From the category archives: entitlement reform
We have been skeptical since last fall about President Trump’s promises not to touch Social Security and Medicare, partly because of the privatizers and cutters he appointed to high office. Now, according to an article in today’s Washington Post by reporter Dave Weigel, Trump’s budget director, Mick Mulvaney, is actively agitating for the Trump administration to “work around” those promises:
"I’ve already started to socialize the discussion around here in the West Wing about how important the mandatory spending is to the drivers of our debt. I think people are starting to grab it.” - Mick Mulvaney on Hugh Hewitt radio program
Mulvaney claims that he is not really advocating that the President break his promises. Instead, the budget chief seems to be playing a semantic game by redefining what Trump really meant.
"Mulvaney… has said that any Republican reform would be consistent with Trump’s promise, by defining the act of ‘saving’ Social Security and Medicare as anything that allows them to meet obligations — even and especially if those obligations are reduced.” – Washington Post 3/6/17
That is a dubious bending of the President’s words on the campaign trail. Mulvaney is, in effect saying, we have to cut Social Security and Medicare in order to save them, which is patently wrong. The two programs could be kept solvent deep into the 21st century through modest and manageable measures that we have detailed many times since last Fall, with no benefit cuts. In fact, Senator Bernie Sanders’ new bill in Congress would increase benefits and extend Social Security’s solvency until 2078.
Mulvaney is being even more disingenuous, though, because candidate Trump explicitly promised not to cut either program. Trump told a post-election rally in Des Moines in December:
"You’ve been paying into Social Security and Medicare… We’re not gonna cut your Social Security and we’re not cutting your Medicare.” - President-elect Trump, December, 2016
It’s hard to see how Trump could have been any clearer, or how Mulvaney could claim the President could be convinced to cut Social Security and Medicare without violating his campaign promises. Yet, Mulvaney’s proposals on earned benefits programs would undeniably lead to benefit cuts. The Post points out that at his January confirmation hearing, he advocated raising the Social Security retirement age to 70, and supported means-testing to reduce Medicare spending, two unpopular measures with voters in the National Committee’s recent public poll.
Of course, Mulvaney is not the only Trump administration official gung ho to cut and privatize our retirement security programs. HHS Secretary Tom Price played a similar word game to Mulvaney’s last week, affirming that Medicare is a “guarantee” to seniors while implying that it has to be modified in order to uphold the guarantee.
We wrote last week about the potential bait-and-switch that the administration and Congressional leaders may use, by promising that current retirees won’t be affected by any changes, but that younger Americans might be by the time they are seniors.
None of this lends much comfort to current or future retirees – nor offers much reassurance that the President’s promises on Social Security and Medicare won’t be eroded, if not now, then in the near future.
While we at the National Committee extend warm holiday wishes to all our readers, the joy of the season is overshadowed by the knowledge that the coming year is full of unprecedented peril for our cherished income security programs – and our health care.
Throughout the year, we warned about the dangerous positions Trump and the GOP had taken on Social Security, Medicare, Medicaid, and the Affordable Care Act. As early as March, we exposed Trump’s past statements in favor of raising the retirement age to 70 and privatization. At the same time, we warned about renewed GOP plans to slash Medicare benefits. In June, we predicted that Speaker Ryan and Donald Trump would eventually join forces to privatize Medicare. After Donald Trump locked up the nomination, we flagged the dangers to Social Security in the Republican platform. When Trump picked his running mate, we shined a harsh light on Mike Pence’s long history attacking Social Security and Medicare. After the election, the National Committee began pushing back against the GOP’s race to dismantle our income security programs, beginning with a benefit-slashing bill by House Social Security Subcommittee Chair Sam Johnson, and Trump’s naming a notorious privatizer for Health and Human Services Secretary.
Make no mistake about it, the GOP-led 115th Congress will waste no time implementing their plans to destroy Medicare and Social Security as we know it – and repeal the Affordable Care Act. President-elect Trump has offered no assurance that he will stand by his campaign promise not to touch Social Security and Medicare, and as we reported, his past statements on both programs are not comforting. Pending legislation on Capitol Hill could cut Social Security benefits by 1/3, raise the retirement age, and decrease COLAs. If Paul Ryan gets his way, Medicare will be turned into “Coupon Care” and seniors will be given vouchers to fend for themselves in the private insurance market. Thirty million Americans could lose health insurance (including a disproportionate number in areas that Trump won in November) if the Affordable Care Act is repealed (not to mention the lost improvements to Medicare included in the ACA). Americans who depend on any of these programs could sink into poverty.
Working Americans, the disabled, seniors, and their families should know what’s at stake – and they must participate in the movement to stop Republicans from snatching away their earned benefits and health care. The National Committee will vigorously lobby members of Congress, gather millions of petition signatures, and encourage working Americans to contact their elected representatives about these critical issues. We will partner with our allies to promote an agenda that protects – and boosts – our earned benefits instead of slashing them. So, by all means enjoy the holidays and ring in a peaceful New Year. Then… let’s shift gears into battle mode and stop the war on the working class together.
The National Committee to Preserve Social Security and Medicare participated today in the delivery of over 1,000,000 petition signatures demanding that Congress “keep its hands off of Medicare.” National Committee President and CEO Max Richtman joined Senators Chuck Schumer and Bernie Sanders, House Minority Leader Nancy Pelosi, and Democratic Reps.Ted Deutch, Jan Schakowsky, and Tony Cárdenas in presenting the petitions on Capitol Hill this morning.
Calling GOP plans to privatize a program that 53 million Americans depend on the “War on Medicare,” Richtman warned, “We are going to hear that Medicare needs to be ‘modernized.’ Modernization is a good thing if you are remodeling a kitchen... but not for Medicare.”
The petitions were delivered to the offices of Senate Majority Leader Mitch McConnell and House Speaker Paul Ryan, who wants to privatize Medicare by replacing guaranteed benefits with vouchers. Ryan’s “coupon care” program will result in benefit cuts and higher out of pocket costs for seniors. Equally alarming is President-elect Trump’s pick of a diehard privatizer, Rep. Tom Price, for Health & Human Services Secretary. Richtman summarized the GOP’s message to seniors on Medicare and their families, “You are going to be on your own and good luck… and I’m not even sure about the good luck part.”
Senator Sanders delivered an impassioned message to President-elect Trump, who promised during the campaign not to touch Social Security and Medicare. “Mr. Trump,” he thundered, “We are going to hold you accountable. Millions of us are going to demand that you keep your promise.”
Members of the National Committee’s Capital Action Team came to Capitol Hill in their bright yellow t-shirts to drive home the message that every day Americans won’t tolerate Ryan and Price’s efforts to destroy Medicare.
Richtman handed out red boxing gloves to Reps. Pelosi, Schakowsky and Deutch symbolizing advocates' readiness to take on lawmakers who try to wreck Medicare. He ended the petition delivery event with a strong call to arms. "Now, let's all get to work and win this war."
A National Committee on-line petition drive is underway to continue building a wall of public opposition to any proposals to cut Medicare.
House Speaker Paul Ryan perpetuated dangerous falsehoods about Medicare on CBS “60 Minutes” Sunday night. In an interview with correspondent Scott Pelley, Ryan hauled out the myth that “Medicare goes bankrupt in about 10 years.” He continued, “The trust fund runs out of money. So we have to make sure that we shore this program up.” Really?
To Ryan, “shoring up” Medicare means privatizing it, creating what we at the National Committee call “coupon care.” Seniors would have to fend for themselves in the private insurance market with government-provided vouchers that wouldn’t fully cover their premiums or out-of-pocket costs. Traditional Medicare would be left to wither and die.
Ryan’s plan is based on a fake crisis. Contrary to the Speaker’s claims on “60 Minutes,” Medicare does not go bankrupt in 10 years. It’s true that – without increasing payroll taxes – the Medicare Hospital Trust fund (which finances Medicare Part A) will become depleted in 2028. However, as the Center for Budget and Policy Priorities (CBPP) points out, “incoming payroll taxes and other revenue will still cover 87% of Medicare hospital insurance costs.” That’s a far cry from bankruptcy, Mr. Ryan.
Any shortfalls, CBPP notes, could be covered by “raising revenues, slowing the growth in costs, or most likely both,” without wrecking traditional Medicare - options that Ryan doesn’t seem inclined to consider.
The other fiction that Ryan perpetrates in his “60 Minutes” appearance is that his Medicare “reforms” wouldn’t “change the benefit” for anybody who is in or near retirement – only Gen X’ers (like Ryan himself) and subsequent generations. This is simply untrue. Our own analysis at NCPSSM indicates that privatizing Medicare could adversely impact anyone 55 and older (including people currently enrolled in traditional Medicare) because of potentially higher premiums, benefit cuts, and higher out-of-pockets. Neither seniors nor their children and grandchildren should believe Ryan’s false assurances. There is simply too much at stake.
Well, that didn’t take long. Just days after the election and already the GOP has confirmed, what we’ve been warning for months. Destroying traditional Medicare in favor of a privatized CouponCare system is at the top of the Republican agenda. In fact, they want it to happen as soon as next year.
“Below is a transcript of what Ryan said on Fox's Special Report, along with a flat out false statement suggesting that Obamacare has weakened Medicare's finances.
BRET BAIER: Your solution has always been to put things together including entitlement reform. That is Paul Ryan's plan. That's not Donald Trump's plan.
PAUL RYAN: Well, you have to remember, when Obamacare became Obamacare, Obamacare rewrote Medicare, rewrote Medicaid. If you are going to repeal and replace Obamacare, you have to address those issues as well. What a lot of folks don't realize is this 21-person board called the ipap is about to kick in with price controls on Medicare. What people don't realize is because of Obamacare, Medicare is going broke, Medicare is going to have price controls because of Obamacare, Medicaid is in fiscal straits. You have to deal with those issues if you are going to repeal and replace Obamacare. Medicare has serious problems [because of] Obamacare. Those are part of our plan.” ...Talking Points Memo
Let’s be crystal clear about this – without Obamacare, Medicare’s Part A trust fund would have faced insolvency now. Instead, because of the cost savings in the Affordable Care Act, including; trimming the billions in government subsidies going to the insurance industry in Medicare Advantage and productivity adjustments to how Medicare pays providers the program gained more than a decade of solvency.
“The net result was that the “insolvency” date was extended by 12 years. Before the law was passed, the trustees said in 2009, the fund was going to be depleted in 2017. “The short-range financial outlook for the HI [hospital insurance] trust fund is substantially more favorable than projected in last year’s annual report, primarily as a result of the Affordable Care Act,” the Medicare trustees said in their 2010 report, saying the fund would last until 2029.”...Washington Post
Fact checkers appropriately gave Speaker Ryan Four Pinnochios for this obvious lie:
“Medicare certainly faces financial stress as the baby-boom generation begins to retire in full force, but it’s important to get the facts straight. It’s bad enough that Ryan, like many politicians, uses imprecise rhetoric such as “broke”; that’s a Two-Pinocchio violation. But the House speaker really went off the rails when he said on national television that Obamacare is making the program go broke. That’s the exact opposite of what happened.”
As we’ve said here before, repeal of the ACA will have an immediate impact on seniors. While Republicans continue their cynical promise that “reforms” won’t touch current seniors (because they believe America’s “greedy geezers” only care about their own benefits and don’t care about what happens to their children and grandchildren) the truth is, repealing Obamacare hits millions of American seniors immediately and robs the Part A trust fund of more than a decade of solvency:
“Medicare’s financing challenges would be much greater without the health reform law (the Affordable Care Act, or ACA), which substantially improved the program’s financial outlook. Repealing the ACA, a course of action promoted by some who simultaneously claim that the program is approaching “bankruptcy,” would worsen Medicare’s financial situation.”... Center on Budget and Policy Priorities.
“The Affordable Care Act strengthens Medicare's financing by increasing efforts to reduce waste, fraud and abuse; slowing the rate of increase in payments to providers; improving quality of care and phasing out overpayments to private Medicare Advantage plans, plans that are continuing to increase their enrollments each year. The impact of these provisions has already resulted in extending the solvency of the Medicare Part A Trust Fund by more than a decade and lowering Part B out-of-pocket costs for beneficiaries.
In addition to Medicare beneficiaries, the Affordable Care Act is very important to millions of adults ages 50-64 who are uninsured because they do not have access to affordable private insurance. Many of these individuals are now able to purchase private insurance even if they have pre-existing medical conditions, and costs are more affordable due to the law's limits on age rating and the subsidies available for lower-income beneficiaries.
The number of uninsured “young seniors,” aged 50-64, would increase, leaving them in poorer health by the time they are eligible for Medicare – thereby increasing Medicare’s costs.”...NCPSSM, 2015 ACA Repeal Letter to Congress
And all of this only addresses the clearly false assertion made by Speaker Ryan that Medicare is going “bankrupt” and that Obamacare is the reason. What is equally important for seniors to understand is what Ryan’s CouponCare plan actually means for them. We’ll address that more completely in a future post but as a reminder: the Ryan plan will end traditional Medicare, privatizing it, while raising seniors’ costs. Under CouponCare seniors pay more for less coverage.
The GOP’s voucher plan works this way:
• Rather than you going to your doctor and Medicare pays the bill, under CouponCare the federal government will give you a voucher each year that you will then use to go out and buy private insurance out in the open market or to pay for Medicare.
• However, those coupons’ values are based on the cost of Medicare in a particular community or the second lowest private health insurance plan, whichever is cheaper. So if, you choose to stay in traditional Medicare, and it costs more than virtually the cheapest plan out there, you’ll pay more. Let’s be really clear, vouchers are designed to shift costs to seniors. That’s how the government saves money.
The Kaiser Family Foundation estimates 59% of seniors would have to pay higher premiums in order to receive the same Medicare plans they now have, with the average premium increase coming in at $107 per month, they didn’t even look at co-pays and out-of-pocket costs.
The Congressional Budget Office looked at this in 2011 and said it would double beneficiaries’ costs.
After George Bush won re-election in 2004 and the Republicans controlled Congress, privatizing Social Security was the first order of business. Here were go again -- but this time your Medicare is the target. The American people don’t support privatizing Medicare; however, it has long been the goal of conservatives who believe seniors should be forced back into a private insurance marketplace which history has proven, over and over again, they simply can’t afford.
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