What stunned House Speaker John Boehner more than anything else during his prolonged closed-door budget negotiations with Barack Obama was this revelation: “At one point several weeks ago,” Mr. Boehner says, “the president said to me, ‘We don’t have a spending problem.’ “
I am talking to Mr. Boehner in his office on the second floor of the Capitol, 72 hours after the historic House vote to take America off the so-called fiscal cliff by making permanent the Bush tax cuts on most Americans, but also to raise taxes on high earners. In the interim, Mr. Boehner had been elected to serve his second term as speaker of the House. Throughout our hour long conversation, as is his custom, he takes long drags on one cigarette after another.
Mr. Boehner looks battle weary from five weeks of grappling with the White House. He’s frustrated that the final deal failed to make progress toward his primary goal of “making a down payment on solving the debt crisis and setting a path to get real entitlement reform.” At one point he grimly says: “I need this job like I need a hole in the head.”
The president’s insistence that Washington doesn’t have a spending problem, Mr. Boehner says, is predicated on the belief that massive federal deficits stem from what Mr. Obama called “a health-care problem.” Mr. Boehner says that after he recovered from his astonishment—”They blame all of the fiscal woes on our health-care system”—he replied: “Clearly we have a health-care problem, which is about to get worse with ObamaCare. But, Mr. President, we have a very serious spending problem.” He repeated this message so often, he says, that toward the end of the negotiations, the president became irritated and said: “I’m getting tired of hearing you say that.”
With the two sides so far from agreeing even on the nature of the country’s fiscal challenge, making progress on how to address it was difficult. Mr. Boehner became so agitated with the lack of progress that he cursed at Senate Majority Leader Harry Reid. “Those days after Christmas,” he explains, “I was in Ohio, and Harry’s on the Senate floor calling me a dictator and all kinds of nasty things. You know, I don’t lose my temper. I never do. But I was shocked at what Harry was saying about me. I came back to town. Saw Harry at the White House. And that was when that was said,” he says, referring to a pointed “go [blank] yourself” addressed to Mr. Reid.
Mr. Boehner confirms that at one critical juncture he asked Mr. Obama, after conceding on $800 billion in new taxes, “What am I getting?” and the president replied: “You don’t get anything for it. I’m taking that anyway.”
The only problem is — and this is initially going to seem like heresy from a progressive is — the truth is everybody needs to pay more taxes, not just the rich. And it’s a good start. But we’re not going to get out of this deficit problem unless we raise taxes across the board, to go back to what Bill Clinton had and his taxes. And if we don’t do that, the problem is the pressure is going to be on spending even more.
Dean is right: the middle class must pay more if we want to keep entitlement programs alive — there just aren’t enough rich people to plunder.
Middle class people take more out of Medicare than they pay in, so the difference must come from somewhere.
The Bush tax cuts were temporary for a reason. They came after the tech investment bubble artificially, and temporarily, inflated federal revenues. Then the bubble burst and 9/11 happened.
Let them expire.
If I understand Dean’s about “pressure” he means pressure on spending less on more government programs. That we don’t need.
Yuval Levin at National Review
[T]he notion that Medicare has “less bureaucracy” than private insurers is deeply confused. . . . That sort of argument is often based on the claim that Medicare’s ratio of administrative costs (the money it spends on things other than care) to health costs is lower than those of private insurance companies. But this misses some key facts.
To begin with, many of Medicare’s most significant administrative costs are just covered by other federal agencies, and so don’t appear on Medicare’s particular budget, but are still huge costs of the program. The IRS collects the taxes that fund the program; Social Security collects many of the premiums paid by beneficiaries; HHS pays for a great deal of what you would think of as basic overhead, but doesn’t put it on the Medicare program’s budget. Obviously private insurers have to pay for such things themselves. Medicare’s administration is also exempt from taxes, while insurers pay an excise tax on premiums (which is counted as overhead). And private insurers also spend a great deal of money fighting fraud, while Medicare doesn’t. That might reduce the program’s administrative costs, but it greatly increases its overall costs. Some administrative costs save money, after all: The GAO has estimated that a $1 investment in pre-payment review of claims, for instance, would save $21 in improper Medicare payments.
Moreover, because Medicare covers older (and therefore sicker) patients than most private insurers (who are locked out of that market), the ratio of its spending on coverage to its spending on overhead is very different from the one most private insurers have—if administrative costs for managing two patients are both $100 but one patient has $200 of health expenses in a year and the other has $2,000 of health expenses, the insurer that covers the first patient will have a far higher administrative-cost ratio, even though both have the same administrative costs. On a per-patient basis, Medicare’s administrative costs most years are actually higher than those of private insurers, even though the program has all the enormous advantages just described in averting such costs and keeping them off the books.
…A few years ago, attempting to impose a “European constitution” upon the Continent, the Eurocrat elite took to warning their dull-witted peoples that if they were impertinent enough not to support their betters they’d be on a one-way ticket back to the concentration camps. “I’ve been in Auschwitz and Yad Vashem,” the Dutch prime minister, Jan-Peter Balkenende, warned the Netherlands before the referendum. “The images haunt me every day. It is supremely important for us to avoid such things in Europe.”
The idea that it’s a choice between an unreadable hyper-statist laundry list or the gas chambers seemed a wee bit overheated. But to their credit (not an expression I have occasion to use very often re the Europeans) the Dutch and even the French rejected this ludicrous rationale. And, to be fair, death camps and Nazi occupation are all well within living memory. Now the vice president is telling Americans it’s a choice between Obama-Biden multi-trillion-dollar shop-till-you-drop spend-till-you-end government . . . or 19th-century slavery. Swing low, sweet vice-presidential chariot.
For the record, Obama has already made $716 billion in Medicare cuts to pay for Obamacare. That’s three-quarters of a trillion. The German chancellor, Angela Merkel, was in Ottawa last week asking Her Majesty’s Canadian Government to chip in for the euro-zone bailout. The euro zone includes some of the richest nations in history, but it’s still not enough. And the entire euro-zone bailout is $450 billion — or a little over half the cost of the first Obama stimulus. Under Obama’s no-plan plan, there’s not enough money on the planet.
Underneath the poseur narcissism, the half-wit demagoguery, and the 13-figure innumeracy is bleak reality: a flatline economy, underwater property, declining social mobility, half the population getting a check each month from the government and with minimum-wage service jobs as the only alternative to long-term dependency…
…On “Meet the Press” the other day, I asked Rachel Maddow if she supported the $700 billion in cuts, and she simply wouldn’t say. Here was the Oxford-educated pride of liberal punditry professing to have no opinion on a primary means of funding what she considers a glorious legislative achievement.
Others pooh-pooh the significance of the cuts. They supposedly hit only “nonessential services.” This may be the first time in the debate over entitlements that Democrats have deemed anything related to Medicare “nonessential.”
What Democrats mean is that $156 billion of the cuts fall on the Medicare Advantage program. They have always hated this feature because it gives seniors access to private-sector coverage options. But seniors like it.
The Obama cuts also rely on grinding, year-after-year reductions in payments to doctors and other providers. This is a way to maintain that there are technically no changes in “benefits,” though access to and quality of care inevitably will be affected.
No one concerned with the health of Medicare would go about it in this fashion. But “Obamacare” was helter-skelter legislating, a desperate attempt to make the numbers temporarily add up.
Medicare’s actuaries consistently sound the alarm about the consequences. A May 2012 report by the Centers for Medicare and Medicaid Services said, “The large reductions in Medicare payments rates to physicians would likely have serious implications for beneficiary access to care.”
It also noted the punishing effect on hospitals, nursing facilities and home-health agencies, which “would have to withdraw from providing services to Medicare beneficiaries, merge with other provider groups or shift substantial portions of Medicare costs to their non-Medicare, non-Medicaid payers.”
Oh, is that all? If a Republican president had done this, The New York Times would have called for impeachment proceedings.
Is the Republicans’ counter-assault on Medicare hypocritical? No. How — not whether — to restrain Medicare is the question. The Democratic approach, now and in the future, is blunt-force price controls. Republicans want to get savings through competition and choice.
This is how the popular Medicare prescription-drug program works. The cost of the program is 40 percent below projections, as James Capretta of the Ethics and Public Policy Center points out, and the $30 per-month premium is only $6 more than in 2006…
Jake Tapper tries to pin down Jay Carney about Obama’s solution to Medicare.
Does the president believe Medicare is on sustainable path?
The president believes, and knows, and others have judged it so, that the Affordable Care Act that he fought for and Congress passed into law extends the life of Medicare by eight years, the solvency of Medicare by 8 years. He knows that, as outside experts have made clear, that if ACA is repealed as Republican leaders have ardently expressed the desire to do, Medicare’s insolvency will come 8 years sooner. That’s an irrefutable fact. He knows that as said in discussions, debates, proposals about steps to get our fiscal house in order, through a balanced approach of reducing our deficit, that we need to make additional reforms that protect beneficiaries but make sure that Medicare remains in place as Medicare, not a voucher system.
[W]e haven’t seen any proposal to make Medicare sustainable. Say what you will about the Ryan plan or Romney plan – I know you disagree with it – but it does look forward. Where is the president’s plan?
I think what the President said in this briefing room remains true today and in the budget proposal he put forward this year, which has additional savings out of federal healthcare spending. But what it does not do is attempt to get our fiscal house in order by placing the entire burden on the disabled or poor families with children . . . [T]he thing is we don’t have to do that. The president’s plan, other balanced plans that have been put forward, demonstrate that you do not have to do that. . . . if you’re willing to on the other side make some compromises that everyone should pay their fair share.
So you’re saying the president’s Medicare plan is contained in his budget?
The president has put forward additional savings in health-care programs, not by cuts in benefits but savings from providers and insurance companies . . .
That’s not really in itself a solution to Medicare.
I’m not saying that ends the discussion about our fiscal challenges, but it does achieve the $4 trillion in deficit reduction that we need and does it in a balanced way that includes savings in health care reform.
There was a small but instructive moment in 2010, the summer after the passage of the Affordable Care Act, that shows why Paul Ryan is so unusual for Washington.
A panel at the American Enterprise Institute featured Richard Foster, the Medicare actuary who estimates that ObamaCare’s $716 billion in Medicare cuts will cause one of six hospitals to become unprofitable. In the audience was Chip Kahn, the president of a for-profit hospital trade group that lobbied for ObamaCare, who stood up to defend the bargain his industry cut in return for 30 million new subsidized customers.
Mr. Foster noted that the cuts, which come via a technical change to Medicare payment rates, apply in perpetuity. But the hospitals only get the extra patients once, so the wedge between costs and benefits for hospitals widens over time.
“Well,” Mr. Kahn replied, “you can say, ‘Did you make a bad deal?’ Fortunately I don’t think I’ll probably be working after 2020.” When Mr. Foster pressed him, he joked again, “I’m glad my contract only goes another six years.”
This kind of short-range thinking—and intellectual exhaustion—dominates both parties and their many clients in Washington, in health care especially.Mr. Ryan’s political character has always been different. He saw before anyone else that one era of government was inexorably ending, and that if we want things to stay as they are, things will have to change.
In 2008, amid the poverty of ambition of the late Bush presidency, Mr. Ryan released “A Roadmap for America’s Future,” a 71-page document that was the first plan in years to take arithmetic seriously. The then-obscure Wisconsin congressman dropped by the Journal to sell his vision, no press secretary, no handlers. “I want to be the Paul Revere of the fisc,” he said, according to my notes from the meeting.
Mr. Ryan knew as everyone who knows the budget knows that the federal balance sheet can’t be improved by zeroing out foreign aid to Mozambique and arts funding for off-off-off Broadway plays. Medicare is such a large share of spending, and growing so much faster (more…)