Neediest and sickest would pay the price under GOP budget plan
If consensus-building is a hallmark of effective governing, a rule you can probably find in a civics textbook or two, then I suppose it's an achievement that everyone agrees that unending federal deficits will lead us to perdition.
But the unresolved question is what to do about it.
That question is bound to be hashed out among the contestants for the 2012 presidential sweepstakes, whether they represent the Democratic Party, the Republican Party or the You-Gotta-Be-Kidding-Me Party (chairman of the board: Donald Trump).
The two political bookends of the deficit debate were established over the last two weeks, first in a long-term budget road map issued April 5 by Rep. Paul D. Ryan (R-Wis.), chairman of the House Budget Committee, and passed by the Republican majority of the House on Friday, and then by President Obama in his budget speech Wednesday.
If there was any doubt that the debate over deficits is not about numbers but philosophies of government — it just exploits the vocabulary of fiscal policy — these two events should lay it to rest.
The principal target of Ryan's plan is government healthcare spending — Medicare, Medicaid and the healthcare reform plan. That's a reasonable place to aim any deficit-reduction plan, because that's the area where costs are rising most sharply.
But his solutions are the antithesis of reasonable. They involve almost entirely throwing the neediest and sickest Americans out from under the government umbrella to fend for themselves. Medicare as we know it would be eradicated, the cost of Medicaid shifted largely to already hard-pressed state government, and a reform program designed to give tens of millions more Americans the protection of health insurance canceled outright.
Is this really the only path to deficit reduction?
Obama, to his credit, drew a philosophical line in the sand that his progressive supporters have been waiting to see for two years. Ryan's vision, he said last week, "says America can't afford to keep the promise we've made to care for our seniors…. It's a vision that says up to 50 million Americans have to lose their health insurance in order for us to reduce the deficit."
Obama connected the dots between the House Republican majority's proposed spending cuts and its determination to preserve tax cuts for the wealthiest taxpayers — proposals to cut out not only government healthcare but a host of programs that directly benefit the middle and working class while indirectly helping to build the American economy for the future.
That's "a vision that says even though Americans can't afford to invest in education at current levels, or clean energy, even though we can't afford to maintain our commitment on Medicare or Medicaid, we can somehow afford more than $1 trillion in new tax breaks for the wealthy," he said.
Indeed, as the bipartisan Congressional Budget Office found in its analysis of the plan (done at Ryan's request), until the Medicare and Medicaid cuts kick in starting in 2022, the red ink of its tax cuts overwhelms the savings from other program reductions. Ryan's plan actually increases federal public debt compared with what it would be under current law: to 70% of gross domestic product under the Ryan plan compared with 67% under current law. Nevertheless, it passed by a party-line vote Friday, just before the nation's lawmakers high-tailed it out of Washington for a two-week vacation.
As for the health programs, the House passed Ryan's proposal to extinguish Medicare as a guaranteed coverage program and substitute healthcare vouchers, allowing seniors to buy private health insurance with a government subsidy.
The vouchers would rise in value with the consumer price index, but as medical expenses have been rising much faster than general inflation, the value of the government subsidy would erode over time. The CBO calculated that the share of standardized medical expenses paid out-of-pocket by the typical 65-year-old in 2030 would be 68% under Ryan's plan, compared with 25% under current law.
The delivery of health benefits would be much less cost-effective under this giveaway to the private insurance industry than it is under Medicare, as seniors would be paying for the private insurers' much higher administrative costs, including profits. And don't forget that the elderly are sicker than the general population, so the premiums charged for this standard plan may well rise faster than overall medical inflation, putting the seniors further behind the curve.
There are other flaws in this arrangement. For example, because traditional Medicare would remain in place for today's retirees and near-retired, the difference between their health program and that of younger retirees after 2022 could generate political pressure for Congress to increase the latter's benefits. The proposal assumes that raising patients' out-of-pocket costs leads to more cost-efficient care, a notion that is unproven at best and has been questioned by some experts.
The proposal overlooks the fact that the cost of healthcare for the elderly can't easily be wished away. The CBO observes that some elders unable to pay for their care might end up in the government's disability or Supplemental Security Income (SSI) programs, both of which are already overstressed.
Others may require help from their children, which would only cut into the next generation's economic resources; alleviating exactly such an intrafamilial burden was a founding principle of both Medicare and Social Security.
Ryan is right when he suggests that his plan would "fix" Medicare; it's the same way that the Mafia "fixes" an informer. In both cases the solution guarantees that the target won't be around to create trouble anymore, and as long as you don't feel remorse about collateral damage you're home free.
As for Medicaid, Ryan proposes to shift much of the federal burden of this program for the poor and infirm to the states, while reducing its overall scope and eliminating some federal mandates. This is plainly a threat to the well-being of our most unfortunate citizens. Can you think of any states that, confronted with fiscal problems and relieved of the federal mandate and federal dollars, might decide to take a hatchet to their Medicaid budgets? I can think of about 50.
Finally, repealing healthcare reform simply reinstates the system of coverage dominated by private profit-seeking companies that has failed to stem rising medical costs for decades, while leaving some 47 million American residents uninsured.
There's no reason to believe that Ryan's proposals will do anything to reduce healthcare costs in the U.S., and reason to believe they would do the opposite. They would relieve the government of responsibility for paying much of the price of care, but if the result is that individuals carry a heavier burden — and the neediest individuals the heaviest — is that really a "path to prosperity," as the Ryan plan was titled?
As always, it's instructive to summon up the words of the dean of progressive social policy, Franklin Roosevelt. In 1935 he was asked his opinion of the platform of the American Liberty League, which, like the Ryan cabal, aimed to dismantle the New Deal under the guise of preserving individual rights and free enterprise. (Its principal backers were the Du Pont family, conservative Democrats who might be thought of as the Koch brothers of that era.)
"The two particular tenets of this new organization," FDR told reporters, "say you shall love God and then forget your neighbor. For people who want to keep themselves free from starvation, keep a roof over their heads, lead decent lives, have proper educational standards, those are the concerns of government besides these two points." He threw in "the protection of the life and the liberty of the individual against elements in the community that seek to enrich and advance themselves at the expense of their fellow-citizens."
Those are still the concerns of government, and to say we can't afford them is an affront to the working people who build America today. But let's give the House GOP majority the last word. In the introduction to the GOP budget resolution passed by the House, Ryan declared: "Americans face a monumental choice about the future of their country."