Major hurdle for Republicans in 2012: Reality


Economist Dean Baker points out that Republicans are a tad miffed that their vote for Representative Ryan’s plan to end Medicare is being used against them. Various groups around the country are using the vote in attack ads against incumbents, and they lost an upstate New York congressional seat that they held for 50 years. Says Baker:

Medicare is a hugely popular program. Polls consistently show that the program has enormous public support among all political and demographic groups. Not only do Democrats and independents overwhelmingly support the Medicare program, even Republicans overwhelmingly approve of Medicare. Even Tea Party Republicans overwhelming approve of Medicare.

The Republicans can try to deny that their plan actually ends Medicare and hope that voters will be sufficiently confused that they won’t hold the vote against them. They have already been staking out this ground, claiming that they just want to “change” Medicare. Instead of saying that they would give beneficiaries a voucher to use to buy a health insurance policy, which would allow people to understand their proposal, they are instead saying that it is a system of “premium support,” which is a term that no one understands.

This may help with a few pundits, but if the Republicans can’t keep their political opponents from pointing out that their plan actually does replace Medicare’s insurance with a voucher system, this silly charade will not buy them much. People know the difference between being handed a check for $8,000 and being told to go buy insurance and the current Medicare system, which covers most of the cost of most care.

The problem is that those pesky Democrats are actually talking about what the Republicans did. For instance, New Hampshire Representative Charlie Bass tried to keep television stations from running ads that said that he voted to end Medicare, but ran up against that other pesky little problem, the first amendment. In any case, Republicans are going to do their best to convince the public that they didn’t really do what they did: vote to end Medicare.

Baker offers the GOP a simple solution: reverse the vote. Since Republicans control the House, they could hold a vote tomorrow and repeal the budget plan. And they could probably convince Harry Reid to permit a vote that would allow Senate Republicans to do the same. As Baker says, “This is the sort of advice for which they would pay political consultants millions. But the Republicans can get it here for free. If they were smart, they would take it.”

14 responses to “Major hurdle for Republicans in 2012: Reality

  1. The way they keep trying to spin it is that they’re “saving Medicare”. I don’t think it’s working.


  2. Republicans have ALWAYS wanted to get rid of Medicare, but in the 60’s and 70’s it wasn’t all of them – today it is.

    This is a perfect example of why when polled people who self identify as ‘conservative’ in fact support liberal programs and many liberal ideas.


  3. You guys are in your own little world . You remind me of Kevin Bacon in Animal House screaming ” All is well . ” before he gets trampled in a riot . The latest figures I have seen are that SS and Medicare have $ 106 Trillion in unfunded liabilities . Or over $ 5,00,000 per household . Doing what Democrats say, doing nothing, or doing little tweaks are all BS . The only hope of saving SS and Mediscam is the Ryan plan .


    • Hey Alan, how’s it going! 106 trillion in unfunded liabilities, huh? Gee that sounds like a VERY high figure–could you break that down for us?

      Never mind, I took a minute and looked it up myself. I found one quote by Richard Fisher, CEO of the Federal Reserve Bank of Dallas, in a speech in 2009 to a group called the Washington Association of Money Managers. He said that newspapers had recently reported that that Social Security would begin spending more than it takes in by 2016. Then he said “Left unreported was the fact that the discounted present value of entitlement debt, over the infinite horizon, reached $104 trillion.” (Italics added.) In a footnote he says:

      Estimates for Medicare are compiled from the official 2009 Annual Report of the Boards of Trustees of the Federal Hospital Insurance and Federal Supplementary Medical Insurance Trust Funds. The $88.9 trillion cumulative figure presented here is the amount by which promised benefits for Medicare Parts A, B and D exceed expected revenues over the infinite horizon using a long-run discount rate of 2.9 percent.

      Neither estimate incorporates the value of program trust funds, currently estimated at $2.4 trillion for Social Security and $0.3 trillion for Medicare. Because spending down these trust funds will require the use of general revenue, some budget analysts include them when calculating unfunded liabilities. If this is done, then the total figure would rise from $104 trillion to $106.7 trillion.

      OK, there’s your 106 trillion bucks. Now you may have noticed that funny little phrase “over the infinite horizon” used by Fisher, which sounds kind of like a long time doesn’t it? I downloaded the 2009 report, and yup it’s in there:

      table III.B10 presents estimates of HI unfunded obligations that extend to the infinite horizon. The extension assumes that the current-law HI program and the demographic and economic trends used for the 75-year projection continue indefinitely except that average HI expenditures per beneficiary will increase at the same rate as GDP per capita beginning in 2084.

      So the “the infinite horizon” doesn’t even start until 2084, which isn’t going to help Republicans a whole lot in 2012. Then it extends, well, infinitely, into the future, and makes all kinds of assumptions about health costs and GDP. Bottom line: it’s just a projection, a “what if” scenario. There is NO 106 trillion in unfunded liabilities, it’s just some guys jerking around with a spreadsheet. But if you’re already throwing around this number, I venture that fear mongering Republicans will be tossing it around every chance they get in the coming year.


  4. ojmo ,

    I guess you are right, ” All is well ” . Funny thing is the young people do not believe you . Even the temporarily brain dead one’s who voted for Obama in 08 . They are realizing that just as President Obama was wrong about spending his way to prosperity, you are wrong about SS and Mediscam being solvent without reform . You and Obama have taught them a valuable lesson.

    Now in fairness, I now have to admit to being wrong about the unemployment rate . 6 months ago I predicted that even with your guy misrunning things, by now unemployment would be under 8.5% . Even though it hurts Obama and you, I am not happy about being wrong .

    I still stand by my figures on unfunded liabilities . There ain’t enough money or rich people in the universe to pay these bills . I hope you can come up with your $ 5,00,000 .


    • Alan,

      Who said anything about no reform? What I’m saying is no REPEAL which is what the Ryan plan would do, at least to Medicare. A lot of elderly people are going to needlessly lose their health care and be plunged into poverty, while insurance companies clean up.

      And what you say about the $106 trillion is absolutely true: “There ain’t enough money or rich people in the universe to pay”. Doesn’t that tell you something? Try this experiment: take the amount of money in your savings account, and using whatever interest rate you’re getting now, project your balance out to the “infinite horizon”. Whatever figure you come up with represents an “unfunded liability” by your bank. It doesn’t mean they’re insolvent; they just don’t have that cash on hand today.


    • [you are wrong about SS and Mediscam being solvent without reform]

      Now, now, Alan. Play nice. Ain’t no one, no where, no how, ever ever said that. Ain’t no one, no how, no where, beleives that.


  5. Ojmo,

    As I understand the Ryan plan, those over 55 would be protected . Those under 55 got to make new plans. A little pain now or total pain later, your call. If President Bush’s plan had not been totally lied about and destroyed by your guys in 2001 , we would be well on our way to solving these problems . The longer your guys delay reforms now, the more draconian the changes will be later . The people who are telling you that entitlements are okay, are lying to you .


    • Alan, I’m not sure what you’re referring to when you mention President Bush’s plan. If you mean his plan to privatize Social Security, Wall Street would have been the only real beneficiary.


    • But perhaps you refer to Meidcare Part D that Bush got passed – totally unfunded? Great deal for us old geezers, but nasty for everyone else.

      Medicare A and B had funding mechanisms built in; they are no longer enough and we need reform, but Medicare D?

      Ah, Mr. BUsh’s Medicare D was pretty much done for the insurance companies. They’re making lots of crispy green stuff and the gov’t has no funds to pay its share.

      And I don’t let the Congress of either party off the hook on that one.


  6. Ms. Holland ,

    I have to say wordpress has me confused. My old post keeps coming up when I try to post something new . Well we will see what actually posts .

    We have a difference of opinion that will not resolve itself . I will continue to dispute what you say because I believe you are misinformed .

    Ojmo ,

    I know I have said this a million times but here is a million and one . Ask yourself why most private businesses abandoned their defined benefit plans for 401ks . I mean other then the fact that in your eyes American businessmen are swine .

    Defined benefit plans no longer work . SS is a defined benefit plan that no longer works . I know this means nothing to you , but time will bear me out .The last defined benefit plans are in government . The SEIU and the rest of the screw U, Mr. Taxpayer crowd have managed to preserve them for now . They are a major factor or were a major factor in the demise of the American Auto industry . Please prove me wrong .


    • Alan, I’m not going to do your research for you. When you back up one of your blanket assertions with some evidence or reasoning that can be verified, then I’ll look into it. Besides, I don’t think you would accept any evidence or proof I could provide; you choose to hold on to your beliefs even when contradicted by facts, as in the unfunded liabilities example above.


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