More Proof that “Deficit Reduction” is Really Just Code for Social Security & Medicare Cuts

Posted @ 5/15/2013 12:05 PM By NCPSSM

The Congressional Budget Office’s new budget projections show that despite the sky-is-falling crisis calls made by Wall Street backed austerity fanatics like: Fix The Debt, Bowles-Simpson and the rest of the Pete Peterson funded anti-Social Security brigade, our deficit is now the smallest it's been since 2008.  And that’s without the so-called “Grand Bargain” this billion dollar lobby claims is absolutely necessary for our nation’s survival. The Daily Intelligencer explains:

It's hard not to see the CBO's projections as the latest in a long series of demoralizing developments for the Simpson-Bowles-led deficit scold movement. Overall, the CBO says that barring unforeseen policy changes, the deficit will shrink to 2.1 percent of GDP in 2015. That's better than the 2.3 percent target Simpson and Bowles originally set out in their 2010 report. And it will happen even without the grand bargain they've so desperately sought.

Neither is the federal debt piling up to unsustainable levels. As the CBO's chart shows, the debt-to-GDP ratio is now projected to peak in 2014 at 76.2 percent, before falling to 70.8 percent in 2018. That's a long way from the now-discredited 90 percent threshold budget scolds have used to scare policymakers, and the projections —combined with record-low interest rates and eerily calm bond markets — should put our concerns about an immediate debt crisis to rest.

Now, it’s really hard to keep a crisis mentality ginned up if the facts keep getting in the way (see also the Reinhart Rogoff debacle). So, as expected, the Wall Streeters have chosen just to ignore what doesn’t fit their frame:   

The Campaign to Fix the Debt, which marshals corporate resources to lobby for deficit reduction, said that "the rosier-than-expected near-term projections do not change the fact that rising health care costs, an aging population, Social Security’s looming insolvency, and ever-increasing interest payments will greatly expand the national debt as a share of the economy starting at the end of the current decade."  The Hill Newspaper

Again, the true challenge facing this nation is health care costs.  Reforms through the Affordable Care Act have helped reduce the deficit and  system-wide reforms need to continue, not just in Medicare. Talking about Social Security and Medicare, as if they’re the same program, is a favored ploy of these Wall Streeters; however, it conveniently ignores the fact that there is $2.7 trillion currently in the Social Security trust fund and that figure keeps growing. Economist Jared Bernstein offers some too-little-heard fact-based analysis:

Longer term, even with the recent improvement in the pace of health care costs, we still face pressure from the intersection of our aging demographics and health care spending.  To bend those curves at the end of the figure, we’ll need to keep up the pressure on health costs as well as boost our revenues.  Cuts alone won’t do it.

It would be nice if policy makers looked at the figure below and recognized that we need less austerity now and more health savings/revs later.  But that would mean spraying water on their flaming heads, and that can be kind of uncomfortable.

When is a Medicare Cut Not a Cut? When You’re One of the Nation’s Biggest Lobbyists – Health Insurance Companies

Posted @ 4/4/2013 2:49 PM By NCPSSM

The news back in February that private insurers in Medicare would receive a 2.2% rate cut in 2014 sent their lobbyists into overdrive, flooding the halls of Congress and the media with ads bemoaning the reduction in their billions of dollars of federal overpayments.  Historically, private insurers providing Medicare Advantage coverage have collected 13% more from the federal government to provide private MA coverage than it costs to cover seniors in traditional Medicare.  Over the years this massive government subsidy to private for-profit insurers has cost Medicare millions of dollars, so the Obama administration correctly trimmed back those wasteful overpayments as part of the Affordable Care Act, helping to add 8 years of solvency to the program. 

Incredibly the news this week is that the Obama administration has now caved to the insurance industry’s lobbying blitz and Congressional pressure and will not only reverse the 2014 Medicare Advantage cuts but will also give for-profit insurers a 3% raise.  No surprisingly, this is a move that CMS actuaries (the non-politicians actually paid to do this job) opposed:

“The actuaries in charge of the calculation made clear that they did not endorse the change. The official notice, signed by Jonathan Blum, director of Medicare at CMS, and Paul Spitalnic, the chief actuary in charge of the formula, said that the change had come at the behest of HHS Secretary Kathleen Sebelius.”  National Journal

“It’s about the best possible result for Medicare Advantage plans,” said Ipsita Smolinski, managing director at Capitol Street, a health care consulting firm.” Politico

Sure, it’s good news for the nation’s $884 billion dollar a year health insurance industry but what about Medicare? Not so much.  While Medicare Advantage over-payments will still face future reductions thanks to health care reform, this is the classic case of political “If You Give a Mouse a Cookie.”  Will those common sense reductions survive another AHIP lobbying onslaught? It’s also important to note that many of the same members of Congress who have decried Medicare spending and support more means testing, benefits cuts and more for seniors -- all in the name of deficit reduction --  lobbied the hardest to ensure the health insurance industry keeps their government subsidies.  These are subsidies that all seniors, whether they are in a Medicare Advantage plan or not, pay for with higher premiums while also burdening the Medicare program overall. 

For comparison, let’s juxtaposition Congress’ rapid response this week to the insurance lobby’s pressure to keep their goodies with the inaction we’ve seen over months leading to across the board budget cuts in the ongoing sequester.  Budget cuts that are impacting average Americans, not huge for-profit industries.

The Washington Post reports today that the sequester has lead to thousands of Medicare cancer patients being turned away from cancer clinics who can’t afford the 2% sequester cut for drugs needed to treat their Medicare patients.

Cancer clinics across the country have begun turning away thousands of Medicare patients, blaming the sequester budget cuts. Oncologists say the reduced funding, which took effect for Medicare on April 1, makes it impossible to administer expensive chemotherapy drugs while staying afloat financially.

Patients at these clinics would need to seek treatment elsewhere, such as at hospitals that might not have the capacity to accommodate them. “If we treated the patients receiving the most expensive drugs, we’d be out of business in six months to a year,” said Jeff Vacirca, chief executive of North Shore Hematology Oncology Associates in New York. “The drugs we’re going to lose money on we’re not going to administer right now. After an emergency meeting Tuesday, Vacirca’s clinics decided that they would no longer see one-third of their 16,000 Medicare patients. “A lot of us are in disbelief that this is happening,” he said. “It’s a choice between seeing these patients and staying in business.”

Cancer providers have also been lobbying Congress asking for a sequester waiver for cancer drugs so that they can continue providing their life-saving care.  Washington certainly rallied quickly to reinstate massively wasteful government subsidies to one of our nation’s largest industries...yet so far, no response to those who literally control the life and death of thousands of cancer patients in Medicare.

The National Committee: Our Story

Posted @ 3/15/2013 1:37 PM By NCPSSM

As the battle to cut Social Security, Medicare and Medicaid benefits wages on we thought we’d go into the weekend on a happier note rather than providing the usual Capital Hill war stories and political intrigues.   Here is a quick video we produced to give our community a look at the work the National Committee does here in Washington, D.C. each and every day.  We’ve been fighting to strengthen the nation's most successful retirement and health care programs for 30 years now. 

Our mission has always been to educate, advocate and mobilize. These days, that’s been quite a challenge.  However, thanks to our millions of members and supporters we have been successful in fighting efforts to destroy or privatize these programs. 

So, this is our story...and yours.

GOP Budget Plan Released Today–Seniors Say Three Strikes – You’re OUT

Posted @ 3/12/2013 1:01 PM By NCPSSM

Today’s release of the GOP/Ryan budget reminds us of the famous line, “the definition of insanity is doing the same thing over and over again and expecting different results.”  Today marks the third time House Republicans have released the Ryan budget, which in Rep. Paul Ryan’s Orwellian terms he’s also named a “Path to Prosperity.” Thankfully the result again this year will likely be the same.  Dead on arrival. We say thankfully because, once again, this budget pretends deficit reduction alone is economic recovery, while ignoring the financial realities millions of America’s middle-class families still face in this slow economy.  This plan also targets seniors in Medicaid with cuts, a “coupon care” plan for Medicare which would ultimately end traditional Medicare, and a fast-track plan to cut Social Security benefits:   

“Once again, House Republicans have re-introduced the same flawed budget approach middle-class Americans have rejected in poll after poll and most importantly at the ballot box. Rather than deal with the true challenges facing this nation including, slow economic growth, high unemployment, and unprecedented income inequality, the GOP/Ryan budget targets middle-class seniors and their families with massive cuts to pay for tax cuts benefiting huge corporations and the wealthiest among us.  Americans want a balanced approach to the national budget.  This cuts-only plan isn’t it.   

The Ryan plan would create vouchers in Medicare leaving seniors and the disabled – some of our most vulnerable Americans – hostage to the whims of private insurance companies.  Over time, this will end traditional Medicare and make it harder for seniors to choose their own doctor.  Vouchers are designed not to keep up with the increasing cost of health insurance… that is why they save money.  If the GOP/Ryan budget becomes law, seniors would immediately lose billions in prescription drug savings, free wellness visits and preventative services provided in the ACA, and the Part D donut hole returns.

Destroying traditional Medicare and leaving millions of Americans without adequate health coverage is not a path to prosperity for anyone except for-profit insurers. The American people understand that.”  Max Richtman, NCPSSM President/CEO

Senate Democrats have also prepared their budget plan which will be released tomorrow. According to Huffington Post, the Democratic Budget plan: 

“... calls for $975 billion in additional revenues through closing loopholes and ending tax expenditures. The budget, unlike Ryan's, doesn't close the door on going beyond the fiscal cliff deal either; it calls for the continuation of current tax rates for middle and lower class Americans but does not specify whether current rates should be protected for high-end earners.

“While House Republicans are doubling down on the extreme budget that the American people already rejected, Senate Democrats are going to be working on a responsible budget that puts jobs and the economy first and reflects the values and priorities of middle class families across the country,” read a statement from Murray.

A top Senate Democratic aide said that the specifics -- including where rates should be set, which loopholes should be closed, and which expenditures should be ended -- would be left to the Senate Finance Committee. The Murray budget does give the Finance Committee some help, though, offering parliamentary instructions (known as reconciliation) to help ensure the tax reform bill it produces will be granted an up-or-down vote.

While the $975 billion figure is ambitious, the Senate aide pointed to a report by the Center for American Progress that showed $1 trillion in savings could be gained through "reducing or reforming tax breaks."

On the spending side, Murray's budget looks for $493 billion in domestic cuts, $275 billion of which will come from health care savings. The aide said that those health care savings, which will also be determined by the Finance Committee, would be felt solely on the provider side and not among beneficiaries. Additionally, the budget calls for $240 billion in defense spending cuts and $242 billion in reduced interest payments.

Those savings in total will replace the sequestration-related cuts that went into effect on March 1. Over a ten-year window, they will reduce the deficit by $1.95 trillion. But since Murray's budget also sets aside $100 billion for economic stimulus measures -- $50 billion on repairing highest transportation priorities, $10 billion on projects of major regional importance and the rest on other items like worker training -- the total savings will be measured at $1.85 trillion.”

These budgets clearly lay out starkly different priority choices.  Especially for middle-class families and retirees who understand first hand the value of programs like Social Security, Medicare and Medicaid, and who want those programs preserved for future generations.  

America's Wealth Divide Continues: Cutting Social Security & Medicare Will Make it Even Worse

Posted @ 2/28/2013 8:47 AM By NCPSSM

It's easy in this era of Washington deficit mania to focus solely on the numbers on a budget spreadsheet while losing sight of the fact that the austerity agenda pushed by those least likely to be impacted by their policies will have serious implications for America's middle class families.  This is especially true for those already struggling in this economic slowdown, especially communities of color. We've talked about this a lot during February's Black History month coverage and NCPSSM will continue to address these issues throughout the ongoing budget and deficit debate. In case you missed it, here's a wrap up of some of our February coverage: