Members of the 113th Congress have now taken their oaths of office but their day of congratulatory celebrations and receptions will soon be a distant memory as a series of self-induced fiscal “crises” will demand this new Congress’ full attention. Over the next few months, Congress will face default, sequestration, and a possible government shutdown. We can be sure that the well-financed anti-entitlement lobby will not let these crises go to waste. Each one provides the perfect backdrop for their long-running campaign to cut Medicare, Medicaid, and Social Security benefits to pay down the federal deficit.
Already, Republicans in Congress are promising to — once again — hold the debt ceiling hostage to force benefit cuts in Medicare, Medicaid, and even Social Security. If they can’t get these cuts by threatening the solvency of our nation, their next opportunity will come as Congress attempts to craft a deficit reduction plan to avoid the $110 billion in automatic cuts delayed in the fiscal cliff legislation. Once again, many legislators have made it clear they expect seniors, retirees, the disabled, and the poor to pay down our deficit. They will demand drastic changes such as raising the retirement age, means testing, or changing the cost of living allowance (COLA) formula to cut benefits to millions of middle class and poor beneficiaries in Medicare, Medicaid and Social Security who are still struggling in this economy.
Democrats in Congress succeeded in keeping these devastating benefit cuts out of the short-term “fiscal cliff” deal. Unfortunately, important leverage was also lost. Washington’s well-financed anti-entitlement lobby continues to pretend that “shared sacrifice” means that if a millionaire loses a tax break (which he or she doesn’t need and America can’t afford) then the middle-class and poor must also pay more for or risk losing their health care benefits in Medicare and Medicaid. This false equivalency pretends that a tax dollar lost to a millionaire or huge corporation is the same as a benefit dollar lost to a retiree living on $14,000 a year in Social Security. This fiscal myth permeates the deficit debate and explains why members, like Senate minority leader Mitch McConnell, have no intention of addressing a full deficit package in a balanced way since the short-term fiscal cliff deal “was the last word on taxes. That debate is over.” Using this political metric, cuts to Medicare and Social Security benefits will be used to pay for the majority of a fiscal mess these programs simply did not create.
Even if Congress is allowed to cut Medicare and Medicaid to the bone, the real challenge to our economy — skyrocketing health care costs — remains untouched. For too long, conservatives in Congress have ignored the fact that if the U.S. paid the same costs per person for health care as other wealthy countries our nation would be looking at long-term surpluses, not deficits. If the rate of growth in overall health care is restrained so it is no longer growing faster than the rest of the economy, Medicare’s long-range financial deficit could be cut by well over one-half. In fact, we may be seeing movement in that direction as former OMB Director, Peter Orszag reports, “health care costs have decelerated over the past few years, and Medicare costs have decelerated more than other health costs.”
There are also ways to make Medicare and Medicaid more efficient and save money without cutting benefits to vulnerable Americans. In fact, many of these reforms have been implemented in the Affordable Care Act, the same legislation which many in Congress who claim to want to “save” Medicare have worked tirelessly to destroy. Health care reform added eight years of solvency to Medicare and should be given time for full implementation. 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, and many of the same so-called fiscal hawks, who’d rather reduce spending by cutting benefits to seniors than curtailing excessive Medicare payments to the highly profitable pharmaceutical industry.
Claims that the only way to “save” Social Security is to cut benefits also ignores the fiscal facts. Social Security has not contributed one penny to the deficit and doesn’t even belong in a deficit debate. If solvency is truly the goal, then Congress needs to follow the advice of the vast majority of the American people who support lifting the payroll tax cap. Modest and manageable changes will make Social Security stronger for generations. In spite of this fact, cutting benefits by raising the retirement age, means testing, or adopting a stingier cost of living formula still remain the favored approach for Wall Street CEO’s and the many deficit-scold lobby groups flooding the halls of Congress.
Iowa Senator Tom Harkin said it best when casting his vote against the fiscal cliff deal: “Every dollar that wealthy taxpayers do not pay under this deal, we will eventually ask Americans of modest means to forgo in Social Security, Medicare and Medicaid benefits.”
That’s billions of dollars America’s middle-class and poor families simply don’t have.