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From the monthly archives: June 2011

We are pleased to present below all posts archived in 'June 2011'. If you still can't find what you are looking for, try using the search box.

Coburn/Lieberman Medicare Plan: Make Seniors Wait Even Longer for Coverage and Then Charge Them More

The ongoing quest to balance the budget on the backs of America’s seniors continues with the latest Medicare plan offered by Senator Joe Lieberman and Senator Tom Coburn (who left the Gang of 6 negotiations because that bipartisan group wouldn’t slash seniors’ programs enough).  Rather than reigning in the skyrocketing costs of healthcare system wide (not just in Medicare), increasing efficiencies or even rooting out inefficiencies this plan puts the burden of a nationwide healthcare crisis directly on America’s seniors:  “Most of the plan's savings would come from some form of benefit reductions or cost-shifting to seniors — a stark contrast to the Medicare cuts believed to be on the table in talks over the debt ceiling. Negotiators there are looking at cuts to healthcare industries after Democrats drew a line in the sand over benefit cuts. But Lieberman and Coburn's proposal includes several politically risky benefit changes, such as making seniors pay more for their prescription drugs. It also would raise the eligibility age for Medicare. The proposal would cap seniors' out-of-pocket costs depending on their income. The maximum would be set at $7,500 for people making less than $85,000 per year. Seniors with twice as much income would pay three times more in out-of-pocket Medicare costs. Seniors also would pay more for their prescription drugs. Premiums only cover about 11 percent of the total costs for Medicare Part D, the senators said. They would require seniors to pay the full cost of their drug coverage. They said the change would free up between $5 billion and $10 billion in tax money. The plan also would increase premiums for Medicare Part B, which covers drugs that are administered by a doctor. Part B premiums are more than $400 per year, and taxes currently cover only about a quarter of that cost. High-income seniors would have to pay the full cost of their Part B premiums under the Lieberman plan.”  The Hill Not so surprisingly, this proposal is all pain for seniors with absolutely no attempt to raise revenues.   “Lieberman gave up an income tax hike that he previously said would be part of his proposal.  ‘The sooner you take the strong medicine, the sooner you will get healthy again,’ [he] said.” In other words, America’s seniors must continue to take Washington’s version of “strong medicine” so the nation’s largest corporations and wealthiest citizens can continue to stay healthy.

Some in Washington think a Zero COLA is too Generous

For the millions of seniors who rely on Social Security, the cost of living adjustments aren’t used to purchase cruise vacations on the Caribbean or extra cable shows. Social Security's Cost-of-Living Adjustment (COLA) is designed to help beneficiaries keep up with the constantly rising cost of living during retirement. COLAs help seniors purchase food, medicine and pay their heating and utility bills. The current CPI-W COLA formula, while helpful, does not come close to staying in line with the skyrocketing cost of health care which eats up a significant portion of every retiree's benefit.  Yet, despite the fact that the average senior spends 27% of his or her benefit on Medicare Parts B & D out-of-pocket costs alone, some in Congress are proposing cutting the COLA beginning January 2012 by moving to a chained-CPI formula. As a result of the recession, the past two years have yielded a zero COLA for the first time in the history of the automatic system.  And although the Trustees are predicting a small COLA for 2012, for most beneficiaries the additional money will almost entirely go to cover the increase in their Medicare premiums. It’s not clear to us at the National Committee how a zero COLA has been overly “generous.” Rep. Xavier Becerra (D-CA), recently released new analysis which provides some startling numbers to this chained-CPI proposal.
"Switching to a chained-CPI will permanently cut COLAs for generations of retirees and the disabled - making it harder and harder for them to make ends meet.  For the first time, the new analysis released by Rep. Becerra puts a number behind the policy - over time the annual benefit cut will total almost $1,400. We at the National Committee agree it is critical that the COLA be calculated based on an accurate formula.  But if accuracy is really the goal, Congress should change the COLA formula to factor in the large health care expenses most seniors face." Max Richtman , Executive Vice President/Acting CEO
In deficit reduction talks, many in Congress claim cuts they’re considering won’t affect current seniors. That couldn’t be further from the truth.
"Proponents of cutting Social Security have repeatedly pledged that current retirees would not be affected by any of the changes they are considering.  Yet their chained-CPI formula, which we hear is still 'on the table' in deficit reduction costs, will cut benefits for every single Social Security beneficiary beginning next January." Max Richtman
The National Committee supports calculating the COLA by using the CPI-E, an index reflecting greater accuracy of retiree's spending priorities that has been undergoing testing by the Bureau of Labor Statistics for decades.

Let’s Make a Deal – AARP Style

Today’s Wall Street Journal coverage of AARP’s support of Social Security benefit cuts certainly got everyone’s attention.  While AARP spent most of the morning trying to “clarify” its position, with tweets every minute for most of the morning, and eventually a follow-up statement from its CEO,  it’s clear AARP has once again chosen to offer up vital safety net programs to the altar of insider Washington politics. In short, AARP says Social Security should not be a part of the budget conversation. So we ask…Why suggest benefit cuts now…during one of the most intense budget debates of our lifetime?   They say they’ll also hold town hall meetings to “educate” Americans about AARP’s vision for Social Security.  Again, if benefit cuts should not be a part of the budget debate (and they shouldn’t) then why is AARP working so hard to try and sell these benefit cuts to an unsupportive membership now?   AARP’s John Rother says:
 “I’m sure there will be some who will not be happy, but others will be eager to see the program put on a stronger footing financial for the long-term.”  
But benefit cuts are not the only way to put Social Security on stronger footing. Perhaps, most disconcerting is how closely AARP’s language mirrors the anti-Social Security approach promoted by the Cato institute after the last reforms in 1983 and perpetuated by President Bush in his campaign for private accounts.  That strategy says policymakers should ensure current seniors know the cuts won’t affect them to garner their support:
 “It has also been a long held position that any changes would be phased in slowly, over time, and would not affect any current or near term beneficiaries.” AARP CEO, Barry Rand
Advocates representing millions of American seniors nationwide, including the National Committee, joined together this morning in a news conference call to remind reporters that AARP does not represent the views of most Americans.  Here is Max Richtman, NCPSSM Executive VP/Acting CEO’s full statement:  
“While AARP is among the nation’s largest lobbyists…it clearly does not speak for all of America’s seniors.  Seniors of all political persuasions, and even voters across all age groups, do not support cutting Social Security benefits.  Poll after poll, (including AARP’s own polling) show that seniors know Social Security didn’t cause this fiscal crisis, shouldn’t be included in the current budget debate and that there are other ways to resolve our economic woes without cutting benefits to millions of Americans. Suggesting now, given the current anti-Social Security environment in Washington, that seniors’ benefits should be cut is not a view shared by any other major seniors’ organization because it’s just not good policy. We don’t need to be squishy on this issue or equivocate, flip-flop or try to have it all ways…let me say clearly…we at the National Committee do not support cutting Social Security benefits.  Timing is everything in politics and no one in Washington now is really talking about providing long-term solvency issues for Social Security…they’re looking at ways to avoid paying back what’s owed to the trust fund and ways to cut spending.  Addressing Social Security as part of a budget deal has absolutely nothing to do with long-term solvency.   The National Committee has always said we need to find long-term solvency solutions to preserve Social Security for future generations…and those solutions aren’t really a surprise to anyone.  The need to make adjustments before the year 2036 isn’t news or position unique to AARP.  We all know, modest and manageable changes will bring Social Security where it needs to be for 75 more years; however, THAT is not what is being debated now.  Not a single seniors’ group, contrary to claims by Washington’s fiscal hawks, have ever argued that we should do “nothing” or “ignore” the fiscal facts; however, that has absolutely nothing to do with the current budget debate engulfing Washington.   Offering up Social Security benefit cuts, to gain access to closed door discussions, where Let’s Make a Deal politics has become the norm is not the way to address strengthening a program which touches the lives of virtually every American family.  AARP clearly hopes to continue to position itself as the representative of Americans seniors in Washington.  They say they want to captain the ship in this Social Security debate.  The problem is their policy ship is the Titanic and America’s seniors shouldn’t be forced to go down with it…with AARP at the wheel.   The National Committee takes our position as a membership organization very seriously…we will always advocate for positions that best serve the programs we fight to preserve and strengthen because they are literally lifelines for millions of Americans. The debate about preserving Social Security over the long-term has absolutely nothing to do with the budget debate…period. “

Why Killing Medicare to "Save" it Doesn't Make Any Sense

This Month's Networth Award goes to Bob Creamer

It's clear the GOP talking points on Medicare have gone out and rely on the same  tired strategy used during the Bush privatization campaign against Social Security--which goes something like this: Destroying the program is the only way to fix it and anyone who disagrees just wants to "do nothing".   Obviously,  there's a big wide area of options between doing nothing and destroying Medicare, how about reigning in healthcare costs for example?    Of course,  debating real solutions is always  much more difficult than demagoguery.  Kudos to Bob Creamer for his analysis of this Medicare propaganda.  

Republicans Claim That We Must Destroy Medicare to Save It

Huffington Post, June 14th People like me who came of political age in the 1960's will never forget the absurd statement from an American General, that we had to destroy a Vietnamese village in order to save it. That Orwellian proposition came to symbolize the essence of the progressive case against the Vietnam War. In 2011 the Republican proposal to end Medicare in order to "save it" may have the same iconic power to lay bare the true goals of the GOP's political and economic philosophy. The Republicans argue that if Medicare costs continue to rise at their current rate, the program will "go bankrupt" in a little over a decade. Their solution is to end Medicare and replace it with a plan where the taxpayers give insurance companies vouchers to cover an ever-shrinking share of insurance premiums for retirees and the disabled. Their proposal does nothing -- zero -- to address the escalating costs of health care that are driving the increased Medicare costs -- and all health care spending. In fact it actually increases those costs. Instead, it simply shifts those costs from the government onto each individual retiree. In fact, the CBO estimates that the average Medicare recipient will spend over $6,000 more on health care each year under the Republican plan than they would under Medicare. The fact is that the Republicans aren't even trying to control skyrocketing health care costs. Instead they intend to create a new -- non-Medicare -- program that will allow their large benefactors like the insurance and pharmaceutical companies -- to make huge sums of money from the taxpayers. Reining in health care costs is not an intractable problem. It is entirely possible to "bend the cost curve", but you have to be willing to stop the corporate feeding frenzy that lies at its root. The Republicans aren't. Actually controlling rising health care costs is last thing they want to do. Republican Members of Congress have voted down the line to repeal the Affordable Care Act (ACA) that eliminates half a trillion dollars of waste and corporate subsidy from Medicare without reducing benefits by a dime. And they voted to cut the many other provisions in the ACA that the Congressional Budget Office found would save hundreds of billions of dollars in wasted health care expenditures. Not only do Republicans oppose provisions that bring down costs. They actually owe their control of the House in considerable measure to their willingness to conflate reining in Medicare's underlying health care costs with cutting benefits. Last fall they shamelessly campaigned across the country against the Democrat's $500 billion "cuts" to Medicare -- implying that that would cut Medicare benefits -- when they knew full well that was not true. In fact these reductions in health care spending did not cut benefits at all and would extend the solvency of Medicare (the real Medicare) well into the future. It is critical in the upcoming debate over the deficit that Democrats refuse to allow the GOP to once again intentionally distort the fundamental difference between reining in the underlying costs of Medicare and cutting Medicare benefits. Democrats and Progressives strongly favor reining in the growth of health care costs -- including the underlying costs of Medicare. We completely reject cuts in Medicare benefits. Reining in costs does not involve cutting benefits -- it actually helps make sure that we don't cut benefits. And, in fact, while cutting benefits may reduce government spending, it would actually increase America's overall spending on health care. By eliminating Medicare, the GOP not only fails to do anything to contain rising health care costs -- their plan actually makes matters worse. The record shows that Medicare program is a great deal more efficient at delivering health care -- and controlling provider costs -- than private insurance companies. Only about six cents in every dollar goes to pay for administrative costs of the Medicare system. From $.25 to $.30 of each premium dollar goes to pay for administrative, overhead and profit of private insurance companies. Private insurance companies pay for a lot of things that a public program like Medicare does not -- like marketing and sales, armies of bureaucrats that spend all their time denying claims, and the profits they hand over to Wall Street bankers and corporate CEO's. And private insurance companies -- big as they are -- don't have the juice Medicare does to rein in the fees of medical providers. All of that is why -- while Medicare costs escalated 400% from 1969 to 2009 -- there was a 700% increase in insurance rates charged by private insurance companies. If you throw people out of Medicare's public insurance pool and force them to buy insurance from private insurance companies, the cost of providing health care to seniors and the disabled will skyrocket -- a fact confirmed by the non-partisan Congressional Budget Office. The Republican budget plan actually increases the overall costs of delivering health care to seniors and the disabled, and it simultaneously shifts a greater percentage of those costs to individuals and their families. In other words, it is hard to imagine how the Republican plan could be much worse -- unless, of course, you're a private insurance company. Just look at the now-infamous "Medicare Advantage" program where private insurance companies convinced Congress to let them provide care to Medicare recipients -- on the public dime -- because they said the "competition" would bring down cost. Turned out just the opposite was true. "Medicare Advantage" plans required a huge public subsidy compared with traditional Medicare. The Affordable Care Act eliminated those subsidies and that's precisely one of the reasons that it brings down the cost of Medicare. But, of course, the Republicans want to restore the "Medicare Advantage" subsidies by repealing the Affordable Care Act -- and ultimately eliminate Medicare entirely and replace it with a private "Medicare Advantage" on steroids. There are many ways to control Medicare costs without cutting benefits. For one thing, we could allow Medicare to negotiate with pharmaceutical companies to bring down the costs of prescription drugs. Medicare is currently banned from negotiating the lowest prices for drugs in order to protect the profit margins of Big Pharma. The Veterans Administration has been negotiating these prices for some time and if Medicare received comparable savings, it would save the taxpayers about a quarter trillion dollars over the next decade. That's a quarter-trillion dollars being siphoned out of the Medicare program that does nothing to add to the quality of the health care provided to older Americans. Its purpose is to provide a taxpayer subsidy for the big pharmaceutical companies. So the Republicans want to force retirees to pay an additional $6,000 per year for health care, but at the same time they want to allow the drug companies to continue receiving a quarter-trillion-dollar subsidy out of the public purse. Unbelievable. Finally, of course, the Republican budget takes the savings to the government that results by slashing Medicare benefits and hands that to the wealthiest Americans in the form of yet another tax break. In other words the Republicans want to abolish Medicare in order to give tax breaks to the rich -- and they want to abolish Medicare to allow private insurance and pharmaceutical companies to make more money. That's the long and short of it. Of course Republicans claim they aren't "abolishing" Medicare -- they're just "restructuring" Medicare. I admit that a jellyfish and an elephant have some things in common. Both, after all, are composed of living tissue. But a jellyfish is not an elephant. Medicare and the Republican plan to provide partial support for private health insurance premiums are both health insurance programs. You can call it Partial Care, or Sort'a Care, or Maybe Care, or Private Care, or We-Don't Care -- but the Republican plan is not Medicare. It eliminates the essence of what people call Medicare: the public health insurance program that provides guaranteed benefits that most people in America love. In last weekend's New York Times, a story appeared about a growing industry that provides very high-end -- super well-trained guard dogs to the wealthy -- for $230,000 each. "When she costs $230,000, as Julia did," the Times reports, "the preferred title is 'executive protection dog.' This 3-year-old German Shepherd, who commutes by private jet between a Minnesota estate and a home in Arizona, belongs to a canine caste that combines exalted pedigree, child-friendly cuddliness and arm-lacerating ferocity." The Times says high-end dog training prices have "shot up thanks to the growing number of wealthy people around the world who like the security -- and status -- provided by a dog with the right credentials." Now I am a great dog fan. I recently spent thousands of dollars at the vet to keep our two golden retrievers healthy. But buying a dog for a quarter-million dollars is ridiculous. It's what very rich people do when they have money to burn. It's what they do with the massive amount of wealth that has been siphoned over the last decade out of the pockets of middle class people -- whose incomes have stagnated -- into the hands of the top one percent of the population. If you eliminate the Bush tax cuts for the wealthy and increase tax rates for millionaires and billionaires to levels no higher than they were when Ronald Reagan was president, you can make much of the federal budget deficit disappear over the next decade. So in the end the Medicare issue gets down to this: the Republicans want everyday senior citizens -- who have a median income of $19,000 per year -- to pay $6,000 more each year in health care costs, so that very rich people can afford their quarter-million dollar dogs. Robert Creamer is a long-time political organizer and strategist, and author of the book: Stand Up Straight: How Progressives Can Win, available on He is a partner in the firm Democracy Partners. Follow him on Twitter @rbcreamer.

Trading Social Security for Business Tax Cuts – Is This Really What Passes for Fiscal Responsibility These Days?

Bloomberg News is reporting that some White House advisors propose diverting even more payroll taxes from Social Security as a way to spur the economy.  A 2% employee payroll tax deduction was already included in the stimulus bill passed in December. That means $112 billion dollars will be diverted from Social Security this year alone.  Just six months ago the White House promised this approach was just temporary even though we all knew that, in this town, tax cuts are rarely reversed.  President Obama is now setting the table for extending some of those stimulus provisions.  Will that include the employee payroll tax diversion from Social Security…will the administration renege on their promise made just six months ago?
“Some of the steps that we took during the lame duck session, the payroll tax, the extension of unemployment insurance, the investment in -- or the tax breaks for business investment in plants and equipment -- all those things have helped.  And one of the things that I’m going to be interested in exploring with the members of both parties in Congress is how do we continue some of these policies to make sure that we get this recovery up and running in a robust way.”  President Barack Obama, Joint Press Conference
The administration may also now double-down and add even more payroll tax diversions from Social Security--this time for business stimulus.  Diverting revenue from Social Security to provide more employer tax breaks is not fiscal responsibility.  But it does pander to conservatives who get the tax cuts they crave, while simultaneously crippling Social Security’s funding stream and fueling the fiscal hawks Social Security crisis campaign.  For conservatives it’s a political winner, for millions of middle class Americans and their families it’s a fiscal failure:
“The talks reflect the political constraints the White House is operating under with the Republican majority in the U.S. House pushing to cut federal spending. A hiring stimulus based on a tax break for employers may appeal to Republican lawmakers, many of whom have called for measures to help businesses. The idea of cutting the employer contribution to payroll taxes also has recently been under discussion among Republican members of Congress, said Douglas Holtz-Eakin, who was chief economic adviser to the 2008 Republican presidential nominee, Senator John McCain of Arizona.”  Bloomberg
So, once again it appears some in Washington, including some White House advisors, follow Fed Chairman Ben Bernanke’s infamous claim that the federal government should follow the lead of bank robber Willie Sutton and use Social Security as the piggy bank to solve our economic woes.
"Willie Sutton robbed banks because that's where the money is, as he put it," Bernanke said. "The money in this case is in entitlements."
American workers have successfully funded the Social Security program for 75 years and that critical linkage between contributions and benefits is what keeps Social Security a self-funded program.  Proposals like this threaten the program’s independence, forcing Social Security to compete for limited federal dollars. Targeting Social Security’s funding to provide economic stimulus is a uniquely dangerous and foolhardy approach.  While December’s 2% payroll tax cut successfully diverted billions from Social Security, some suggest it may not have succeeded in creating the stimulus projected:
“The way things are going at the moment, all the payroll tax cut will do is offset the rise in gasoline and food prices, rather than provide a boost to real spending." Capital Economics senior economist Paul Dales.
Weakening Social Security should not be a political bargaining chip this White House is willing to play in order to appease those whose borrow and spend fiscal policies got us here in the first place.
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