solution that is not imported from abroad, and that has been proved on our own shores by all-American institutions, from our best nonprofit HMOs to the VA health system. We may not currently have the political will to use these institutions as the model and means to fix the health care crisis, and hence eliminate our long-term fiscal problems. But we shouldn’t fool ourselves into thinking it can’t be done.

If you want to hear Phillip Longman discuss at length his findings about the VA health system—he started out as a skeptic—here is a video of the talk. His interest in the health care delivery system was related to the unfortunate experience of his late wife, who died of breast cancer:

 

Let’s Agree

Let’s stop subsidizing the wealthy. Stop crony capitalism. Stop corporate welfare. Means-test our entitlement programs.”

The above quote was not said by some wild- or starry-eyed liberal. It was said by the Buddha of budgetary knowledge on the right, Paul Ryan, on ABC’s This Week last Sunday. 

In the spirit of the New Year and New Beginnings, let us end this year with a note of agreement. I agree with Mr. Ryan that we should stop crony capitalism—the only kind there will ever be without adequate public attention—and stop corporate welfare—corporations are doing just fine, thank you—and we should means-test our entitlement programs—especially Medicare, which is, as Paul Ryan knows very well, the biggest driver of our long-term debt problem. 

And Paul Ryan also knows very well that the plan he advanced earlier this year—which nearly every Republican this side of the Asteroid Belt voted for—would end the system created in 1965, even if the name would live on. (No matter what Politifact says.) Let’s all at least agree on that. 

And let us agree that the current Medicare system, which took more than 50 years to bring into reality, should be preserved. After all, it was signed into law by a Texan, Lyndon Johnson, and was supported by almost half of the Republicans in Congress at the time. 

So sensitive are Americans to perceived government interference, that even the sainted FDR dared not force the issue of public health insurance—which he supported—before the enactment of his social security bill was assured in 1935. And despite Missourian Harry Truman’s efforts to get the job done—President Johnson would eventually credit “the man from Independence” for those efforts and make the 81-year-old fighter the program’s first enrollee— it took another generation before folks without means could rest a little easier knowing they had at least basic health insurance they could afford, when they were on the unprofitable side of life. 

And among those who could rest a little easier were my parents. My dad, who was 56 years old when Medicare was passed, worked all of his pre-heart attack life. My mom worked full-time at home and part-time at what she called the “dime store.” Were it not for Medicare, well, the alternative for them would have been and, for me, remains, unthinkable.  Let’s agree that, for them and millions of  people like them, access to affordable government health insurance made—and for now, still makes—America a better place in which to live.

Truman, in a special message to Congress in November of 1945—1945!—said there were “certain rights which ought to be assured to every American citizen.” One of them, he said, was “the right to adequate medical care and the opportunity to achieve and enjoy good health.” What a shame, more than 65 years later, we are fighting over The Affordable Care Act, which guarantees Americans, sick or well, rich or poor, the right to health insurance, or rather the right to purchase health insurance from profit-minded private insurers. It is, by no means, a fulfillment of the vision of liberals, old or new. But it ain’t nothing. 

And yet we fight. Let’s agree to stop fighting about something so necessary. 

Truman said: 

In the past, the benefits of modern medical science have not been enjoyed by our citizens with any degree of equality. Nor are they today. Nor will they be in the future—unless government is bold enough to do something about it. 

People with low or moderate incomes do not get the same medical attention as those with high incomes. The poor have more sickness, but they get less medical care. 

He didn’t must make that statement in 1945 without evidence to back it up. And he had plenty: 

The people of the United States received a shock when the medical examinations conducted by the Selective Service System revealed the widespread physical and mental incapacity among the young people of our nation… 

As of April of 1945, nearly 5,000,000 male registrants between the ages of 18 and 37 had been examined and classified as unfit for military service. The number of those rejected for military service was about 30 percent of all those examined. The percentage of rejection was lower in the younger age groups, and higher in the higher age groups, reaching as high as 49 percent for registrants between the ages of 34 and 37. 

Think about that. And think about the health of those back then who were in their forties and fifties and sixties and beyond. Truman, understanding that the child is father of the adult, said that it is “important to resolve now that no American child shall come to adult life with diseases or defects which can be prevented or corrected at an early age.” 

Let’s agree that health care involves inter-generational agreements. Old folks, let’s make sure the young are cared for, even if their parents are not rich. Young folks, let’s make sure the old are cared for, even if they lack wealth. All of us are either young or getting old. The Affordable Care Act is simply a part of these inter-generational agreements—without which any modern and civilized society cannot continue to be modern and civilized. It ought to be without controversy, or at least without animus. 

But it’s not. We have folks around the country, and folks in Congress, who are fighting for the repeal of the Affordable Care Act with a kind of religious zeal, as if to lose the battle would mean the end of a God-blessed America. There are even some radicals who would move us back to not only 1964, before Medicare, but to 1934, before Social Security. They would leave the non-rich at the mercy of charities or family and friends, of whatever means. 

But if we can’t finally agree, as Paul Ryan seemed to suggest last Sunday, that entitlements—Social Security, Medicare and Medicaid—are a permanent part of our social fabric and that in order to afford them we may need to, among other things, means-test them, then I’m not sure there is anything we can agree on as a civilized nation.

As Harry Truman said so long ago, our government needs to be “bold enough” to do something about inadequate health care in our country.  All he was really saying was we-the-people need to be bold enough.

Bold enough to agree.

Silence Of The Fact Checkers

The left is rightfully outraged over Politifact’s designation as “Lie of the Year” Democratic claims that Republicans, when voting on Paul Ryan’s budget plan, voted to end Medicare.

Politifact was wrong and Democrats are right.

Even if Politifact and FactCheck.org are technically correct that the program “would not end” under the Republican proposal, that is a distinction without a difference. Voucherizing the program for all people under 55 would completely change it from its original conception by inventing a new system to take its place. Republicans weren’t so dumb that they would actually change the name of the program, but they would completely change its nature and its name would mean something totally different from what it means today.

What Republicans would actually do—we know this because almost all of them in the House and Senate voted to do it—is kill Medicare for those under 55, skin its corpse like Buffalo Bill did his victims in “Silence of the Lambs,” and dress up their new program in Medicare’s pelt. 

Now, if Politifact and other fact-checking organizations still think it is fair to call what’s underneath that layer of skin “Medicare,” then they are doing their readers a great disservice and it is up to Democrats to educate people before it is too late and the program is in the morgue—where many conservatives have wanted to put it since it was born.

%d bloggers like this: