(Article changed on March 22, 2013 at 14:47)
by Downing Street
DC 3/22) Yesterday we found out that President Barack Obama put
Here's what Bloomberg reported (thanks to Lauren Hallahan's list for the tip):
Barack Obama told Senate Democrats that they should be open to changes
in entitlement programs to achieve a long-term budget deal, according to
several lawmakers who attended a meeting with him on Capitol Hill
today." Bloomberg, March 21
Social Security does not contribute to the deficit. In fact, without the annual appropriation of Social Security funds , cash flow for the government would experience serious cash flow prolems. Each year, Treasury takes Social Security tax revenues to fund the general budget. Treasury leaves an IOU promising to repay beneficiaries down the road. The promise is guaranteed by the "full faith and credit of the United States of America." Who would take the word of the (s)elected "crooks and liars" given all the betrayals we see on a regular basis?
Paul Krugman called the process of cutting Social Security and
"We're going to have substantial spending cuts, substantial tax increases at a time when the economy is still very weak. And, of course, that's a recipe for sliding back into recession/depression.
we set ourselves up with the land mine in the road in front of our
economy, which is not based on anything real. It's just based on our
political mess." Paul Krugman, PBS, December 12
The Social Security program is secure. It doesn't need a backdoor fix like chained CPI
which sneaks in cuts by redefining the
Medicare is a victim of its success. People are living longer. As a result, the use benefits longer. Medicare costs are actually stabilizing as a portion of gross domestic product (GDP), based on data from the last five years. In an excellent article on future trends, Peter Orzag shows that a continuation of this trend puts Medicare at 3.8% of GDP by 2085 instead of the common projection of 6.7%. Medicare was 3.6% of GDP in 2011. The flat rate projection is not firm but, clearly, the near doubling of Medicare as a percent of GDP needs some serious revision.
A major program contributed to cost reduction. The federal government's Partnership for Patients developed and implemented successful efforts to reduce hospital re-admissions (within 30 days of discharge). It worked and the impact is substantial.
Two other actions would add a greater chance for Medicare's financial viability.
Medicare to negotiate medication discounts with big pharma. Congress
barred the program this logical form of cost reduction. The Veterans
Administration achieved extraordinary savings with this tactic. Barring
Medicare from the same negotiated deals is a subsidy for the
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