Harry Reid's Appointments: Social Security And Medicare Now At Risk

Posted on 11 August 2011

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By Robert Borosage
Campaign for America's Future

Senate Majority Leader Harry Reid announced yesterday that his appointees to the super committee Gang of 12 were Sens. John Kerry, Patty Murray and Max Baucus. Reid chose not to appoint Sens. Bernie Sanders or Sherrod Brown or Jeff Merkley, who have forcefully stood with the majority of Americans who want Medicare and Social Security protected and who favor raising taxes on the rich to help reduce the deficit.

Baucus, the chairman of the Senate Finance Committee, is a conservative Democrat. He has been a consistent supporter of Social Security, playing a key role in blocking President George W. Bush’s attempt to privatize the program. He was on President Obama's deficit commission but sensibly voted against the plan put forth by the co-chairs, which would have cut deeply from Social Security and Medicare.

On the other hand, Baucus is a leading recipient of contributions from the drug companies and the health insurance industry. He has voted against repealing the tax benefits for companies that ship jobs overseas. He voted for the Bush tax cuts and voted to repeal the estate tax. He is not a champion of sensible health care policy or progressive tax reform.

Kerry, according to The Washington Post, is supposed to “appease liberals.” He ran for president in 2004. In that campaign, he pledged to protect Medicare and Social Security, arguing that we should not balance the budget on the backs of seniors. In recent months, he has spoken forcefully against the Republican efforts to turn Medicare into a voucher program.

But, like Obama, he is fatally attracted to the notion of a grand bargain, sacrificing cuts in Medicare and Social Security in exchange for increased revenues to reduce long-term deficits. And he is simply wrong-headed about what the nation must do in order to get the economy on track.

In a now infamous interview on Meet the Press, Kerry touted the $4 trillion “bigger deal” that Obama and House Speaker John Boehner nearly reached, with “a mix of reductions and reforms in Social Security, Medicare and Medicaid but also recognize we needed to do some revenue.”

The “real problem for our country,” Kerry argued, “is not the short-term debt… It’s the structural debt of Social Security, Medicare, Medicaid measured against the demographics of our nation.”

This is the essence of Pete Peterson, establishment nonsense. Yes, as every projection shows, we have a long-term debt problem. It is entirely a question of our broken health care system. Its soaring costs will bankrupt everything – families, businesses, state and federal governments – unless they are brought under control. That requires not cutting Social Security and Medicare and Medicaid, which simply transfers those out-of-control costs to the most vulnerable and least able to pay. That requires taking on the drug and insurance companies, the private hospital complexes, the way we deliver medicine that leaves us with a system that costs nearly twice as much per capita as every other industrial system and delivers worse results.

Kerry goes on to say that a growth plan requires that “number one, we’ve got to deal with this debt and deficit, send Wall Street and the marketplace a message that the United States of America is deadly serious about dealing with this long-term structural deficit…”

Dealing with the debt and deficit in the midst of the recession, with Europe sinking and the recovery stalled, is a recipe for a renewed decline. Look at Britain, with riots on the streets. Look at Greece, with demonstrations throughout the country. Austerity bites. It costs jobs; it exacts pain on an economy already sick. It is like bleeding a patient already weak from loss of blood.

Kerry’s appointment will alarm, not appease liberals – for he is the most dangerous of politicians: someone who doesn’t understand what he doesn’t understand.

Patty Murray is the head of the Democratic Senate Campaign Committee. This has led good government groups to protest that her interests in fund-raising will skew her positions on taxes and military spending (reinforced by being from the state of Washington, once the headquarters of Boeing). It has led Republicans to call for her to be withdrawn as too political.

A little political sense would be a good thing for Democrats on the committee. What is striking about the grand bargain that the president and House Majority Leader John Boehner allegedly were close to negotiating is how far removed it was from the priorities of the vast majority of Americans. It reportedly involved an exchange of cuts in Medicare (raising the eligibility age by two years) and Social Security (by lowering its inflation adjustment to cut benefits over time) for lower rates on taxes for the rich and corporations and limiting deductions on big-ticket items like employer-based health care or mortgages.

Americans, by overwhelming majorities, want Social Security and Medicare protected. And they favor tax increases on the rich and the closing of corporate tax havens as the first step in getting deficits under control. Democrats with a sense of social decency or a sense of self-preservation would be wise to stand with that majority. That opinion represents both good policy and good politics – something Tea Party Republicans scorn and Democrats would be wise to defend.

If these three are in fact Harry Reid's appointees, progressives must mobilize. Social Security and Medicare, the basic promises we make to one another, the programs that workers pay into in order to have a modicum of security after a life of hard work, are now clearly at risk.


Robert L. Borosage is the founder and president of the Institute for America’s Future and co-director of its sister organization, the Campaign for America’s Future. This article originally appeared on Campaign for America's Future blog.

Bush crashed the economy partly through tax cuts for the wealthy that were due to expire. It is a bitter pill for me to see my social security and medicare negotiated away by people who have signed a pledge to not increase taxes, but gave away $800 billion in tax cuts to the wealthy during the Bush years. Sadly I blame Obama for this. If we cut "entitlements", I need to hear why with charts and specifics. I don't need my President to be held hostage and cave on what is for me a life-support system. We need government to focus on jobs, not this bizarre waste of time that will result in nothing until after the election. Reform should be to the wasteful election process that reveals the level of corruption in our government.

What's hysterical (and sad, disturbing and sick) about right wingers and their attacks on the programs that have made this country what it is, is that they represent solutions to our problems, not the other way around.

AS we know, social security is running a surplus, doesn't add a cent to the deficit, and if nothing is done can pay full benefits for another 28 years. And, the way you could shore it up for another 100 years is simply have millionaires pay the same rate as their maids.

As for Medicare, this is where it starts to get really "dumb" on the right. To what extent Medicare is going "broke" is because of our for profit, private health care system. Medicare simply gets ripped off by this broken system (solved by single payer) like we all do...the only difference is it is up to 10 times more efficient than having private insurance...because it avoids all the money wasted on administrative costs, advertising, and profit being skimmed off the top (and it can negotiate in bulk).

Together, these two programs (Medicaid also incredibly successful, as evidenced by the study...yet another one by the way...that just came out of Oregon), since enacted, have cut poverty among seniors from about 70% to 10%. And, with our broken private health care system rising in costs faster than inflation (up to 3x's), the question isn't how much these programs cost, the question is how much more it would cost our society to not have them? (in dollars and lives)

Imagine the amount of poverty? The amount of seniors without insurance? The amount of health costs and suffering? Hell, the result of austerity measures is being demonstrated around the world...all to the same effect...destroying lives, economic growth, and jobs in order to serve the big banks and institutions. These same corporate interests, be it the insurance industry or Wall Street, want their grubby hands on Medicare, Social Security and Medicaid too (and of course the GOP that serves those interests)...despite what the effect this would have on people.

Economist Robert Reich points out this great right wing myth that somehow Medicare is the problem, when in fact, its the solution, he writes:

"The real problem is the soaring costs of health care that lie beneath Medicare. They're costs all of us are bearing in the form of soaring premiums, co-payments, and deductibles.

Americans spend more on health care per person than any other advanced nation and get less for our money. Yearly public and private health care spending is $7,538 per person. That's almost two and a half times the average of other advanced nations.

Yet the typical American lives 77.9 years -- less than the average 79.4 years in other advanced nations. And we have the highest rate of infant mortality of all advanced nations.

Medical costs are soaring because our health care system is totally screwed up. Doctors and hospitals have every incentive to spend on unnecessary tests, drugs, and procedures.

You have lower back pain? Almost 95% of such cases are best relieved through physical therapy. But doctors and hospitals routinely do expensive MRI's, and then refer patients to orthopedic surgeons who often do even more costly surgery. Why? There's not much money in physical therapy.

Your diabetes, asthma, or heart condition is acting up? If you go to the hospital, 20 percent of the time you're back there within a month. You wouldn't be nearly as likely to return if a nurse visited you at home to make sure you were taking your medications. This is common practice in other advanced countries. So why don't nurses do home visits to Americans with acute conditions? Hospitals aren't paid for it.

America spends $30 billion a year fixing medical errors -- the worst rate among advanced countries. Why? Among other reasons because we keep patient records on computers that can't share the data. Patient records are continuously re-written on pieces of paper, and then re-entered into different computers. That spells error.

Meanwhile, administrative costs eat up 15 to 30 percent of all health care spending in the United States. That's twice the rate of most other advanced nations. Where does this money go? Mainly into collecting money: Doctors collect from hospitals and insurers, hospitals collect from insurers, insurers collect from companies or from policy holders.

A major occupational category at most hospitals is "billing clerk." A third of nursing hours are devoted to documenting what's happened so insurers have proof.

Trying to slow the rise in Medicare costs doesn't deal with any of this. It will just limit the amounts seniors can spend, which means less care. As a practical matter it means more political battles, as seniors -- whose clout will grow as boomers are added to the ranks -- demand the limits be increased. (If you thought the demagoguery over "death panels" was bad, you ain't seen nothin' yet.)

Paul Ryan's plan -- to give seniors vouchers they can cash in with private for-profit insurers -- would be even worse. It would funnel money into the hands of for-profit insurers, whose administrative costs are far higher than Medicare.

So what's the answer? For starters, allow anyone at any age to join Medicare. Medicare's administrative costs are in the range of 3 percent. That's well below the 5 to 10 percent costs borne by large companies that self-insure. It's even further below the administrative costs of companies in the small-group market (amounting to 25 to 27 percent of premiums). And it's way, way lower than the administrative costs of individual insurance (40 percent). It's even far below the 11 percent costs of private plans under Medicare Advantage, the current private-insurance option under Medicare.

In addition, allow Medicare -- and its poor cousin Medicaid -- to use their huge bargaining leverage to negotiate lower rates with hospitals, doctors, and pharmaceutical companies. This would help move health care from a fee-for-the-most-costly-service system into one designed to get the highest-quality outcomes most cheaply.

Estimates of how much would be saved by extending Medicare to cover the entire population range from $58 billion to $400 billion a year. More Americans would get quality health care, and the long-term budget crisis would be sharply reduced.

Let me say it again: Medicare isn't the problem. It's the solution."

Perfectly put. So simple that a six year old should understand it. On the other hand, six year olds aren't selling their souls for campaign contributions. Mobilization is, as you say, critical. Thanks for the great post.

"the extent of Medicare and Medicaid fraud is truly mind-blowing"
"After purchasing the wheelchairs at about $900 wholesale and paying for the prescriptions, he pocketed the remainder of about $6,000 in taxpayer money he received as Medicare reimbursements, according to court documents." CATO at http://www.downsizinggovernment.org/medicare-fraud-et-tu-reverend

in other news, the sun came up this morning" CATO

“Medicare remains on a path that is fiscally unsustainable over the long term.” (Statement of Kathleen King, Director, Health Care, Before the Subcommittee on Oversight and Investigations, Wednesday, March 2, 2011)
“In fiscal year 2010, the Centers for Medicare & Medicaid Services (CMS)--the agency that administers Medicare and Medicaid--estimated that these programs made a total of over $70 billion in improper payments.” (GAO-11-409T March 9, 2011)
“An Armenian-American crime syndicate stole the identities of doctors and thousands of patients and used them and more than a hundred spurious clinics in 25 states to bill Medicare for more than $100 million for treatments no doctor ever performed and no patient ever received, the federal authorities announced on Wednesday.” (New York Times, October 13, 2010, 2:13 pm)
“Since 2006, prosecutors allege that Patel Pharmacies wrongly billed Medicare for more than $37.7 million in prescriptions and Medicaid for $20.8 million, as well as distributing millions of doses of powerful painkillers.” http://www.detnews.com/article/20110812/METRO/108120425/1361/Judge-keeps...
“With federal authorities closing in on his multimillion-dollar Medicare fraud ring, pastor Christopher Iruke allegedly hunkered down at his South L.A. storefront church with a congregant and shoved pages upon pages of incriminating evidence into a shredder until the machine overheated. August 11, 2011, Victoria Kim in the Los Angeles Times, http://articles.latimes.com/2011/aug/11/local/la-me-fraud-20110811
“MIAMI -- Federal investigators have arrested a 10th person in a South Florida scheme to defraud Medicare out of more than $27 million.” Miami Herald, August 11, 2011 http://www.miamiherald.com/2011/08/11/2354295/us-arrests-10th-person-in-...
“DETROIT -- A Florida woman who committed multimillion-dollar Medicare fraud in the Detroit area has been given a generous reduction in her prison sentence.” http://www.miamiherald.com/2011/08/09/2351206/miami-woman-in-detroit-med...
“the extent of Medicare and Medicaid fraud is truly mind-blowing” http://www.downsizinggovernment.org/medicare-fraud-et-tu-reverend
“SANTA ANA, Calif. -- An Orange County doctor and his medical group have agreed to pay the U.S. government $7.5 million to settle a lawsuit alleging they submitted bills to Medicare for cancer medications that were never provided to patients.” http://www.sacbee.com/2011/08/05/3820074/cancer-treatment-doc-settles-me...
“Medicare Growing Fiscally Unsustainable, Yet Remains Politically Untouchable” (http://www.kaiserhealthnews.org/daily-reports/2010/october/26/medicare-a...)