Friday, 05 February 2010
If You Thought the Gregg/Conrad Commission was a Bad Idea...
...wait until you read this.
On the day of President Obama's State of the Union address, Republican Representative Paul Ryan of Wisconsin introduced a budget proposal that would, according to the Congressional Budget Office [pdf], create a budget surplus of about five percent by the year 2080. The three main changes that Ryan's Roadmap for America's Future would make are:
• Restructure the federal tax code to eliminate all taxes on interest, dividends, capital gains and estates (which mostly benefits the rich)
• Privatize Medicare and Medicaid
• Privatize Social Security
In other words, the proposal would transfer even more wealth from the working and middle classes to the rich while making it more difficult for everyone to get the health care they need and deserve, not to mention jeopardizing everyone's retirement.
As Ezra Klein put in the Washington Post, “Ryan's budget proposes reforms that are nothing short of violent.” The National Committee to Preserve Social Security and Medicare agrees: the plan “decimates Social Security and Medicare in the name of deficit reduction.”
Nowhere in Ryan's Roadmap does the word "defense" appear in relation to the military. There are no spending cuts in it except to Social Security, Medicare and Medicaid, and it increases costs to individuals for those programs and private coverage as it simultaneously cuts benefits.
Medicare and Medicaid
People age 55 and older are grandfathered into the current system. Younger people would be issued vouchers pegged to income to purchase private coverage, but the vouchers' growth would be far slower than the projected growth of health care costs. And because private insurers pay providers more than Medicare does and their administrative costs are much higher, beneficiaries would face far higher premiums for coverage similar to Medicare.
The plan also provides for tax-free medical savings accounts. I've never been able to figure out how families who live paycheck to paycheck are expected to afford these. Ezra Klein again:
“This proposal would take Medicare from costing an expected 14.3 percent of GDP in 2080 to less than 4 percent. That's trillions of dollars that's not going to health care for seniors. The audacity is breathtaking.”
As with Medicare, people 55 and older are grandfathered into the current Social Security system. Ryan's proposal would gradually raise the age of eligibility for Social Security to 69 and there are a couple of other tweaks. But here is his main objective: workers would be allowed to invest more than a third of their Social Security taxes in private retirement accounts.
Didn't we just kill President Bush's privatization plan a few years ago? Did Representative Ryan sleep through the economic disaster of the past two years? What is he thinking?
I'll tell you what he's thinking: like Bush, he wants to transfer the trillions of dollars in workers' Social Security accounts to Wall Street bankers who would make billions servicing the accounts and then be bailed out when the next financial meltdown occurs. Perhaps the congressman has a stash of refrigerator boxes to sell to elders to live in the next time that happens.
This plan puts every citizen's security in the hands of the Republican-beloved free market and we all know how well that's been working even before the crash.
A reminder: Whatever you hear from slash-and-burn legislators (and more than a few know-nothing journalists) about Social Security being broken, they are wrong (more likely, disingenuous). Just a couple of minor changes that would cause no undue pain to anyone would secure the program for decades to come.
Medicare, however, is a pressing issue. Its financial problems must be addressed which Congress tried to do with health care reform that is now moribund thanks to the Republicans. And the general budget deficit is not as urgent to fix now as Representative Ryan and others in Washington say; it's mostly an anti-Obama political ploy in an election year.* But whether it is addressed now or later, why do certain Congress members think elders should pay for it all.
Representative Ryan's bill, H.R. 4529 [full text here – pdf], was introduced in the House on 27 January. According to TalkingPointsMemo, it is “highly unlikely to ever see the light of day beyond a perfunctory party-line vote as a substitute to the Democrats' budget.”
We can only hope so. But you've got to watch these guys every day and take names. They have failed so far, but they never stop trying to kill Medicare and Social Security, and they become more brazen with every succeeding attempt.
* 5AM UPDATE: I wrote this post yesterday and this morning in The New York Times, economist Paul Krugman agrees with me about the non-threat of the current deficit, headlining today's op-ed, "Fiscal Scare Tactics."
[NOTE: I have left out a lot of detail contained in Ryan's bill and various useful commentary to keep this post from wonking out. You can find all the particulars you might care to know in the links scattered above.]
At The Elder Storytelling Place today, Nancy Leitz: The Depression Coat