Democracy Under Assault
Theopolitics, Incivility and Violence on the Right

Michele Swenson

Republicans (& Some Democrats): Killing Medicare to "Save It"

It's no secret that for 40-plus years Republicans have sought to eliminate New Deal programs and Medicare. What may surprise some is the extent to which President Obama and the Democratic leadership have been willing to deal away Medicare.

A Washington in thrall to Wall St. and big-money interests often discounts the will of the majority of Americans, who support measures like increased taxation of the rich and preservation of Social Security and Medicare, by 4:1 in a 2011 poll.

President Obama is the first Democratic president to offer to deal away Medicare and Social Security as bargaining chips of deficit reduction, an intent he expressed even prior to his inauguration. Subsequently, he placed Medicare and Social Security on the table during the 2011 manufactured deficit ceiling crisis, portending greater concessions in future negotiations.

Obama's concessions to the political right began with his embrace of Republicans' "deficit crisis" narrative that drives their 40-year effort to shift wealth upward. The president adopted the deficit crisis as a primary focus of his 2010 State of the Union address, and made spending cuts the principle means to those ends. Subsequently, he refused to veto extension of Bush tax cuts for the 1%, while seeking a "grand bargain": huge deficit reduction primarily through spending cuts (including Medicare and Social Security) affecting the working class (the 99%).

The language of "entitlement" is frequently manipulated to serve various political agendas. To the political right and some Democrats, entitlement denotes programs benefiting the working class. Health care, Social Security, Medicare and civil service pensions have become targeted "entitlements," though working people are financially invested in all of these.

Entitlement more aptly applies to crony capitalists and too-big-to-fail Wall St. banks that continue to gamble and shift risk to the working class, presuming the right to a future multi-trillion-dollar taxpayer bailout when they inevitably crash again. David Stockman, Ronald Reagan's penitent former budget director (The Triumph of Crony Capitalism) observes, "We now have an entitled class of Wall Street financiers and corporate CEOs who believe the government is there to do whatever it takes in order to keep the game going and their stock price moving upward." Money dominates politics, distorts free markets and endangers democracy, says Stockman, "...we have neither capitalism nor democracy. We have crony capitalism."

Common wisdom among corporate media/Washington elites holds that deficits cannot be controlled unless entitlement spending is cut. Widely embraced is the notion that the Simpson-Bowles Deficit Reduction plans (both the original, which never made it out of committee, and the resurrected 2012 version) are the "most bipartisan plans," inflicting "equal pain on both sides." Even JP Morgan Chase Co. CEO Jamie Dimon,, appearing on Meet the Press fresh from his company's $2 billion derivatives trading loss, talked up Simpson-Bowles - no secret that Wall St. covets the opportunity to profiteer from a privatized Social Security.

Questioned why the most recent incarnation of Simpson-Bowles did not pass out of the House at the end of March 2012 when most Democrats voted against it, Rep. Nancy Pelosi declared the revised version unacceptable because it raised the age of eligibility for Social Security. At the same time she expressed readiness to support the original plan's cuts to Medicare, Medicaid and other social programs, pronouncing it "very bold."

The Democratic congressional leadership has moved away from its staunch defense of Social Security, Medicare and Medicaid and their previous rejection of the original Simpson Bowles plan as "simply unacceptable". Consequently Rep. Pelosi and Senate Majority Leader Harry M. Reid fell in line behind President Obama's even larger cuts to Social Security, Medicare and Medicaid in exchange for a mere $800 billion in tax increases during the manufactured debt-ceiling crisis negotiations. Speaker John Boehner backed away from the deal before agreement was reached, however, the precedent was established for dealing away Social Security, Medicare and Medicaid during future negotiations, anticipated as early as the 2012 lameduck session post-election.

Facilely ignored by corporate Washington has been Rep. Jan Schakowsky's alternative proposal to Simpson-Bowles, designed to close the deficit without penalizing the working class.

Both the president and congressional Democrats have offered subsequent proposals to cut Medicare and Social Security. The Social Security Payroll Tax Cut without raising the cap for taxation purposes leaves that program vulnerable. During his "grand bargain" negotiations in the summer of 2011, President Obama also proposed raising the age of Medicare eligibility to 67, thereby shifting greater costs to seniors, states and employers for two additional years. Sensing a chance for increased profits, private health insurers enthusiastically backed the idea.

Super Committee Democrats offered large Medicare cuts in October 2011, proposing to trim $400 billion from Medicare, half each from benefits and provider reimbursements. The Budget Control Act of 2011 for deficit reduction called for an automatic two percent reduction in Medicare payments, pending failure of agreement by the 12-member bipartisan Committee on Deficit Reduction (who failed to agree).

At the end of 2011, Sen. Ron Wyden (D-OR) joined Rep. Paul Ryan (R-WI) in further lowering the bar by sponsoring a proposal for a 2-track program of privatized/voucherized Medicare that will splinter and ultimately gut traditional Medicare, as adverse selection isolates the sickest in the traditional program.

Stepping up assaults on social programs, in March 2012 Republicans offered a plan to move seniors from traditional Medicare into multiple private insurance plans of the Federal Employees Health Benefits Plan (FEHBP), which would be heavily subsidized and reportedly drive up the costs of the FEHBP. Republicans would also means-test benefits and gradually raise the age of Medicare eligibility to 70 by 2034.

Ironically, Republicans' proposal to corporatize Medicare for profit offers an almost identical plan to move seniors into subsidized private insurances as President Obama's Affordable Care Act (ACA) offers non-retirees. Both the Republican and Democratic health plans shift costs of heavily subsidized private health insurances to taxpayers.Republicans' plan sends the really sick to a subsidized high-risk pool, or to Medicaid, stated Sen. Rand Paul. Acknowledging the effort to remove the issue of Medicare as a positive for Democrats ("a dependent voter is a dependable vote"), Sen. Jim DeMint touted greater "freedom" and "choice" with corporate-driven Medicare - including "greater choice of doctors," asserted Sen. Lindsey Graham. In fact, full freedom of choice of providers and hospitals would only be achieved with a Medicare-for-All model, unlike the private insurer plans that restrict choice, each to a limited network of providers. The "socialism" bogeyman raised by the right distracts from the fact that Medicare has always permitted full choice of providers, most of whom remain in private practice.

Throughout the reform process, Washington ignored several decades of studies demonstrating savings of $400 billion a year utilizing single-risk-pool universal coverage, an improved Medicare-for-All. Medicare-for-All would eliminate the private insurer middlemen who practice "denial management" to prioritize profit over health care, and would reduce health cost burdens on businesses and boost job growth and the economy. Ruling elites have likewise rejected negotiation of bulk drug, medical equipment and hospital rates, preferring to subsidize insurance and pharmaceutical industries to the tune of hundreds of billions of taxpayer dollars.

Even as President Obama has moved to deal away Medicare for seniors, he has advanced private insurance-based reform that originated within the Republican Heritage Foundation, and was written by the heavily-subsidized health insurance industry that increasingly pushes underinsurance - fewer benefits at greater cost to individuals, employers and employees. Even if the Affordable Care Act works as planned, the Congressional Budget Office projects there will still be 23 million uninsured in 2019.

In his brilliant commentary, The $4 Trillion Income Shift," Doctor of Political Economy Jack Rasmus lays out the scheme for the $4 trillion wealth shift upward, advanced by the Washington consensus that $4 trillion in tax cuts for the rich over the past decade should be paid for by $4 trillion in budget cuts disproportionately taken from programs benefiting the working/poor over the next decade. Rasmus notes that every deficit commission from Simpson-Bowles to the Gang of Six to the Supercommittee of 12, has called for a minimum $4 trillion in budget cuts. Fully 75 percent of spending cuts have typically been assessed to Medicaid, CHIP, students loans and assistance to schools, Medicare and Social Security. The remaining 25 percent of deficit reduction is tentatively to be achieved by "closing tax loopholes," rather than any progressive taxation of the wealthy.

"Don't let the perfect be the enemy of the good" served as a facile preemption of discussion of Medicare-for-All from the health care reform debate. It seems instead that "the mediocre has become the enemy of the better," as both major political parties run with the deficit crisis narrative, essentially arguing that they have to kill Medicare in order to "save it," ostensibly to salvage some remnant of it for the future. Both parties are complicit in compromising away Medicare by attempts to break it up into numerous smaller risk pools, creating a multi-tiered health care model that ultimately abandons most and serves the 1% by feeding the for-profit health insurance bottom line.