RNC Chair makes the wrong argument on Medicare

Here’s RNC Chairman Michael Steele this morning on ABC News’ This Week with George Stephanopolous.

And the reality — the reality still remains — the reality still remains that, at the end of the day, this thing grows the size of government; it inserts the government between the doctor and the patient. It now requires mandates on states that can’t afford, and it cuts $500 billion from a Medicare program that everyone in this country knows is on the road to bankruptcy.

Chairman Steele and Congressional Republicans are predictably using every policy and political weapon at their disposal to try to stop a bad health care bill. This argument, however, is nonsensical.

Medicare is “on the road to bankruptcy” because its spending is growing too fast. The way to get Medicare off the road to bankruptcy is to slow the growth of (in political parlance, “cut”) Medicare spending. “Cutting” $500 billion of future Medicare spending will make Medicare more fiscally sustainable, not less.

Indeed, we need to slow future Medicare and Medicaid spending by far more than the amounts done by the House or Senate health care bills.

I am not, however, praising the House or Senate bills health care bills for being fiscally responsible. Quite the opposite, since these bills capture so-called Medicare “savings” and then turn around and spend all of it on a new unsustainable health spending entitlement. The resultant policies would be less sustainable than current law, because the politically easy savings from Medicare would be replaced by politically harder-to-cut health insurance subsidies. This is why a vote for these bills is a vote for a future middle-class tax increase, which becomes a much more (politically) likely answer to future entitlement spending problems after the relatively easy Medicare savings have been captured and spent.

Anticipating the commenters, yes a downside of current budgeting rules is that it allows you to move money from one unsustainable program to another and claim that you’re not hurting anything. Technically, you’re not increasing the deficit relative to what it would have been under current law, but it’s irresponsible to increase spending if that current law path is unsustainable.

Had Mr. Steele wanted to play shameless scare-the-seniors politics, he could have accurately said that these bills were taking resources dedicated to seniors and instead spending them on working people. I wouldn’t have liked that argument, but at least it would have been accurate.

I hope Mr. Steele refrains from using this language in the future, or at a minimum modifies his attack so that it’s substantively valid. And shame on the House for yesterday moving us one step closer to fiscal oblivion.

My updated legislative projections for health care reform are coming soon.

(photo credit: Wikipedia)

By | 2017-12-10T10:11:32+00:00 Sunday, 8 November 2009|