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March 22, 2013
Cave in Obama puts Social Security and Medicare in budget deal
By Michael Collins
The big cave in has started. Obama put Social Security and Medicare on the table. We knew he'd do it, didn't we?
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(Article changed on March 22, 2013 at 14:47)
(Washington, 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):
"President 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.
"So, 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.
Allow 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
Ed Silverman, February 15, 2013
In addition to cutting medicine costs, Medicare research could
President Obama was elected to deliver on more jobs and to protect Social Security and Medicare. We all know how well he's done on jobs. Now we see his approach to the two entitlement programs. God forbid, he should stop endless wars, military meddling, and cut back on the 1,000 U.S. military bases overseas. Saving mega contracts for the defense industry is clearly much more important than protecting two programs vital to the health and well being of citizens -- programs that can be optimized without needless benefit reductions.
Geithner's rhetoric as Chairman of the Social Security and Medicare Board of Trustees is the proof of Obama's alignment with The Money Party's position that the programs need serious cuts. He knows the story on his good friend Tim before he appointed him.
The president and Geithner don't care. They don't have to. Benefits, retirement, and an overly abundant lifestyle are guaranteed. All that's required is delivery on demand. The bosses need "change they can count on."
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