Wednesday, February 06, 2013

Kick 'Em To The Curb

Oh, he's good... very, very good.  In his address on Tuesday emphasizing his opposition to implementation of the budget sequester, President Obama remarked

I just want to repeat; the deals that I put forward, the balanced approach of spending cuts and entitlement reform and tax reform that I put forward are still on the table.
I’ve offered sensible reforms to Medicare and other entitlements and my healthcare proposals achieved the same amount of savings by the beginning of the next decade as the reforms that have been proposed by the bipartisan Bowles-Simpson fiscal commission.

These reforms would reduce our government spending bill. [mechanical noise interruption] What’s up cameramen? [laughter] Come on, guys. They’re breaking my flow all the time.
These reforms would reduce our governments bills by reducing the cost of healthcare, not shifting all those costs onto middle class seniors or the working poor or children with disability but nevertheless achieving the kind of savings that we’re looking for.

But in order to achieve the full 4-trillion dollars in deficit reductions, that is the stated goal of economists and our elected leaders, these modest reforms in our social insurance programs have to go hand in hand with a process of tax reform so that the wealthiest individual and corporations can’t take advantage of loopholes and deductions that aren’t available to most Americans.

While recommending "modest reforms in our social insurance programs," the President emphasized his offer of "sensible reforms to Medicare and other entitlements."

It's hard to be opposed to "modesty" and "sensible" anything.  It's especially difficult when the President promises it "would reduce our government's bills by reducing the cost of healthcare, not shifting all those costs onto middle class seniors or the working poor or children with disability."

Use of effective buzzwords is critical to winning a political (or perhaps any) argument.  (Frank Luntz has built a very lucrative career around it.) Modest, sensible, and reform gets Obama halfway there.  But these "reforms" are cuts, notwithstanding the clever framing: "reducing the cost of healthcare, not shifting all those costs..."

Unfortunately, President Obama is not aiming to reduce the cost of healthcare overall but, as a careful reading of his message indicates, is aiming to reduce the cost of the government bill for healthcare.  This sleight-of-hand is effectuated when Obama says his plan "would reduce our government's bills by reducing the cost of healthcare."

This is no mere technicality.  It would be sheer folly for a President to state "I'm going to reduce benefits to the elderly, the poor, and the sick by cutting the most popular and effective government programs enacted since World War II."  Instead, he implies- but does not say, for it would be untrue- that slicing Medicare (a health care vehicle demonstrably more cost-effective than private insurance) would lower the cost to the American public of healthcare, but merely the government's bill.   Then he assures us that he is "not shifting all those costs onto middle class seniors or the working poor or children with disability."   For he is not shifting all those costs; only some.

A recent poll of sentiment toward Social Security found most respondents opposed to raising the retirement age or means testing benefits, but in favor of eliminating the payroll tax cap, increasing the tax rate, and applying a more generous inflation index to determine benefits.Yet, to President Obama this means his "balanced mix of spending cuts and tax reform is the best way to finish the job of deficit reduction. The overwhelming majority of the American people Democrats, Republicans and Independents have the same view."  Reality, it seems, is sometimes ignored even by Democrats. Or in this case, President Obama.

"The greediest generation" former Senator Alan Simpson calls them, while the more subtle critics of earned benefits, including the Peter G. Peterson Foundation and the Washington Post editorial page, pose as supporters of the younger generation against the pampered, old cranks. But as The New York Times recently reported

In the current listless economy, every generation has a claim to having been most injured. But the Labor Department’s latest jobs snapshot and other recent data reports present a strong case for crowning baby boomers as the greatest victims of the recession and its grim aftermath.

These Americans in their 50s and early 60s — those near retirement age who do not yet have access to Medicare and Social Security— have lost the most earnings power of any age group, with their household incomes 10 percent below what they made when the recovery began three years ago, according to Sentier Research, a data analysis company.

Their retirement savings and home values fell sharply at the worst possible time: just before they needed to cash out. They are supporting both aged parents and unemployed young-adult children, earning them the inauspicious nickname “Generation Squeeze.”

New research suggests that they may die sooner, because their health, income security and mental well-being were battered by recession at a crucial time in their lives. A recent study by economists at Wellesley College found that people who lost their jobs in the few years before becoming eligible for Social Security lost up to three years from their life expectancy, largely because they no longer had access to affordable health care.

Other than promoting the use of chained CPI to underestimate the true cost of inflation and thus reduce Social Security benefits, the proposals to cut Social Security would exclude individuals above a certain age.  Opposition by the oldest cohort to weakening the program, then, reflects a concern for the younger generation, as well as an understanding of the value to the country of a program which enhances inter-generational equity and national cohesion.

In case anyone was uncertain that the President wants most of the sacrifice to be borne by recipients of Social Security, Medicare, and Medicaid, Obama maintained "deep and indiscriminate cuts to things like education and training, energy and national security, will cost us jobs and it will slow down our recovery."   Viewing his approach and the GOP's sudden willingness to consider letting the sequester occur, Digby comments

The Republicans have been winning at every step along the way and they just keep demanding more, more, more.   And they will again, even if they agree to the President's proposals. And that's because the President's proposals at every step of the way have also been Republican proposals.

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