Setting the Record Straight on Medicare, Budget Negotiations and Obama's Record on the American Social Compact

This morning, a report in Politico by  Jim VandeHei and Mike Allen made some pretty bold claims about the progress of the negotiations to avoid the fiscal cliff between the White House and House Republicans, or specifically, between President Obama and Speaker Boehner.
Cut through the fog, and here’s what to expect: Taxes will go up just shy of $1.2 trillion — the middle ground of what President Barack Obama wants and what Republicans say they could stomach. Entitlement programs, mainly Medicare, will be cut by no less than $400 billion — and perhaps a lot more, to get Republicans to swallow those tax hikes. There will be at least $1.2 trillion in spending cuts and “war savings.”
It's this $400 billion "cut" in Medicare that has liberals concerned. Some liberal members of Congress are getting out in front against entitlement cuts, and groups like MoveOn are losing their collecting bowel movements:
“If this report in Politico is correct, then some ‘senior Democrats’ are sorely misguided about where their base stands. So let me be crystal clear. Any benefit cuts in Medicare, Medicaid, or Social Security, including raising the retirement or eligibility age, are absolutely unacceptable,” [...]

“What’s worried some about the Politico article is that it kind of tossed in reforms or efficiencies along with talk about raising the Medicare retirement age or adjusting the cost of living adjustment — those two things would essentially start a nuclear war on the left,” [Adam] Green [the co-founder of the Progressive Change Campaign Committee] said.
Let me first re-iterate my stand that President Obama owes to whom MoveOn thinks are his base almost exactly as much as he owes Teabaggers. Which is to say, nothing. As for the Left's racist-in-chief Adam Green, his comments are as laughable as someone with sticks and stones threatening nuclear war. Also, yes, MoveOn is allowed to claim that slightly raising the Medicare eligibility age is a "cut" in benefits (i.e. it's a 'cut' in the length of time one can claim the benefit), but only if they are willing to also concede that every year of increase in longevity is an addition to benefits, thereby should the age be linked to longevity, the cuts and additions cancel out. That's not ideology. That's math.

The Facts on Medicare

But the bigger problem is that these people are looking at a false dichotomy: they look at any dollar amount cut from a federal program and believe that it means a cut in the amount of services and benefits people who are on the program actually receive. This isn't true, and there's an easy, recent example in Medicare to prove it: The President's Affordable Care Act slashed Medicare spending by $716 billion, and simultaneously, expanded benefits under Medicare by making routine screening free of copay and closing the prescription drug benefit donut hole. The $716 billion was cut out of subsidies to private insurers (Medicare Advantage plans) instead, resulting in, get this, a growth in Medicare Advantage enrollments.

There is another scare about Medicare and Social Security among fickle liberals: means testing. The argument is that means testing things like Social Security and Medicare would undermine their popularity, as people come to see them as just another welfare program. Nothing could be further from the truth. To a good degree, Medicare and Social Security are both means tested already. Social Security replaces a far greater percent of a low wage worker's income than those with high incomes. Medicare Part B premiums are calculated based on one's income, with the richest seniors having premiums over three times as high as average and low income earners. The kind of means testing being talked about here is raising slightly the premiums of seniors who make more than $85,000 a year.

Lots of other popular federal programs are also means tested, namely Pell grants and federal student loans, Medicaid, school lunches, heating assistance, assistance to AIDS patients from the Ryan White Act, tuition tax credits, and so on.. the list is long. None of those programs are unpopular because they are means tested. The idea that means testing hurts the justification or popularity of a needed social safety net program is patently absurd, and has been proven false.

As far as I am concerned, anyone who is more worried about protecting Medicare benefits in the Romney class than about the health and solvency of the program has lost all claim to represent the political Left.

The Art of Negotiating

The biggest thing here, though, gone largely unnoticed by the coverage is what Politico said about the negotiating posture of the president. Basically, on the cuts, the president isn't offering up anything, instead making the Republicans tell him what they want cut, how much, and how. Let's get back to the Politico column:
“Republicans want the president to own the whole offer upfront, on both the entitlement and the revenue side, and that’s not going to happen because the president is not going to negotiate with himself,” the official said. “There’s a standoff, and the staff hasn’t gotten anywhere. Rob Nabors [the White House negotiator], has been saying: ‘This is what we want on revenues on the down payment. What’s you guys’ ask on the entitlement side?’ And they keep looking back at us and saying: ‘We want you to come up with that and pitch us.’ That’s not going to happen.”
This isn't just a negotiating posture. I mean, sure, part of this is the optics - the president wants the Republicans to propose the starting point of the cuts, so that a bipartisan efforts is seemed to be made. But it is more strategic than that. By putting the Republicans in the position to propose the cuts, the president is challenging them to propose cuts that won't cause a public outcry the very minute the details are out. Which means they would have to propose something more moderate - read forcing them to abandon the Paul Ryan agenda of ending Medicare altogether.

If the Republicans come out with the first salvo in the cuts, it makes it that much easier to reach a deal, and even for them to claim a victory later, as the final proposal's cuts shape up to more aligned with their moderated proposal. The president wins by making them propose something moderate and working from there, and the people win by reaching a sensible solution.

Barack Obama's Record on the Social Compact

So once again, the Left needs to stop freaking out. This isn't the time to freak out. This is the time to back up the president. We need to give him maximum flexibility and leverage if we want him to succeed in making the best deal possible. You do not need to listen to anyone about what this president thinks of the social safety net, and what his commitments are to it. This president's record speaks for itself. Let me remind all of us:

  • This president enacted the largest expansion of the social safety net since Medicare. By enacting the Affordable Care Act, he established a public responsibility in paying for health insurance for those who cannot afford it, and enacted the largest health care subsidies in American history.
  • This president lengthened the life of the Medicare trust fund by eight years, also through reforms made in Obamacare. As noted above, the reforms also increased benefits in Medicare.
  • And once again through the Affordable Care Act, the president massively expanded Medicaid, by 2014 making anyone in poverty eligible for it.
  • This president signed into law the largest expansion of SCHIP, the children's health insurance program, adding 4 million children to the rolls.
  • This president expanded school lunches, Pell grants, student loans - the programs that help the less fortunate reach for opportunity and success.
It is fair to say that no one has done as much to expand and strengthen the social safety net as President Obama has, at least since Johnson, and probably since FDR. That's the record. This president is not out there to throw seniors under the bus. This president will not let the Republicans harm the social safety net pillars of American society. This president has put his presidency on the line to improve the lives of ordinary people, and he will do it again. He will not, however, cave to ideological pressure from either side to stay away from doing what he believes is right.

If you believe in fact based politics, and if you believe in trust earned, then by any empirical measure, this president should have your complete trust in protecting Medicare and Social Security in these negotiations. This president is not merely asking you to trust him. He has shown you why you should. When it comes to the social safety net and its long term prospects, our choice is clear: we can reform it and adjust it under the careful, watchful eyes of this president, or a future Republican president can gut it. The choice shouldn't even be close for anyone who believes in the American social compact.

I trust President Obama more than anyone on these negotiations, not because I have blind faith but because he has earned that trust. Frankly, a re-elected-in-a-landslide, re-energized president who has the country's approval on pursuing a balanced deal (both the Right and the Left please listen - a balanced approach includes both tax increases and spend cuts, not one or the other) does not need MoveOn to get a deal done. It would, however, be nice to have them work with him rather than against him.