Washington Makes It Clear: Medicare Will Now Be Targeted to Pay Down Deficit

“Official Washington was in celebration mode on New Year’s Day after kind of averting a completely unnecessary crisis that was entirely of its own creation.”  The Borowitz Report

This was our favorite headline from the hundreds of stories flooding our email boxes during the holiday “fiscal cliff” debate. The fact that it’s satire really doesn’t diminish the underlying message. Crisis creation seems to be what Washington does best these days.  Even so, there was good news in this deal for seniors including: the end of the Social Security payroll tax holiday (which should never have been implemented in the first place), a one year doc fix preventing a massive cut in doctors’ Medicare reimbursements and extension of a number of Medicare programs that would have expired December 31^st.

So while America’s seniors can breathe a sigh of relief that Congress finally came to its senses and removed benefit cuts for millions of middle-class and poor Americans from the fiscal cliff deal, that relief will be short-lived. Tomorrow, with the swearing-in of a new Congress, the assault on Social Security and Medicare begins all over again.

“Despite the lawmakers' claims that the debate has been about closing the federal deficit and reducing the federal debt, none of the negotiating over the past weeks has dealt with those issues. Indeed, the tax and spending package will widen the deficit by some $4 trillion over 10 years, compared with what would happen if the tax increases and spending cuts mandated by existing law were implemented.

The House Republican caucus has consistently looked for ways to protect high-income taxpayers from a tax increase, at the expense of beneficiaries of government programs such as enrollees in Social Security and Medicare. If there's a dominant preoccupation with cutting the deficit lurking somewhere in that mind-set, good luck finding it.”

The Huffington Post describes what’s coming next: 

“The fiscal cliff has not been averted. If anything, the U.S. faces an even more ominous deadline in a few months. The debt ceiling was hit as of New Year's Eve. The U.S. Treasury will dip into its tool bag to keep the country's borrowing ability going, but that will last only about two months. Also in early March, the sequestration -- $110 billion in across-the-board spending cuts, half in defense and half in domestic programs -- springs back, unless Congress finds a way to offset it with other spending cuts. Weeks later, the law that keeps the government funded expires. It all means that, in late February and early March, Congress will face a sequestration, a government default and a government shutdown. Republicans say they'll use the leverage created by the debt ceiling to force Obama to accept spending cuts, particularly in entitlement programs. Obama resisted that notion on Dec. 31, saying he wants more tax increases and won't accept Republican plans to "shove" spending cuts past him. "If they think that's going to be the formula for how we solve this thing, then they've got another thing coming," he said.

However, once the fiscal cliff deal passed, the President’s message changed making it clear cuts to Medicare will be offered up to pay down the deficit:

“I agree with Democrats and Republicans that the aging population and the rising cost of health care makes Medicare the biggest contributor to our deficit. I believe we've got to find ways to reform that program without hurting seniors who count on it to survive. And I believe that there’s further unnecessary spending in government that we can eliminate.” President Obama statement, January 1

There are ways to make Medicare more efficient and save money, in fact, many of those ideas were already implemented in the Affordable Care Act.  Going forward Congress should also consider allowing Medicare to negotiate with drug makers for lower prescription drug costs in Part D and allowing drug re-importation which would save billions in the Medicare program. Unfortunately, both of these common sense proposals are opposed by conservatives, many of the same fiscal hawks, who’d rather reduce spending by cutting benefits instead of curtailing the excessive payments to the highly profitable pharmaceutical industry. 

Winning the fiscal cliff battle is clearly just the first step in ensuring America’s seniors don’t lose the war about to begin in earnest against the nation’s vital safety net programs --Medicare, Medicaid and Social Security.