EDITORIAL

Sic Seniors on GOP

House Republicans voted April 15 to turn Medicare into a voucher program that would deny seniors the guaranteed benefits that have made it a lifeline for older Americans. House Budget Czar Paul Ryan (R-Wis.) plans to use the money saved by Medicare cuts to pay for further tax breaks for the wealthy and corporations.

After Democrats passed the health care reform bill last year that cut $500 billion in wasteful subsidies to private insurance companies in the Medicare Advantage program, Republicans claimed in their campaigns that Democrats had cut half a trillion dollars from Medicare. Republicans lied to seniors last year when they said they would protect Medicare — after the GOP has worked 46 years to repeal Medicare. Then, after they got control of the House with 58% support of seniors last year, Republicans voted for a budget that, among other things, privatizes Medicare. Seniors would get vouchers and have to hunt for insurance companies that were willing to cover them — Good Luck!

And even with draconian cuts — including, among other things, a 20% cut in food stamps that will leave children hungry and will reduce sales at local grocery stores — the Republican budget still adds $6 trillion to the national debt in the next decade — mainly because they refuse to touch military spending and they refuse to hike taxes on the rich and/or corporations.

During the Easter Break, those older voters were making their way to town hall meetings to demand an explanation of their GOP Congress members who dared to show their faces.

Ryan was booed by his constituents at town meetings in Wisconsin for defending tax breaks for the wealthy.

Republicans are still threatening to hold hostage the increase in the national debt ceiling until Democrats agree to further budget cuts. But the only concession that Senate Democrats should make to Republicans is that Senate Majority Leader Harry Reid (D-Nev.) will bring up the House budget for a Senate vote.

Let Senate Republicans go on the record with their support for the gutting of Medicare and Medicaid. And if any Democrats decide that they want to hang their hat on the dismantling of those programs, it would be good to learn that, too, so that their replacements can be found in plenty of time for the 2012 ballot.

With 23 Democratic seats up for election next year, and at least five of them open due to retirement, Republicans had high hopes of recapturing the majority in the Senate that is now split 53-47. But forcing Republicans to vote on privatizing Medicare could allow Democrats to go on the offense, as they already have in the House. It would put on the spot Republican Sens. John Barrasso (Wyo.), Scott Brown (Mass.), Bob Corker (Tenn.), Orrin Hatch (Utah), Dick Lugar (Ind.), Olympia Snowe (Maine) and Roger Wicker (Miss.), all of whom are up for election next year and don’t need outraged seniors in their faces. It also could make protecting Medicare and Social Security a top issue in open races now held by Republicans in Arizona, Nevada and Texas.

After that roll call is out of the way, the Senate should bring up a budget that reflects many of the elements from the People’s Budget, proposed by the House Progressive Caucus.

President Obama’s budget calls for two-thirds spending cuts and one-third revenue increases. It backs off from stimulative government spending. It would be considered conservative by any reasonable measure, but a bipartisan “Gang of Six” senators is working on a compromise that would be further to the right.

We fear that Sen. Dick Durbin (D-Ill.), the most progressive member of the Gang, is on a fool’s errand in hoping to steer a “grand bargain” between the conservative budget outlined by Obama and the right-wing House Republican budget. The Gang, which also includes Democrats Mark Warner (Va.) and Kent Conrad (N.D.) and Republicans Tom Coburn (Okla.), Mike Crapo (Idaho) and Saxby Chambliss (Ga.), reportedly is negotiating a plan that would cut Medicare, Medicaid and Social Security and put spending caps on domestic spending along with tax increases that will be so modest as to be useless.

Durbin has bought into the scaremongering about Social Security. “In 2037, as we know it, Social Security falls off a cliff,” Durbin told ABC News. “There’s a 22% reduction rate in payments, which is really not something we can tolerate. If we deal with it today, it’s an easier solution than waiting. I think we ought to deal with it.”

In fact, Social Security does not fall off a cliff in 2037 unless the US remains in a recession for the next 20 years. That shortfall in the Trust Fund assumes an economic growth rate of 2.1%, which is one-third less than the nation’s 3.2% average economic growth over the past 50 years. If economic growth averages 2.9%, as it did in 2010, the Social Security trustees reported the retirement plan would be able to pay all promised benefits for at least the next 75 years. But even with the more pessimistic growth rate, the Trust Fund could remain fully funded by removing the $106,800 cap on taxable income, so that corporate executives pay the same payroll tax rate as minimum wage earners. If the economic growth rate holds at 2.5% or higher, the extra income from doing away with the cap would help increase benefits or reduce the retirement age.

The People’s Budget actually reaches a balanced budget by 2021 largely through tax hikes and cuts in military spending. It provides $1.7 trillion for education, green energy jobs and other public works jobs to help us pull out of this recesion.

It brings our troops home from Iraq and Afghanistan to make room for $1.8 trillion in defense cuts. It increases taxes by $7 trillion over the next decade, mainly by allowing the Bush-era tax cuts to expire, but it proposes a progressive estate tax that would exempt 99.75% of all estates but tax up to 65% of portions of estates worth over $500 million. And it would tax capital gains as ordinary income.

It also proposes a leverage tax of 0.15% of covered liabilities on large financial institutions, as an incentive for large firms to decrease their liabilities. It would impose a small tax on transactions of exotic financial products, such as credit default swaps, futures and forwards transactions, option premiums and foreign exchange spot transactions. It would eliminate tax breaks for oil, gas and coal producers and reinstate Superfund excise taxes on chemical production to finance cleanup of hazardous waste. It also would tax US corporate foreign income as it is earned, rather than allowing corporations to park foreign earnings offshore.

The People’s Budget restores the public option for health care, which the Congressional Budget Office estimates would reduce the deficit by $26.7 billion, and it allows Medicare to negotiate with pharmaceutical companies for lower drug prices, which would save Medicare an estimated $157.9 billion over the decade. It recognizes that Social Security is not part of the deficit problem, but it raises the cap on taxable wages to $170,000.

The People’s Budget also proposes a National Infrastructure Bank that could leverage private financing to help rebuild highways, bridges and water systems and develop high-speed rail and clean energy projects. Such a bank originally was proposed in 2007 by Sens. Christopher Dodd (D-Conn.) and Chuck Hagel (R-Neb.) and was backed by President Obama in 2008 and again in 2010, but got nowhere. Rep. Rosa DeLauro (D-Conn.) proposed a similar bill to set up the bank in the last Congress, and is back again with HR 402.

House Progressives made an excellent start with the People’s Budget. Senate Dems should take it to heart and hold their GOP colleagues’ feet to the fire. Republicans running for state legislatures also should be quizzed on how they plan to provide health-care for working people and seniors if Medicare and Medicaid are cut, as congressional Republicans propose.

Let 2012 be a referendum on protecting Medicare, Medicaid and Social Security, and whether the rich should pay their fair share of the national debt. In that case, things should sort out just fine for Barack Obama and the Democrats. — JMC

From The Progressive Populist, May 15, 2011