At Nancy & Kathy’s Medicare Café, All Terrible Ideas Are on the Table

May 17, 2011

Medicare Cuts, Tax Hikes, Bankruptcy and Bureaucrats Make for an Unappetizing Meal

House Democrat Leader Nancy Pelosi on Monday became the second Democrat in less than a week to consider Medicare and Social Security “on the table” for cuts. Pelosi’s announcement follows a similar declaration by her hand-picked candidate Kathy Hochul who is one of the Democrats running in the special election in NY-26:

PELOSI DECLARES MEDICARE AND SOCIAL SECURITY “ON THE TABLE”:“House Minority Leader Nancy Pelosi (D-Calif.) on Monday agreed that everything should be put on the table in an effort to reduce the deficit, including entitlements like Medicare and Social Security. ‘Yes,’ she said in a CNBC interview in New York, when asked whether entitlements should be a part of the deficit solution. ‘I think Medicare is on the table. I think Social Security is probably on its own table, because we have to have it be solvent, it has to be strong, and we have to deal with it in its own mechanism, in my view.” (Pete Kasperowicz, “Pelosi: Everything Should Be On The Table To Reduce Federal Deficit,” The Hill, 5/16/2011)

HOCHUL AGREES WITH HER POLITICAL BOSS: “I for one think that everything should be on the table: Entitlements, defense spending, but also revenues.”(Remarks from Kathy Hochul, WGRZ, 5/12/2011)

BY PUTTING SOCIAL SECURITY “ON THE TABLE,” PELOSI AND HOCHUL GO WHERE REPUBLICANS DID NOT: “The Congressional Budget Office (CBO) has conducted a long-term analysis of a budget proposal by Chairman Ryan to substantially change federal payments under the Medicare and Medicaid programs, eliminate the subsidies to be provided through new insurance exchanges under last year’s major health care legislation, leave Social Security as it would be under current law, and set paths for all other federal spending (excluding interest) and federal tax revenues at specified growth rates or percentages of gross domestic product (GDP).” (“Long-Term Analysis of A Budget Proposal by Chairman Ryan,” Congressional Budget Office, April 2011)

This Pelosi-Hochul entitlement cut plan is just the latest edition of the Democrats plan to cut Medicare. Last week, the Obama-appointed trustees of Medicare announced that the program will go bankrupt in 2024. Everything appears to be going according to the Democrats’ plan, since the expected date for Medicare’s bankruptcy is now five years earlier than what was forecast last year:

MEDICARE’S TRUST FUND WILL GO BANKRUPT IN 2024, FIVE YEARS EARLIER THAN FORECAST LAST YEAR: “Medicare’s trust fund will run dry in 2024, five years earlier than forecast just last year, and Social Security’s will be exhaused by 2036, adding fuel to the debate over cutting one or both programs to reduce annual budget deficits. (Richard Wolf, “Medicare, Social Security Money Running Out Faster,” USA Today, 5/13/2011)

BUT WAIT, THAT PROJECTION MAY BE TOO OPTIMISTIC: “The Medicare figures are suspect, because they rely on billions of dollars in savings projected under the health care law signed by President Obama last year. Those savings depend on many factors, such as cuts in payments to doctors that Congress habitually sidesteps, as well as improvements in doctors’ and hospitals’ productivity.” (Richard Wolf, “Medicare, Social Security Money Running Out Faster,” USA Today, 5/13/2011)

The Democrat Medicare plan does provide a couple of options beyond bankruptcy, such as a 17 percent Medicare benefit cut or a 24 percent tax hike:

“The long-range financial imbalance could be addressed in several different ways. In theory, the standard 2.90-percent payroll tax and the additional tax 0.9-percent tax on high-income earners could be immediately increased by the amount of the actuarial deficit to 3.69 percent, or expenditures could be reduced by a corresponding amount. Note, however, that these changes would require an immediate 24-percent increase in the tax rate or an immediate 17-percent reduction in expenditures.” (pp. 28-29, “2011 Annual Report of the Board of Trustees of the Federal Hospital Insurance and Federal Supplementary Medical Insurance Trust Funds,” The Boards of Trustees of the Federal Hospital Insurance and Federal Supplementary Medical Insurance Trust Funds, 5/13/2011)

If those ideas sound disturbing, don’t worry because President Obama has his own Medicare plan. Obama’s plan empowers 15 unelected and unaccountable bureaucrats to cut Medicare. With one terrible idea after another on the table, the Democrat plans for Medicare are enough to give Americans indigestion.

“Wanted: nationally known health care experts to serve on controversial health care board that will make painful Medicare spending cuts. Must be willing to quit current job to do it. Also, must be willing to go through bloody and humiliating confirmation fight. That’s the job description for the 15 members of the Independent Payment Advisory Board — the new panel created by President Barack Obama’s health care law to come up with ways to cut Medicare spending if it grows too fast.

“It’s the board Republicans would love to turn into this year’s version of the ‘death panel,’ but Obama is firmly committed to the idea — so committed that his latest deficit reduction plan would give it even more power.” (David Nather, “Cutting Medicare: D.C.’s Worst Job?,” Politico, 5/14/2011)