Thanks to the Republicans’ lurch to the far-out right, they can at last be honest in their intentions if they get another chance at governing in 2010 or 2012. They no longer need hide in sheep’s clothing; they can now be more comfortable as what they are: wolves in wolves’ clothing. And that means they will do what they say if they get the chance.
That is to say, the present Republican leadership and its young new ideologues, have put pretense aside and now openly intend to destroy, during their next watch, the twin pillars of the nation’s public social insurance system – 75-year-old Social Security and 50-year-old Medicare.
If you think I exaggerate, check out their legislation, for H.R. 4529, introduced by the top Republican on the Budget Committee, Representative Paul Ryan of Wisconsin and S. 1240, introduced by the most right wing member of the Senate, Jim DeMint of South Carolina.
Some excerpts in a moment, but underlying the proposals, “Roadmap for America’s Future,” is the belief of the now-dominant right-wing of the Republican Party that Americans should be weaned from Medicare and Social Security to reduce the national debt, permit deep reductions in taxes for the wealthy, encourage self-reliance, personal responsibility and less dependence on government and while putting the billions in Social Security taxes to work in American enterprises, the stock markets, to build individual investment accounts instead of a pension.
Republicans, of course, have long advocated self-reliance and individual responsibility - when they opposed child labor laws and opposed Social Security during the Great Depression and Medicare and Medicaid in 1965. But they’ve been disguising their opposition partly because these programs have been so successful and popular with the hundreds of millions of Americans who have been made whole with medical care and pensions. And the Republican Party was closer to the main stream.
Thus, when Ronald Reagan won the presidency in 1980, he calmed the fears of older Americans when he promised to cut only “waste, fraud and abuse” in government. As a commentator, he had spoken in vigorous, ideological opposition to Social Security and Medicare – as the harbingers of socialism. But as president, Reagan left Medicare alone and in 1983, he appointed a commission that strengthened Social Security to build today’s $3 trillion trust fund for the boomers’ retirement. The Trustees say the trust fund will last until 2037, unless the recession drains it more rapidly.
More background: In 1994-5, when Southern Republicans under House Speaker Newt Gingrich of Georgia, his sidekicks Richard Armey and Tom Delay of Texas took over the Congress, their “Contract with America” noted that Reagan had been unable to end many federal programs and the contract proposed a “Personal Responsibility Act,” to end welfare for poor women. But the Contract refrained from frightening the nation for it mentioned not a word about Social Security - which Gingrich called “the third rail” in American politics - nor Medicare.
But Armey let it be known at a press breakfast that the Republicans intended “wean our old people away from dependence on Medicare.” An aide quickly denied Armey meant to kill Medicare. Gingrich told health insurers that the Medicare agency would “wither on the vine.” Eventually it became clear what they meant.
Under the Republican threats to slash Medicare, Bill Clinton agreed to allow private companies to sell Medicare policies, now called Medicare Advantage, which are heavily subsidized and serve a fifth of Medicare beneficiaries.
In 2003, George Bush took Medicare privatization further with the Medicare Part D drug benefit which is wholly private. That bill also put limits on Medicare’s budget growth and instituted a means test for the first time.
Some of that has been reversed in the Democratic Congress, but Medicare is more private than it has ever been, although the proposed health reforms would end most of the $250 billion subsidy for Medicare Advantage.
In 2005, Bush sought to build on his Medicare privatization with an attempt to turn Social Security and its trillions into millions of individual investment accounts. While no one, except Bush, was burned by the third rail, his effort failed partly because even Republicans were afraid of ending Social Security’s $650 billion a year in insurance and pension benefits.
But the opposition, which continues to denigrate and undermine Social Security, has grown bolder and more radical and has not given up.
Sensing new opportunities because of the deficits they helped create and the strain the recession has put on Social Security and Medicare, the Republicans and Democratic deficit hawks have set their sights on both programs as if all “entitlements” contribute to the deficit. Social Security, for example, is self-sustaining and only its administrative costs (one percent) contributes to the deficit.
Nevertheless, the “Roadmap for America’s Future” (a more appealing name than the legalistic “Contract With America,“) would end future Social Security protection for all persons under 55 and substitute a “Personal Social Security Savings Program” - that is, investment accounts like that provided by the government (federal employees now also get Social Security).
Incidentally, the trust fund would no longer be available to loan money to the treasury and thus earn money. Instead the trillions in the trust fund, which belong to you and me, would be “liquidated” and available for Wall Street.
Instead of the guarantees of Medicare, persons who will become eligible in, say ten years, would get an average of $11,000, in vouchers to purchase health insurance on the open market. That would be available through a newly merged Federal Hospital Insurance Trust fund and Federal Supplementary Medical Insurance Fund. You tell me if that would be enough insurance to last the rest of your life even if, G-D forbid you have a catastrophic illness. Funds would be slashed for the Part D drug program, which would be means tested and voluntary.
There is no mention of restraining the costs of premiums or regulating insurance companies’ practices; that would be a restraint on free enterprise. The clever part of the proposal would pit the old against the young who will be on their own and would no longer have to pay for their elders.
But imagine grandma or grandpa, when Medicare is no longer available, having to shop for coverage if they are already ill or disabled or suffering from dementia. Ask your parents what it was like before Medicare. Consider what would be lost if there was no longer any intergenerational responsibility.
But the juiciest part of the Roadmap, the one that will bring joy to the rich and appeal to fiscally conscious Republicans are the numerous tax breaks it proposes. It would end taxes on capital gains, dividends and interest, estate and gift taxes and the corporate income tax. (Unfortunately, President Obama has caved in to the deficit fears with his creation of a deficit commission and he even praised Ryan as a person with “ideas.”)
Finally, a page from Dickens and the 19th century workhouses: The bill would end, next January 1, the Children’s Health Insurance Program (CHIP), which the Congress passed over George Bush’s veto. You don’t believe Americans would do this to children? Look for the bills at GovTrack or OpenCongress.
Write to saulfriedman@comcast.net
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