Tuesday, August 14, 2012

Running-Mate Paul Ryan and Mitt’s Medicare Mess

by Nomad
o it seems as if the final chapter in the sorry Romney campaign is presently being written. After what can only be described as a disastrous summer, Romney settled on Tea Party and Fox News sweetheart

Paul Ryan as his running mate.
"It’s a big step toward what the tea party has been trying to accomplish," said Matt Kibbe, the president and CEO of FreedomWorks, a national group aligned with the tea party. "It gives people a reason to be more enthusiastic about the Republican ticket."
In Romney’s never-ending (but futile) quest to be liked, the candidate has made one more desperate appeal to the far right. If that was the idea, then it was a colossal blunder.

By Sunday of that week, Romney was already backing away from Ryan budget. "I have my budget plan," he said. "And that's the budget plan we're going to run on." 

So other than his popularity with the Tea Party- which supports Medicare and Social Security cutbacks, what motivated Mitt to select Ryan? Good hair? A
strong chin?
It surely wasn't Ryan's leadership abilities. After 13 years in Congress, Ryan has only seen two of his bills pass into law during that time.

One renamed a post office in his district, the other bill was a change in the way arrows were taxed. That's it. Even Michele Bachmann has a better record being a co-sponsor on 316 bills, 78 of which were voted on and 4 becoming law. (Lest we forget the Light Bulb Freedom of Choice Act!)

This Ryan decision has exposed Romney’s Achilles heel. After all Romney's public statements, after all his flip-flopping and back-peddling, Romney has really lost all semblance of a coherent message. 

Take a look at the record.
Back at the end of last year in one of the many many debates, Romney told the audience :

Let's not forget, only one president has ever cut Medicare for seniors in this country, and it's Barack Obama. We're gonna remind him of that time and time again.
Like so many statements he has made, while superficially bold, it was actually not only a flat-out lie, it was an embarrassingly-easy one to refute. Not only was Obama not the only president to cut Medicare, starting with Reagan, each and every president has made cuts in Medicare. 

In the 1980s, first Ronald Reagan and then George H.W. Bush introduced major changes to the way Medicare pays for services: Reagan brought a "prospective payment system" to Medicare hospital insurance while Bush brought a fixed fee schedule to Medicare physician insurance.
This trend continued in the next decade under a Democratic president too:
During the 1990s, Bill Clinton signed the Balanced Budget Act.* That reduced Medicare spending by even more than the Affordable Care Act will.
George Bush's 2008 budget called for large cuts in the growth of Medicare, and repeatedly said that the costs of Medicare and Medicaid were unsustainable. Most of the Medicare savings in the budget were achieved by reducing the annual update in federal payments to hospitals, nursing homes, hospices, ambulances and home care agencies.

The Lesson of Reagan’s Attempt
When President Reagan submitted his budget in 1981, despite his pledges to leave Medicare untouched, the administration proposed $1 billion in reductions. With the program’s expenditures ballooning from $7 billion in 1970 to $40.7 billion that year, promises were like pie crusts- made to be broken. All in all, this was a modest cut in the Medicare budget and yet, it gave the appearance of cost-saving. 
Then Congress also got in on the cutting. The House Ways and Means Committee voted to cut more than $1.7 billion from Medicare, and the Senate Finance Committee voted an estimated $1.98 billion cut.

According to the book, Health Care Politics And Policy in America, By Kant Patel, Mark E. Rushefsky, by the middle of the 1980s, it was time to re-think the cuts.

... it was becoming clear that the Medicare program was unable to meet the health expenses of its beneficiaries. Their out of pocket expenses for services covered by Medicare were on the rise. In addition, the Medicare program did not provide coverage for certain basic services such as outpatient prescription drugs, custodial care and most of the nursing home care. The Reagan administration tried to address this problem of "medigap." In his 1986 State of the Union message, President Reagan unveiled his proposal for an expansion of Medicare. 
It was called the Medicare Catastrophic Coverage ActBy any estimate, Reagan’s proposal was a catastrophe in itself. 
Congress passed the 1988 Medicare Catastrophic Coverage Act (MCCA) in an effort to provide seniors with protection from catastrophic medical costs. The MCCA marked a turning point in Medicare policy. It sought to expand Medicare by requiring the beneficiaries themselves to fund the added benefits to the program through increased premiums and linking the size of the increase to beneficiary income. The MCCA was largely financed by middle and upper income beneficiaries.
And that was its fatal flaw. As far as the middle and upper class income recipients were concerned, this entitlement program was working fine.

Despite the clever packaging, the backlash to Reagan’s reforms took his administration by surprise. Even though it was an expansion of the program, many Medicare recipients simply would not hear of any changes. 

Rather than create a new entitlement out of whole cloth, Reagan insisted that the program be budget neutral and that the benefits be paid for by the beneficiaries, in stark contrast to Social Security and Medicare, which are both funded through payroll taxes on all workers.
While all Medicare users saw a small increase in their monthly premiums- it was the affluent Medicare recipients that were obligated to pay an additional surcharge. Even so, it amounted to a few hundred dollars a year. Overall, everybody would benefit under the reform. In the end, fear and disinformation won out. 
Opponents of the MCCA, many of whom profited from the old Medigap regime, launched a massive public campaign that misled millions of elderly voters into believing that they had to pay the maximum surcharge.
Within less than 17 months, after a groundswell of negative public reaction, Congress was forced to repeal the legislation. According to a post-mortem report,

Many elderly resented the idea of paying additional taxes to finance the new coverage. This would have represented a hefty burden on some, and, unlike the rest of the Medicare program, the additional benefits mandated by the act would have been financed entirely by the elderly. Resentment appeared to be highest among people who already had comprehensive health insurance coverage from a former employer. Not only did they bear the brunt of the financing, but the benefits of the new legislation added little to their existing coverage.
The lesson that Reagan learned - and one that Romney is going to learn perhaps- is that messing with Medicare is a political minefield. (In Reagan’s case, at least he was intelligent enough not to praise entitlement cuts before the election.)

Tea Party Train Wreck
Romney’s reason for selecting Paul Ryan as his running mate was, in fact, an appeal to the Tea Party. The Boston Herald gives us this portrait of Ryan:

In Ryan, the tea party sees someone who adheres strictly to its core principles — individual rights, distrust of big government and an allegorical embrace of the Founding Fathers. Tea party activists exalt his willingness to address the large-scale Medicare and Social Security cutbacks he says are needed to rein in out-of-control spending.
By permanently aligning his campaign with the fringe element of the Tea Party, Romney has now crossed the Rubicon. There’s no wiggling out of this mistake. And Romney should have known better. 

When Ryan unveiled his first budget proposal in 2011, it was called brave and courageous. At least, it was something solid. The problem was Ryan- rallied by the Tea Party leaders- rushed in where angels feared to tread. And, following in his footsteps, every one of the dismal Republican House representatives voted for Ryan’s budget. 

In May 2011, US News and World Report had this to say about the plan:

But there is a fine line between bravery and stupidity, and Ryan's budget plan blunders right across it. The plan's most controversial pillar would in essence repeal and replace Medicare, wiping out the defined benefit—healthcare coverage for seniors—and replacing it with a defined contribution, a subsidy of diminishing real value intended to help seniors buy private health insurance.
By October of that year, the Ryan budget plan was causing concerns within the Republican party. As John Ward for the Huffington Post, reports:

FreedomWorks, a Washington-based nonprofit, said Wednesday that the majority of more than 40,000 voters who have filled out an eight- to ten-question survey has indicated they are “more cautious” about changes to Medicare and Social Security than they are regarding other federal programs or agencies.
Yes, that's the same FreedomWorks quoted in the opening of the post. The organization that is thrilled to bits that Ryan is on the ticket, calling it "a big step." Of course, the spokesperson didn't specify which direction.  
In any case, there's a very good reason for hesitancy about fiddling around with Medicare. Medicare is a special case.  
And this is not a crowd that is shy about putting federal spending on the chopping block. The point of the survey is to identify $9 trillion in spending cuts over a decade, as an alternative to the quest of the so-called “Super Committee” to find $1.5 trillion in reductions over the same period.
So far, the people surveyed -- some 90 percent of whom self-identified as conservative or libertarian –- have identified about $6 trillion in cuts...
But even the most politically feasible changes to Medicare and Social Security received little enthusiasm. Raising the retirement age for the programs, which Republican politicians consider to be a starting point for reform, “tends to have weak support,” wrote Dean Clancy, FreedomWorks’ legislative counsel.
Respondents, Clancy stated in a memo, “prefer reductions in peripheral elements (such as tightening eligibility for Social Security disability or reducing Medicare teaching hospital subsidies), not cuts to core benefits.”
When polls showed general hostility to Ryan’s budget from senior voters, Ryan rushed back to the drawing board and softened the more controversial changes to Medicare. Still, the damage was done. Ryan equaled Medicare killing. The one-man death panel for seniors.

Romney didn't seem to notice this shudder of conservative voters. He was too busy trying to highlight the differences between himself and the other Republican candidates.

During the debates, Romney, (unlike his then rival for the Republican nomination, Newt Gingrich) was enthusiastic about the Ryan budget and praised the voucher scheme. 

Former New Hampshire Governor John Sununu, a Romney supporter, apparently speaking for the candidate said. “Mitt Romney supports what Paul Ryan did. He endorsed what Paul Ryan did.” 

In selecting Ryan, Romney has managed to locate the person most connected to the issue that can divide the Tea Party from the Conservative wing of the GOP. Even within the Tea Party- despite what its leaders say, there is anxiety. One poll gives these shocking numbers.

 A new McClatchy-Marist Institute for Public Opinion poll shows 81 percent of voters oppose major cuts to Social Security and Medicare. The poll, which tests voters’ opinions of deficit cutting policies being considered by the super committee, found overwhelming opposition to such cuts within each demographic. Even supposedly anti-government Tea Party supporters opposed the cuts by a 76-22 margin. The poll also found consensus behind increasing taxes on higher-earning Americans: 67 percent of respondents agreed with that suggestion, including 53 percent of Republicans.
With Paul Ryan at his side, Candidate Romney has leapt onto the Tea Party Express just in time for its head-on crash with reality.

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