Tag Archives: Medicaid

Playing Russian roulette with the country’s future.

We need more adults. Robert J. Samuelson brilliantly explains why:

The budget impasse raises comparable questions. Can we resolve it before some ill-defined crisis imposes its own terms? For years, there has been a “something for nothing” aspect to our politics. More people became dependent on government. From 1960 to 2010, the share of federal spending going for “payments to individuals” (Social Security, food stamps, Medicare and the like) climbed from 26 percent to 66 percent. Meanwhile, the tax burden barely budged. In 1960, federal taxes were 17.8 percent of national income (gross domestic product). In 2007, they were 18.5 percent of GDP.

This good fortune reflected falling military spending — from 52 percent of federal outlays in 1960 to 20 percent today — and solid economic growth that produced ample tax revenue. Generally modest budget deficits bridged any gap. But now this favorable arithmetic has collapsed under the weight of slower economic growth (even after a recovery from the recession), an aging population (increasing the number of recipients) and high health costs (already 26 percent of federal spending). Present and prospective deficits are gargantuan.

The trouble is that, while the economics of giveaway policies have changed, the politics haven’t. Liberals still want more spending, conservatives more tax cuts. (Although the tax burden has stayed steady, various “cuts” have offset projected increases and shifted the burden.) With a few exceptions, Democrats and Republicans haven’t embraced detailed takeaway policies to reconcile Americans’ appetite for government benefits with their distaste for taxes. President Obama has provided no leadership. Aside from Rep. Paul Ryan (Wis.), chairman of the House Budget Committee, few Republicans have.

What do we get from our elected leaders? “Scripted evasions.”

Liberals imply (wrongly) that taxing the rich will solve the long-term budget problem. It won’t. For example, the Forbes 400 richest Americans have a collective wealth of $1.5 trillion. If the government simply confiscated everything they own, and turned them into paupers, it would barely cover the one-time 2011 deficit of $1.3 trillion. Conservatives deplore “spending” in the abstract, ignoring the popularity of much spending, especially Social Security and Medicare.

So the political system is failing. It’s stuck in the past. It can’t make desirable choices about the future. It can’t resolve deep conflicts.

This article should be required reading for anyone running for public office.

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Filed under Economics

Romney Offers More Details

Mitt Romney, in a speech before a conservative group here on Friday, offered his most detailed plan yet to cut government spending and lower the federal debt, including an overhaul of Medicare and significant changes to Social Security.

Speaking at theAmericans for Prosperity Foundation’s annual meeting, Mr. Romney said his plan would cap spending at 20 percent of gross domestic product by 2016, and would require $500 billion a year in spending cuts. To accomplish this, Mr. Romney explained, he would eliminate all nonessential government programs, including Amtrak, return federal programs like Medicaid entirely to the states and improve the productivity and efficiency of the federal government. He would also immediately cut all nonsecurity discretionary spending by 5 percent across the board.

Mr. Romney’s proposal for Medicare is similar to the hotly debated plan that Representative Paul Ryan of Wisconsin, the chairman of the House Budget Committee, introduced in April. Mr. Ryan’s plan would replace Medicare and offer payments to older Americans to buy coverage from the private market.

Mr. Romney’s proposal would give beneficiaries the option of enrolling in private health care plans, using what he, like Mr. Ryan, called a “premium support system.” But unlike the Ryan plan, Mr. Romney’s would allow older people to keep traditional Medicare as an option. However, if the existing government program proved more expensive and charged higher premiums, the participants would be responsible for paying the difference.

This is certainly a good start, and appears to be correcting for some of the difficulties Ryan found in proposing his plan.

He presented his plan as offering more choice — though younger Americans would need to be prepared to possibly pay more, for instance, depending on which plan they selected.

“Younger Americans today, when they turn 65, should have a choice between traditional Medicare and other private health care plans that provide at least the same level of benefits,” he said. “Competition will lower costs and increase the quality of health care.”

He concluded, “The future of Medicare should be marked by competition, by choice, and by innovation, rather than by bureaucracy, stagnation and bankruptcy.”

His plans for Social Security did not include any privatization plans, which some of his Republican presidential rivals support. Instead, “for the next generation of retirees, we should slowly raise the retirement age,” he said. “And finally for the next generation of retirees, we should slow the growth of benefits for those that have higher incomes.”

We will have to see how this is scored by the CBO to see if it is sufficient to curb Medicare costs to a less ominous level, but that he’s speaking about it is a good first step. This problem will not age well.

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Filed under Domestic Politics, Election 2012

Romney Hints at Fiscal Plan

Here in New Hampshire, where Romney enjoys a big lead in the polls, he presented his prescription for the country’s growing debt. He said he would cut federal spending by about $500 billion during his first term by eliminating programs and services he doesn’t like (he cited President Obama’s health-care overhaul) and those he does like but doesn’t think the country can afford (he cited Amtrak).

Romney also pledged to turn responsibility for costly entitlement programs like Medicaid over to state governments, to “let states draft programs in a way they think best to care for their own poor.” He plans to reveal more details of his fiscal policy agenda during a speech Friday in Washington.

“There’s some who say when you talk about fiscal responsibility and cutting a program, you’re showing that you’re heartless,” Romney added. “We have to say, ‘No, no, no, you have to understand. We have a moral responsibility not to spend more than we take in.’ . . . It is a moral responsibility to believe in fiscal responsibility. We do and I do.”

I’ll be waiting for the details, specifically, what he plans to do with Medicare.

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Filed under Election 2012