From the category archives: privatization
It’s that time of the year (just days before Election Day) when every Congressional candidate extolls the virtue of Social Security. Too many of these candidates will then return to Congress (with your vote) singing a different tune lamenting that America simply “can’t afford entitlements” like Social Security and Medicare. Only after Election Day will you discover that “save” actually means “slash” and “protect” means “privatize.” They’ll claim your benefits must be cut or programs privatized to “save” the programs for future generations. The problem is...that’s simply not true and the American people of all political parties, ages and incomes don’t believe that cutting benefits is the best way to strengthen Social Security.
This Social Security disconnect is illustrated in a big way in a new report released today by the National Academy of Social Insurance. “Americans Make Hard Choices on Social Security” shows that Americans’ support for Social Security is unparalleled and they are willing to pay more in taxes to stabilize the system’s finances and improve benefits. We highly recommend you read the entire study (it’s important!) but here are some key highlights:
To gauge Americans’ policy preferences, the survey used trade-off analysis — a technique that is widely used in market research to learn which product features consumers want and are willing to pay for. The trade-off exercise allowed survey participants to choose among different packages of Social Security changes. As lawmakers would do, they weighed how each policy change would affect workers, retirees, and the program’s future financing gap, and then chose among different packages of reforms.
Seven out of 10 participants prefer a package that would eliminate Social Security’s long-term financing gap without cutting benefits. The preferred package would:
- Gradually, over 10 years, eliminate the cap on earnings taxed for Social Security. With this change, the 6% of workers who earn more than the cap would pay into Social Security all year, as other workers do. In return, they would get somewhat higher benefits.
- Gradually, over 20 years, raise the Social Security tax rate that workers and employers each pay from 6.2% of earnings to 7.2%. A worker earning $50,000 a year would pay about 50 cents a week more each year, matched by the employer.
- Increase Social Security’s cost-of-living adjustment to reflect the inflation experienced by seniors.
- Raise Social Security’s minimum benefit so that a worker who pays into Social Security for 30 years or more can retire at 62 or later and have benefits above the federal poverty line.
Again, not only do Americans value Social Security they are willing to pay to sustain and improve it. This package was preferred by large majorities across political parties and income levels. 68% of Republicans, 74% of Democrats, and 73% of independents favored this no-cuts plan, as do 71% of study participants with incomes above $75,000 and 68% of those with incomes under $35,000.
We suggest that if you see a political candidate on the campaign trail between now and Election Day ask him/her about this plan and its support by the vast majority of all Americans. Will they support fixing Social Security’s long-term solvency while also improving benefits without cutting the program?
It can be done, if only there was the political will to do it.
In spite of years and years of doom-and-gloom predictions from conservatives that Obamacare will hurt Medicare, the facts just continue to tell another, very different story. Earlier in the month the annual Medicare Trustees report
showed how the ACA continues to extend the program’s solvency. Now, the Congressional Budget Office
has even more to say:
“You’re looking at the biggest story involving the federal budget and a crucial one for the future of the American economy. Every year for the last six years in a row, the Congressional Budget Office has reduced its estimate for how much the federal government will need to spend on Medicare in coming years. The latest reduction came in a report from the budget office on Wednesday morning.
The changes are big. The difference between the current estimate for Medicare’s 2019 budget and the estimate for the 2019 budget four years ago is about $95 billion. That sum is greater than the government is expected to spend that year on unemployment insurance, welfare and Amtrak — combined. It’s equal to about one-fifth of the expected Pentagon budget in 2019. Widely discussed policy changes, like raising the estate tax, would generate just a tiny fraction of the budget savings relative to the recent changes in Medicare’s spending estimates.”
Unfortunately, these fiscal facts will be ignored by those in Washington determined to cut Medicare benefits. Even though he’s on a nationwide book tour, Rep. Paul Ryan is doing everything possible to ignore talking about his plan which would turn Medicare into CouponCare while also repealing the ACA -- stealing years from Medicare’s solvency, eliminating free screenings for seniors, preserving massive subsidies for private insurers in Medicare Advantage and bringing back the costly prescription drug donut hole.
It must be campaign season! GOP candidates, under Karl Rove’s tutelage, have doubled-down on their Medicare and Social Security dodge and deflect strategy. The heart of this political strategy is to avoid talking about GOP candidates’ true plans for Social Security and Medicare while simultaneously portraying their opponents as the “enemies of seniors.”
Greg Sargent offers this perspective:
“It is remarkable to watch Rove’s group try to position multiple Democratic Senators as the real threat to social insurance for the elderly, for the third straight cycle — and even more intriguingly, to use Simpson Bowles to do so. After all, Simpson Bowles is still widely treated as a paragon of unimpeachable fiscally responsible centrism, and Dems have long been pilloried by Beltway fiscal scold types for refusing to embrace its sanctified prescriptions for deficit reduction.
Indeed, this sort of Crossroads rhetoric should outrage fiscal conservatives. As Philip Klein put it in a post slamming Crossroads’ ad against Mark Pryor: ‘if Republicans want to be a limited government party, they have to be making the case for reforming entitlements — not running ads attacking Democrats from the left.’ “
As a reminder, Simpson Bowles is the Wall Street backed plan which would raise the retirement age, change the Social Security formula to cut benefits by 5%-30% while also changing the COLA formula to cut benefits for both current and future retirees. Simpson Bowles has been touted by conservatives and centrists as a “balanced plan” even though it imposes 75% in benefit cuts (largely on the middle class) and only 25% in revenue increases. How incredibly cynical for Karl Rove and crew to attempt yet another rewrite of history on behalf of his GOP congressional clients, most of whom would not only support Simpson-Bowles but also the GOP/Ryan budget which would be especially devastating to Social Security and Medicare.
So, as you will inevitably see these ads make their way onto your local channels, here’s what you need to remember about the GOP campaign strategy on Social Security and Medicare from their 2012 playbook and our blog post back then:
A memo and campaign how-to video from the National Republican Congressional Committee provides an incredibly clear and cynical look behind their political curtain, as the NRCC gives Republican candidates tips on how to dodge the discussion they really don’t want to have about the votes they’ve already cast on Medicare:
“Do not say: ‘entitlement reform,’ ‘privatization,’ ‘every option is on the table,’ … Do say: ‘strengthen,’ ‘secure,’ ‘save,’ ‘preserve, ‘protect.’” NRCC Memo
It’s up to voters to ask the right questions. That happened in New York with GOP candidate Elise Stefanik and hilarity ensued:
John Nichols at The Nation has this week’s must-read story on Rep. Paul Ryan’s never-ending quest to cut Social Security benefits. Nichols has read Ryan’s new book (so we don’t have to) and provides this analysis:
The well-regarded second-term congressman met with Vice President Dick Cheney, who was at the peak of his co-presidency powers. Like Cheney in his younger years, Ryan was a former congressional aide who had worked the conservative think-tank circuit before getting himself elected to the House. The Washington insiders should have gotten on famously.
But the vice president was not buying what the man, who is now described as “the intellectual leader of the Republican Party,” was selling.
Ryan recalls the meeting this way:
“The surplus has given us a huge opportunity,” I explained. “If we dedicate the Social Security surplus to reform, we can shore up the program and end the raid on the trust fund.” I talked about the opportunity to create a real ownership society, how workers could actually own a piece of the free enterprise system through these reforms. As soon as I finished my pitch, Vice President Cheney said, “Yeah, we’re not going to do that.” Then he looked at the person sitting next to me, signaling that he was ready to hear the next idea. His terse reply was the verbal equivalent of someone swatting an annoying mosquito from his face.
Of course later the Bush administration did in fact try to privatize Social Security with a famously failed national town-hall blitz in which the more they talked, the more the American people rebelled against Bush’s plans to send workers' Social Security to Wall Street. Cheney also supported the privatization of the Pentagon; however, Nichols points out that the politically astute Vice President at least understood one truism that Paul Ryan still seems oblivious to:
Cheney recognized then, as he appeared to again in his 2001 “annoying mosquito” conversation with Ryan, that domestic political calculations require at least some deference to the wisdom of the American people.
Today that wisdom says that the United States need not, and must not, slash the social safety net in order to advance reforms that will be very good for Wall Street but very bad for Main Street. Until Paul Ryan accepts this reality, he will remain stuck on the same questions. Indeed, if the Republicans nominate the ambitious young congressman for president in 2016, and if he runs on the agenda Dick Cheney swatted away fifteen years earlier, Ryan will again find himself asking, “Why did we lose? How did it happen? Why does the Republican Party seem to keep losing ground.”
We recommend you read the whole story here.
For the second year in a row, America’s massive health insurance industry lobby launched a Washington lobbying and advertising blitz hoping to scare seniors into believing they’ll lose their Medicare and politicians will lose their seats if the industry’s government overpayments aren’t protected. Mission accomplished. Rather than trimming rates, the Obama administration raised them:
“Private Medicare plans would see a 0.4 percent boost in their payment rates for 2015 under a final rate announcement made by Centers for Medicare and Medicaid Services officials Monday.
Officials with Medicare said the better-than-expected news for insurers came about in part as a result of healthier enrollees signed up for both Medicare Advantage and traditional fee-for-service plans, which means less of a cost burden on the health insurance system for the aged.” Congressional Quarterly
When CMS says “in part” what they aren’t mentioning is the part where the administration basically caved (for the second year in a row) to the insurance industry’s million dollar lobbying blitz to keep its billions of dollars of federal overpayments intact.
“Today’s announcement by CMS to, once again, preserve government overpayments to private insurers in Medicare Advantage is bad policy and bad economics for the Medicare program. These subsidies were supposed to be gradually trimmed in order to expand benefits and improve the quality of care for all seniors in Medicare. However, each year the insurance lobby threatens to cancel coverage or charge more to seniors in MA plans rather than accept a reduction in their overpayments or reimbursement rates.
For many years, private insurance companies have claimed they can provide better coverage to seniors at a lower cost. The reality proves otherwise. Since 2003, all seniors in Medicare (including those not even enrolled in Medicare Advantage) have paid higher premiums to help fund the billions in government overpayments to private Medicare Advantage insurance companies. Over the years, as much as 14% more per beneficiary has been paid to MA plans than is paid to cover individuals enrolled in traditional Medicare. It’s a wasteful federal boondoggle that was rightfully corrected by passage of the Affordable Care Act (ACA) in 2010. Additionally, thanks to the ACA, growth in health care costs have been decreasing which means that reimbursement rates also go down. As reimbursement rates have decreased, MA plan enrollment has increased.
Let’s be clear, contrary to the health insurance industry’s massive lobbying campaign claims, Medicare doesn’t make the decision about cuts to seniors’ MA coverage, including increasing premiums or reducing access to doctors. That decision rests squarely in the board rooms of the nation’s private insurance industry, which is unwilling to give up a penny of their government giveaway in favor of continued threats of diminished coverage and higher premiums for seniors.
This annual drama with private insurers in Medicare proves, once again, that when private MA plans are unwilling to compete on a level playing field with traditional Medicare, seniors will ultimately pay the price. So much for providing better coverage for less.”...Max Richtman, NCPSSM President/CEO
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