Members seek deep cuts in Social Security and Medicare, refuse to consider new revenue options
By Jeremy Los
November 3, 2011 (Washington D.C.– Deep cuts to Medicare, Medicaid and Social Security are all on the table as the newly minted “budget super committee” in Congress works to slash trillions of dollars from the nation’s soaring debt.
The committee was established in a last minute deal on August 2 to prevent the U.S. from defaulting on its growing national debt. Members have until November 23 to find nearly $1.2 trillion in debt savings, pass a proposal and obtain approval by the full Congress-- or deep “trigger” cuts in both defense and social programs will be enforced.
The committee, made up of six Democrats and six Republicans, has been at largely the same impasse that Capital Hill was at back in August – what to do with the nation’s entitlement programs. Failure to meet the Nov. 23 deadline would trigger deep automatic cuts to military spending (roughly $109 billion a year) and to social services ( roughly $11 billion to Medicaid and $5 billion from programs like WIC and child welfare services ) – an outcome no party wants.
Ignoring the “occupy” movement message which wants the top one percent of income earners to pay a fair share in order to protect the interests of 99 percent of Americans, Republicans remain adamant about instead, drastically slashing programs to solve the nation’s debt problem. All six Republicans on the committee have signed Grover Norquist’s now infamous “Taxpayer Protection Pledge,” making it certain that they would not vote for any revenue increases through higher taxes or even closing tax loopholes.
One Democratic aide said, "Republicans are choosing a pinky swear with Grover Norquist over real solutions the American people need to create jobs and improve our economy."
On Monday, Speaker of the House John Boehner (R-Ohio) defended the GOP stance. “Nothing would send a more reassuring message to the markets than taking bipartisan steps to fix the structural problems in Medicare, Medicaid and Social Security,” he said.
Republicans on the super committee presented a plan last week that would trim the nation’s debt by some $2.2 trillion over the next ten years. The plan would call for even more tax cuts ($800 billion over the next ten years) including cuts in corporate and personal tax rates in an attempt to spur economic growth that it hopes would generate $200 billion in revenue. Republicans also proposed the selling of government assets and slashing government spending by $1.2 trillion.
The GOP plan gouges Medicare by some $500 billion –$400 billion of which will directly impact recipients through higher premiums and higher cost sharing – while also calling for $185 billion to be cut from Medicaid.
In the face of this attack on the nation’s poor, sick, and elderly, even Democrats – usually known for standing up for social programs – have buckled under pressure from Republicans by allowing these programs to be in the discussion to be cut.
“Everything is on the table,” according to committee co-chair Patty Murray (D-Wash.).
According to Thinkprogress.org, the plan proposed by the Supercommittee Democrats on October 26 is “well to the right” of other proposed bipartisan plans. The plan, which would look to cut the deficit by $2.5 to $3 trillion, would call for six dollars in spending cuts for every dollar in new revenue, a far cry from the two-to-one ratio proposed by the Bowles-Simpson proposal.
Much to the dismay of more liberal Democrats, the plan would include $400 billion worth of cuts (half of which come from reducing benefits to recipients) to Medicare while scrapping a plan to raise the eligibility age to 67. Democrats have also proposed $75 billion in cuts to Medicaid.
According to a study by the Kaiser Family Foundation, if a proposal to raise the Medicare eligibility age to 67 is operational by 2014 health care costs in America will be increased by over $5 billion.
“Democrats…are caving… this is bad policy and bad politics,” said Jim Dean, Chair of Democracy for America and brother of former Democratic presidential candidate Howard Dean. “Cuts like these are the worst possible way to reduce the deficit. They protect the status quo for the richest 1 percent while the 99 percent are expected to sacrifice vital healthcare…”
Cuts to Medicare and Medicaid will disproportionately impact low-income families. According to the Center on Budget and Policy Priorities, it would be “virtually impossible,” to achieve the level of beneficiary cuts wanted by Republicans and Democrats without substantial increases to out-of-pocket costs, due to the fact that nearly half of Medicare recipients had an income under $21,000 in 2010.
“As more and more people lose employer-provided health insurance, the last thing the nation's seniors, people with disabilities, and low-income children who depend on Medicaid need is for the federal government to slash these vital programs,” Dean continued.
In the eyes of most liberals, cutting entitlement programs should be the last option when it comes to slashing the national debt.
The announcement by President Obama on Oct. 21 to officially end the war in Iraq has been neglected as a cost savings factor by the committee. According to ABC News, the U.S. spends roughly $3.8 billion a month on the war and the Defense Department has obligated $704.6 billion on Operation Iraqi Freedom/ Operation New Dawn from the beginning of the war to July 31, 2011.
The Democrats plan also called for between $200 and $300 billion in stimulus spending as well as interest savings to pay for components of President Obama’s $447 billion jobs bill. The bill was defeated in the Senate 51-49, with all members of the Republican caucus as well as two members of the Democratic caucus – Joe Liberman (I-Conn.) and Ben Nelson (D-Neb.) – voting no.
The President’s jobs bill had called for investing to create jobs that, through the multiplier effect, were projected to revitalize the economy as those receiving jobs would in turn spend money and increase consumption. Republicans throughout Capitol Hill opposed the bill because of up-front costs.
But ironically, according to the nonpartisan Center on Budget and Policy Priorities, the Republican plan in the “budget super committee” would ultimately produce $1 trillion less deficit reduction than the Democratic plan.
“If these plans are measured from a current-policy baseline, the Republican proposal reduces deficits by $3.1 trillion over ten years while the Democratic offer reduces deficits by $4.1 trillion,” the Center concluded.