What Fresh Hell Is This?

May 26, 2011

Senator Toomey Votes To Phase Out Medicare

From Talking Points Memo:
The GOP continued its bloody walk into the Medicare buzzsaw Wednesday, when 40 out of 47 Senate Republicans voted in support of the House GOP budget, and its plan to phase out and privatize the popular entitlement program.

The test vote failed by a vote of 57-40. But the roll call illustrates that Medicare privatization -- along with deep cuts to Medicaid and other social services -- remains the consensus position of the GOP despite the growing political backlash against them.
Here's the roll in case you don't believe me.

Ezra Klein described how the phase out would occur:
To move us to surpluses, Ryan's budget proposes reforms that are nothing short of violent. Medicare is privatized. Seniors get a voucher to buy private insurance, and the voucher's growth is far slower than the expected growth of health-care costs.
With no guarantee, of course, that any insurance company will actually sell the senior with the voucher the insurance he or she was given the voucher to buy. Medicare is guaranteed. Hence the phase out.

And the backlash? We read this from the AP:
They're not buying it. Most Americans say they don't believe Medicare has to be cut to balance the federal budget, and ditto for Social Security, a new poll shows.

The Associated Press-GfK poll suggests that arguments for overhauling the massive benefit programs to pare government debt have failed to sway the public. The debate is unlikely to be resolved before next year's elections for president and Congress.

Americans worry about the future of the retirement safety net, the poll found, and 3 out of 5 say the two programs are vital to their basic financial security as they age. That helps explain why the Republican Medicare privatization plan flopped, and why President Barack Obama's Medicare cuts to finance his health care law contributed to Democrats losing control of the House in last year's elections.
TPM added:
To shelter GOP dissidents from the vote to privatize Medicare, but also to shore up their bona fides on the right, the Senate also held a test vote on a similarly austere alternative budget authored by Sen. Pat Toomey (R-PA).
But the Center for Budget and Policy Priorities points out:
At first blush, the Toomey plan may seem more moderate than the Ryan budget, which the Senate also will likely consider this week. That’s because the Toomey plan does not include Chairman Ryan’s controversial proposal to replace guaranteed Medicare benefits with vouchers that would cover part of the cost of purchasing private health insurance — a provision that would raise total health care spending attributable to Medicare beneficiaries and more than double out-of-pocket costs for a typical 65-year-old beneficiary in 2022. (Neither plan proposes savings in Social Security.)

But, in several ways, the Toomey budget is more radical than the Ryan plan. While it essentially mirrors the Ryan plan in proposing deep cuts in nondefense discretionary programs, it proposes much deeper cuts in entitlement programs other than Medicare — and relies on a rosy economic scenario and fanciful assumptions about tax collections — to claim it produces modest surpluses in 2020 and 2021 instead of the approximately $400 billion deficits in each of those years under the Ryan plan.
Meanwhile, the CBPP has something interesting to say about the deficit:
Some lawmakers, pundits, and others continue to say that President George W. Bush’s policies did not drive the projected federal deficits of the coming decade — that, instead, it was the policies of President Obama and Congress in 2009 and 2010. But, the fact remains: the economic downturn, President Bush’s tax cuts and the wars in Afghanistan and Iraq explain virtually the entire deficit over the next ten years (see Figure 1).
Here's Figure 1:

They add:
The events and policies that pushed deficits to these high levels in the near term were, for the most part, not of President Obama’s making. If not for the Bush tax cuts, the deficit-financed wars in Iraq and Afghanistan, and the effects of the worst recession since the Great Depression (including the cost of policymakers’ actions to combat it), we would not be facing these huge deficits in the near term. By themselves, in fact, the Bush tax cuts and the wars in Iraq and Afghanistan will account for almost half of the $20 trillion in debt that, under current policies, the nation will owe by 2019. The stimulus law and financial rescues will account for less than 10 percent of the debt at that time.
So dealing with the deficit by phasing out Medicare (or cutting other entitlements) makes perfect sense to Pat Toomey and those other 39 Republican Senators. Let's make sure those millionaires and billionaires keep their Bush Era tax cuts! That'll solve this budget problem (the one that Bush caused) for sure!


EdHeath said...

Back in 1979 when I took my first college level political science class, I learned about how Congress was raiding the Social Security trust fund to keep from raising taxes while they started new projects (small district and large national). As far as I know, they never put any money back in there, but back in ’79 it was not a crisis, merely an indication of how lousy Congress was(/is). By the way, I don’t know if the Medicare trust fund was raided, but it doesn’t really matter.

These days, we do know that Social Security and Medicare are facing looming, somewhat distant but still rapidly approaching funding crises. Sober, rational people have to admit that something needs to be done.

But given the current state of the economy, I think that unemployment and economic recovery should be higher priorities until unemployment comes down. When unemployment does come down then revenues will increase, so we can see what the state of Social Security and Medicare is then. Should we eliminate deficit spending? Well, until the economy recovers, deficit spending is the proven Keynesian recommendation. Once the economy recovers, I think it is reasonable to put almost anything on the table, although I think funding public education and infrastructure such as highways, new rail and also green energy programs are wise policies.

But of course instead we have ideologically (as opposed to academically) driven policies designed to, as you say, shift the tax burden from rich to poor, and strip out government programs that benefit the poor.

Conservative Mountaineer said...

@Ed.. You said "I think it is reasonable to put almost anything on the table, although I think funding public education and infrastructure such as highways, new rail and also green energy programs are wise policies."

You forgot the ponies! Ponies for everyone!

Hmmm, what do two of your priorities have in common? Propping up public sector Unions... only delaying the day of reckoning. High-speed rail is a boondoggle.. capital costs are typically grossly underestimated and rider subsidies are typically grossly understimated. As for green energy programs, I believe most are an abject failure and do not have an economic benefit.

It cannot be argued (with a straight face) that the economic priorities of this Administration have been beneficial. Only now are we seeing the folly with the public sector here in PA and throughout the Country.

Unless the Federal and State governments reduce spending in absolute terms (not simply slow the rate of growth), we're looking at even more serious problems even in the near term.

Where are the Democrats and their budget proposals? Harry Reid refuses to even pass something. The Administration wants to spend, spend, spend. The Administration has maxed out their credit card and wants Congress to raise the Administration's credit limit without agreeing to reduce it's spending.

Guess what? We don't have the money!

The can has been kicked down the road for too long. Drastic actions are required.

EdHeath said...

You know, CM, it is funny how last summer running up to the midterms all conservatives could talk about was how the government had to address unemployment. By January all talk of unemployment from conservatives had disappeared, and the talk of deficit reduction through spending reductions appeared. Of course, instead of suggesting that taxes could be raised, instead Paul Ryan suggested reducing taxes for the wealthy. His revenue estimates depend on the US economy reaching an unemployment rate of 2.8%, a number it has not reached in the last sixty years (it did hit 2.9% in 1953).

You really don't believe in investing in the future, in repairing infrastructure and apparently you believe the world's oil is unlimited, and we can burn it all without consequence. You really believe you are smarter than people who have doctorates in physics and geology. You apparently believe that teachers are greedy lay-abouts who do nothing all.

We clearly don’t agree on basic economic theory (I assume you did not have a straight face when you typed your comment). I learned economics from texts written by Paul Samuelson, William Baumol and Alan Blinder. I don’t know where you learned economics from. I wonder how you explain the economic recovery in the Great Depression (or perhaps you claim it didn’t recover). I choose to believe that the national health insurance programs of Europe, Japan, Australia and New Zealand, which have better aggregate health outcomes and lower costs per capita are better programs than our free market health care program (which has now been reformed to a program similar to Switerland’s).

But keep repeating the Republican line (of the moment). If you say it loud enough, use simplistic language and made up “facts”, people who get all their news from Fox News will believe you. And no one else matters.