Stan Collender roundly condemns the Bush administration's complete inaction in Medicare:
I have only one thing to add to what Andrew and Pete, my two bloggers in crime here at Capital Gains and Games, have both posted on the Medicare trustees report: it was facinating to watch the Bush administration talk about the immediate need to deal with Medicare after having adamantly refused to deal with the problem since Inauguration Day 2001.I have vivid memories of former Treasury Secretary John Snow continually being asked why the administration wasn't proposing a Medicare reform package even though its problems were projected to be much closer than Social Security's, which it was proposing to change. His often-repated answer was that the White House wanted to deal with Medicare as part of a comprehensive health care reform plan...which it then also never proposed.
To now hear the current secretaries of Treasury, Labor, and HHS say that immediate action is needed while still not submitting a plan or admitting that they've been sitting on the sidelines for the past seven-plus years is some combination of amusing, infuriating, and fascinating.
Our nation's lack of action on Social Security is appalling. Not because it is going to bust the budget--it is going to become a very large, but still supportable, drain on resources. No, the reason it is appalling is that the structural incentives built into Social Security substantially depress labor force participation in a way that makes it harder to pay for Social Security, and especially health care.
But if Social Security appalls, Medicare quite stops the heart. We've seen this moment coming for twenty years and done nothing. Now it's here, folks: Medicare goes into deficit this year. For the first time, the general fund will be sending money to the entitlement programs, not the other way around. And that deficit will keep growing, and growing, and growing . . .
The Bush administration's response in the face of this has been glacial indifference. Nay, that's too kind: a glacier would at least pay enough attention to us to crush us under its icy maws. The administration's sole contribution to the question of "How do we pay for all this healthcare?" has been "While we're spending all this money we don't have, why not blow a few trillion on drugs, too?"
I can't give the Bush administration all the credit here, of course. Congress sure helped. The Democrats forced the government to spend more money on seniors by making it a key campaign platform, then complained when we didn't push our great generational overdraft higher still. The Republicans rushed to cater to their older constituents. And let's all have a big round of applause for those hard-working folks down at the AARP, who will seemingly be satisfied only when everyone under the age of fifty is actually physically chained to a desk, and all of their output funneled--via one of those vast pneumatic tube networks we'll all be using in The Future--directly into Centrum Silver and greens fees.
The Medicare/SS crises will create an intergenerational political war, the likes of which we have never seen before. Programmatically, it can only be resolved by reducing payouts and benefits. Politically, it will be with us until the baby boomers die out.
Which of the two parties will be the first to realize that they need to capture the youth vote on this one? It will not be long before the working generations will try to take away the franchise from us old bloodsuckers who only vote in our own interest.
This will be war.
note that these taxes serve to increase the demand vector at WMT..
The Government hates poor people.
I think politically the need to tackle the Social Security Old age program first is correct. Medicare is so entangled in the whole regulation/lack of markets in health insurance that it really cannot be solved separately.
If we cannot perform a relatively simple reallocation of FICA dollars to a more pay as you go scheme where the only parties are the Government and individuals, how can you possibly deal with the Medicare mess of hospitals, doctors and pensioners?
The "young" vote is generally apathetic, stupid and vulnerable to fads. The Boomners are a huge cohort, they are organized (or will use the existing AARP to become so) and selfish in the extreme. They will use their power at the ballot box to keep us paying for their retirement lifestyle while they loot the treasury. Look at how the Bush Admin's incredibly timid little foray into Social Security Reform was so roundly shot down. Why would any candidate or legislator from either party want to pick up that live wire until it is far too late.
What's frustrating is that none of the candidates are talking, or getting asked, about this issue.
According to their websites, Obama and Clinton talk about negotiating lower drug prices, which seem like bandaids at best.
Clinton and Obama both plan to push for a variety of universal health insurance; Clinton wants to make it mandatory, Obama does not (he assumes people will want it and sign up for it voluntarily).
It's not at all surprising that the Republicans have done nothing. Their actual goal is to eliminate both Social Security and Medicare. Why bother fighting to reform programs you hate that are killing themselves off without your help? Eventually, given enough inattention their goals will be achieved. It seems very well-planned to me.
"I can't give the Bush administration all the credit here, of course. Congress sure helped. The Democrats forced the government to spend more money on seniors by making it a key campaign platform, then complained when we didn't push our great generational overdraft higher still."
So the solution to Repubs who pander to seniors by advocating expansions to the Medicare program that we plainly can't afford is to elect Dems whose primary objection to the Bush program was that it was too stingy and too market oriented.
"No, the reason it is appalling is that the structural incentives built into Social Security substantially depress labor force participation in a way that makes it harder to pay for Social Security, and especially health care."
Of course, removing the SS income cap on the FICA tax, as Obama ("The One") advocates should help rationalize the labor force participation incentives.
Paging Ryan Avent.
Um, Megan?? The entire federal guv has been in huge deficit since BushCo came into office. Why doesn't this fucking matter, but SS and specific programs do?
How much of my taxes this year will go to paying interest on the debt? Why doesn't anyone ever mention this?
Martin,
What would really rationalize the labor market with regards to payroll taxes is to get rid of payroll taxes, not increase them even more.
Funding SS and Medicare through income taxes is more rational than what we are doing since we aren't actually pre-funding true pension and health plans with the surplus payroll taxes anyway.
It's not at all surprising that the Republicans have done nothing. Their actual goal is to eliminate both Social Security and Medicare.
It's surprisingly easy to convince yourself you're right when you get to invent the motives of your opponents. Like this: the actual goal of liberals is to force a majority of voters into dependence on government, thereby insuring it will continue to grow.
Back to reality, I believe the government should help those who are actually in need. Our current system largely uses age as a wildly inaccurate proxy for need, the result of which is huge transfers from the relatively poor young to the relatively wealthy old.
Do I really need to link the Grover Norquist quote again?
Yancey,
In keeping with the spirit of Megan's post, my observation was meant to be self-contradictory, bordering on incoherent. However, if we were to fund SS and Medicare via the income tax, the third of the electorate that now pays no income tax would pay no federal taxes at all, while still drawing on a full range of government services. Being able to vote yourself benefits and services at no cost seems like a serious moral hazard. Nevertheless, since accumulating moral hazard appears to be all the rage in our society these days, I fear we will go down this path. But remember: eventually the money really does run out.
librob wrote: It's not at all surprising that the Republicans have done nothing. Their actual goal is to eliminate both Social Security and Medicare. Why bother fighting to reform programs you hate that are killing themselves off without your help? Eventually, given enough inattention their goals will be achieved. It seems very well-planned to me.
Wait until you hear about how the moon landing was faked. It will blow your mind.
Do I really need to link the Grover Norquist quote again?
You're going to cite a known agenda-activist and lobbyist as the leading voice of the entire Republican party in regards to two of the government's largest entitlement programs? Go right ahead, if you think your credibility can survive the hit.
Martin,
LOL! My apologies, I was reading way too fast this morning to catch that. Man, I need to cut down on the coffee.
The Bush administration's response in the face of this has been glacial indifference.
Gee, you think it might have anything to do with remembering what happened in 1995? You know, when Newt Gingrich tried to reform Medicare, and Bill Clinton demagogued him and the Republicans to death?
Maybe Megan is just too young to remember 1995.
squeaky_mouse:
And what credibility would that be? I'm flattered that you think I have some to be hit. Thank you!
From Norquist's bio at the Americans for Tax Reform site:
Article on Norquist in The Nation, May 14, 2001 issue:
I can has credibility?
And what credibility would that be? I'm flattered that you think I have some to be hit. Thank you!
First, you win over the mice. Then the rats, then the higher rodents, and...well, it's sort of a long upward climb from there, but it always starts with the mice!
As for the other, FWIW I found the article easily enough:
http://www.thenation.com/doc/20010514/dreyfuss
Strip away the usual political rag spin and fluff, and it doesn't tell me anything other than that Norquist is an activist and a lobbyist, engaged in activitism and lobbying. He doesn't appear to speak on behalf of the Republican party's overarching goals for SS or Medicare.
liberalrob,
I'm a little curious how you see this one playing out - how the inattention ultimately leads to elimination.
One day, five or six years from now, during the McCain Administration, he walks out onto the balcony and announces "Well, it's official, Medicare has spent all its money. It's bankrupt. JP Morgan will be buying it for $2/person. Don't expect any more medical treatment. Thank you, and God Bless America."
I mean, in vague principle, I get the notion of "I don't like Medicare, why should I bust my ass fixing it?", but it sounds like you're positing some actual plan or agenda...
Now it's here, folks: Medicare goes into deficit this year.
Ummm, that started happened a while ago (three years ago, if I recall correctly) and Medicare has been using general funds to make up the shortfall (i.e., taking back the money from the trust fund). Get with the program...
Perish the thought.
Cut taxes (and therefore revenues), increase spending, run huge, unsustainable deficits, start a few protracted, expensive foreign wars (without increasing taxes to pay for them), and then just wait. Eventually the system will teeter on fiscal collapse, at which point you can demand that the big social entitlement programs you hate be eliminated for the survival of the Republic (and have a good case in favor of such action).
There's either ideology behind this, or massive incompetence. Either way, the Republicans have got to go.
liberalrob,
Massive incompetence is the correct answer, starting with FDR and continuing through LBJ.
Remember that the "lock box" was unlocked and raided beginning in the spring of 1968, with LBJ's final "guns & butter" budget; the first "Unified Federal Budget". (It was Nixon's first budget, but he didn't create it.)
Also, remember that those of us currently collecting social security and medicare had no choice but to participate. Try dis-entitling us from these entitlement programs!
There was a huge amount of congressional demagoguing and caterwauling in response to Bush's attempt to reform social security.
The proposal was DOA and congress did not propose or attempt to pass any alternative fixes for social security.
Given the response to the social security proposal it is difficult to see how bush could float, let alone pass, any policy ideas to repair the medicare fiscal train wreck.
The GOP does not want to fix Medicare since they know that such a fix must involve fixing healthcare in general (otherwise you're just dipping the ocean with a sieve). Now the only "reform" the GOP has to offer there is to get rid of employer-provided insurance and just let everyone buy their own, which would be catastrophically unpopular (and would price about 2/3 of the population right out of healthcare entirely). Any real fix inevitably involves some expansion of the public programs and truly universal healthcare. They won't do that, enslaved as they are to their blinkered, narrow ideology on one hand and the Big Money insurers on the other. If the Lord Jesus himself appeared at the next GOP covnetion and ordered them to do it, they wouldn't.
JonF wrote:
Many on the left have made this same assertion, but no has explained what it means. What does it mean? Why can't the government fix its "problems" in Medicare and Medicaid first? What difference does it make to everyone else if the goverment fixes this smaller segment of healthcare first? I just don't get that kind of reasoning. Why is it easier to fix the entire healthcare system while it is impossible to fix a smaller segment of it?
The social security and medicare liabilities are not the long term problem that people think.
The federal government has around $40T in assets (e.g. the feds own 85% of Arizona and Nevada) that can be liquidated over the next 30-40 years to pay for these entitlements. If these assets are sold off over this period of time (say, around $1T per year), both the medicare and social security obligations can easily be met without any increases in taxes, even if the economy remains flat.
By 2040, SENS (Strategically Engineered Negligible Senescence) or some similar biotechnology will make universal rejuvenation a reality which, in turn, will obsolete both medicare and social security such that they can then be shutdown permanently.
The resultant American society around 2040 will be a post-mortal society (the aging process being eliminated) with a radically reduced federal government. This is a very, very desirable outcome that is worth working to create.
I didn't know stan blogged! Thanks for this, I was a regular reader when I was on the Hill and had national journal access all the time. I'd gotten out of the habit of reading him since my whole world is ruled by RSS now, so thank you.