- Public rhetoric obscures important facts about these
plans politicians won't discuss in their zeal to end them incrementally.
- Medicaid is welfare for low-income beneficiaries, jointly
funded by the states and Washington, managed at the state level.
- Social Security and Medicare are insurance programs,
funded by worker-employer payroll tax deductions. They're contractual federal
obligations to eligible recipients who qualify. However, you'd never know
it the way both programs are publicly discussed, explaining everything
but the truth.
- On August 14, 1935, the Social Security Act became law,
known as the federal Old-Age, Survivors, and Disability Insurance program
(OASDI). It provides retirement, disability, survivorship, and death benefits.
It's still America's most effective poverty reduction program that's worked
remarkably well since inception. It exists to provide secure inflation-adjusted
retirement or disability income, unlike risking personal savings to create
private wealth and perhaps lose it.
- Despite bogus claims, it's not going bankrupt. When properly
administered, it's sound and secure, needing only modest adjustments at
times to assure it.
- On July 30, 1965, Lyndon Johnson signed the Social Security
(Medicare) Act into law, enrolling Harry and Bess Truman as its first recipients.
- Medicare.gov calls it "the nation's largest health
insurance program," covering 40 million Americans. It's a "Health
Insurance program for people age 65 or older, some disabled people under
age 65, and people of all ages with End-Stage Renal Disease (permanent
kidney failure treated with dialysis or a transplant)."
- Bipartisan complicity wants Medicare and Social Security
ended, citing the nation's burgeoning debt and enormous unfunded liabilities
for both programs. The web site usdebtclock.org lists them as follows:
- (1) the US National Debt: over $14 trillion;
- (2) Social Security Liability: nearly $15 trillion;
- (3) Prescription Drug Liability: nearly $20 trillion;
- (4) Medicare Liability: nearly $79 trillion.
- Total: over $113 trillion plus the National Debt.
- Most important is that future liabilities mask today's
soundness that can stay that way if current programs are properly administered.
That's omitted from hyped scare tactics to convince future recipients to
make unjustifiable sacrifices. Like them or not, they're coming, major
media reports promoting the idea as well as politicians from both parties.
- Republicans, in fact, always opposed these programs.
Given unsustainable deficits from out-of-control military spending and
corporate handouts, they now see a chance to end them by a combination
of cuts, shifting cost burdens to states and beneficiaries, plus lots of
smoke and mirrors. Key is that Democrats concur, despite softer public
rhetoric, appealing to constituencies while betraying them behind closed
doors, Obama a duplicitous co-conspirator.
- As a candidate, he "remain(ed) committed to making
sure Social Security (remain) solvent and viable for the American people
now and in the future."
- Moreover, he opposed privatizing Medicare, promising
"a universal health care bill, allow(ing) people who do not have access
to group coverage through their employers or public programs....to buy
into a national pool (under) a new public plan....that offer(s) comprehensive
(affordable) benefits," including for prescription drugs.
- At a February press conference, however, he promised
major entitlement program cuts as part of his deficit reduction program.
Emphasizing the need for "tough choices," despite inflicting
"real pain" on working Americans, he said:
- "Medicare and Medicaid are huge problems because
health care costs are rising even as the population is getting older. And
so what I've said is that I'm prepared to work with Democrats and Republicans
to start dealing with that in a serious way. We made a down payment on
that with health care reform last year."
- Social Security is also targeted, Obama's deficit reduction
commission proposing deep cuts in Medicare, increasing Medicaid co-pays,
raising the Social Security retirement age to 69, and reducing cost-of-living
increases as an initial broadside before ending these programs entirely.
- At his press conference, Obama outlined a two-step process:
- -- a five year discretionary spending freeze combined
with major education, environmental, and other social benefit cuts; and
- -- "entitlement reform," on the backs of working
Americans least able to afford it.
- On April 5, Washington Post writers Lori Montgomery and
Philip Rucker headlined, Republicans embrace Rep. Ryan's government budget
plan for 2012," saying:
- Their vision includes "privatiz(ing) Medicare for
future retirees, cut(ting) spending on Medicaid, and other domestic programs,
and offer(ing) sharply lower tax rates to corporations and the wealthy."
- Drafted by House Budget Chairman Paul Ryan, the proposal
aims to cut discretionary spending "to its lowest level since 1949,"
Ryan claiming it will create jobs and promote growth by slashing "relentless
government spending, taxing and borrowing."
- Longtime financial analyst Bob Chapman disagrees, saying
in his latest International Forecaster commentary:
- "Virtually no change in out of control spending"
is planned. "The deficit is accelerating not decelerating. It is obvious
that (lawmakers) know exactly what they are doing and that is destroying
the financial system and the American economy. By the end of the year and
perhaps sooner, the deficit will be more than 100% of GDP, a role reserved
for Banana Republics, and there is no end in sight."
- "No reality check, no control, no attempt to stop
the deficit hemorrhage. War spending rages out of control," Obama's
latest foray exacerbating it. "The nation is being ripped apart internally
and there is no respite in sight. (No one) understand(s) that things cannot
go on this way. Austerity is going to be thrust upon us and there is going
to be economic chaos" because military spending and corporate handouts
are prioritized over public need.
- Moreover, "(t)he Fed is destroying the monetary
system. The president and Congress are burying the economy in debt, and
our transnational conglomerates along with this gang of criminals have"
destroyed America's industrial base...."There is no question that
the US government will have ongoing deficits of $1.3 to $2.2 trillion annually
for some time to come." As a result, "there is no chance of the
debt of government ever being paid."
- Instead, limits will be raised. "The Republicans
are playing politics and remember the same group of thieves overwhelmingly
control both parties." The amount of government-sanctioned fraud is
incomprehensible. "The question is do we save America and civilization
as we have known it, or do we allow it to collapse around us," making
our futures "irreversible."
- Yet congressional Republicans call this "The Path
to Prosperity," the title of Paul Ryan's budget plan, slashing entitlements
while continuing out-of-control spending on militarism and corporate handouts,
Washington's version of equity, favoring the rich at the expense of working
- Ryan's proposal will cut trillions from Medicare and
Medicaid over the next decade. Medicare will be gradually privatized, incrementally
phasing it out for enrollees under 55, raising the eligibility age to 67,
and replacing it with fixed amount vouchers for private plans, instituting
major cost-sharing increases. As a result, lower income individuals and
those needing expensive treatments may be priced out of getting it entirely.
- Medicaid funding will become block grants to states,
Ryan saying they'll be able to "customize" health care for the
poor, or perhaps eliminate it entirely if budget constraints demand.
- His plan reportedly follows recommendations from two
deficit cutting commissions - Obama's and another chaired by former Senator
Pete Dominici and Alice Rivlin, former director of the Office of Management
and Budget and the Congressional Budget Office called "Restoring America's
Future," by destroying it. Specifically, it calls for huge discretionary
spending cuts, including:
- -- indexing Social Security benefits to life expectancy
to reduce them as longevity increases;
- -- eliminating annual cost of living adjustments (COLAs),
despite sharply increasing healthcare and other expenses, especially impacting
- -- cutting Medicare benefits, including by large Part
B premium increases, co-pays, and fees for outpatient services, as well
as establishing privately owned, lower-cost, health insurance exchanges
to be given competitive cost advantages over traditional Medicare; the
idea, of course, is to replace it, leaving beneficiaries at the mercy of
predatory insurers that profit by charging exorbitant premiums (too costly
for many) and denying expensive care; and
- -- cutting Medicaid by the amount it grows faster than
GDP, providing less care for the poor, eventually perhaps none.
- Both commissions also propose other social benefit reductions,
as well as major corporate and personal tax cuts, favoring the rich - customary
financial reforms hitting working households hardest.
- A Final Comment
- Despite a severe Main Street depression, Democrats and
Republicans plan austerity instead of essential stimulus, including for
entitlement programs, vital to strengthen, not undermine when they're most
needed and will be as well in good times.
- Instead, they're on the chopping block for elimination
because Republicans are Hooverites, Democrats aren't New Dealers, and Obama's
no FDR. Combined, they let Wall Street loot the treasury, reward other
corporate favorites generously, ignore vital people needs, do little to
create jobs or help homeowners facing foreclosure, spurn budget-strapped
states, and spend around $1.5 trillion annually on unbridled militarism
and imperial wars at a time Washington has no enemies. No wonder America's
on a fast track to tyranny and ruin, no longer a fit place to live in.
- Stephen Lendman lives in Chicago and can be reached at
firstname.lastname@example.org. Also visit his blog site at sjlendman.blogspot.com
and listen to cutting-edge discussions with distinguished guests on the
Progressive Radio News Hour on the Progressive Radio Network Thursdays
at 10AM US Central time and Saturdays and Sundays at noon. All programs
are archived for easy listening.