The second-largest share of domestic spending goes to Medicare, health-care subsidies for the elderly. It cost the federal government over $500 billion in 2009. According to CBS News, over 10 percent of that amount, about $55 billion, was paid to doctors and hospitals to keep patients alive during the last two months of their lives, “more than the budget for the Department of Homeland Security, or the Department of Education.” The report found “20 to 30 percent of these medical expenses may have no meaningful impact [on the patient’s health or longevity]. Most of the bills are paid for by the federal government with few or no questions asked.”
Together Social Security and Medicare make up 33 percent of the annual federal budget. With Medicaid, federal health care for the poor, entitlements account for about half of the budget. Those programs have to be cut if there is any genuine interest by politicians in reducing the federal debt. But as Congressman Paul Ryan and the Republican Party discovered, with their plan to trim Medicare and drastically cut Medicaid to pull in six trillion dollars in revenue over the next ten years, it is risky for a politician to open the door to charges of trying to kill Grandma by asking politically incorrect questions that challenge spending on people who are elderly, sick, and dying. Seniors vote in large numbers and they control a disproportionate share of the nation’s wealth. They contribute to political campaigns, write letters to the editor, and volunteer to work on political campaigns. AARP, the seniors’ lobbying group in Washington, is the largest lobbyist in the nation. And then there is the bizarre attack by seniors and their lobbyists on anyone questioning ever-escalating Medicare and Medicaid spending. The same seniors who lament big government and the spread of socialism act as if Medicare has nothing to do with big government and socialism. In fact, seniors object to attempts to reform Medicare as big-government disruption of the privacy of the doctor-patient relationship.
The simple truth is that the federal government has been at the center of the doctor-patient relationship as long as there has been Medicare. Medicare’s size and national reach over doctors, hospitals, HMOs, drug companies, and rehabilitation centers puts the government in control of health-care prices and policy. Call it what you will, but Medicare and Medicaid amount to a “government-run” program and by all definitions a socialist program. President Obama has told the story of getting a letter from a Medicare patient who wrote to him to say she did not want government-run health care or socialized medicine and then added: “And don’t touch my Medicare.” At a town-hall meeting held by Republican Robert Inglis of South Carolina, a senior asked the congressman to “keep your government hands off my Medicare.” When the Republican pointed out that Medicare is paid for and run by the federal government, the senior citizen countered that “he wasn’t having any of it.”
It is a politically inconvenient truth for that man in South Carolina because it does not fit with his anger at big government. But the truth it is. Without limits on Medicare, the program is taking the government on the path to insolvency by driving up the deficit and creating pressure for higher taxes.
The unaddressed issue at the center of every debate about Medicare, Medicaid, and Social Security is to what extent the federal government should be involved in providing social services to its citizens. Are those services necessary as a mediating force, a safety net against the excesses of a free-wheeling capitalistic society where people can fail, go bankrupt, get sick, get old, be hurt by the corruption on Wall Street and abuse of others? Or is fear of failure a sharp spur to hard work, competition, and retirement planning? And what about the futures of those who have failed and become street beggars, criminals, and the homeless? What about the blameless children of the poor, whether their parents are irresponsible people or simply the victims of layoffs, poor education, or a medical catastrophe (the biggest cause of families filing for bankruptcy)? What about orphans and widows?
Republicans have tried to argue that Democrats’ efforts to expand the social safety net are misguided adventures in socialism that encourage dependency. And yet Republican presidents, too, from Nixon to George W. Bush, have presided over large expansions of entitlement programs. Conservatives’ posturing against entitlement spending is not in keeping with the truth about their actions when they are in power and seeking votes. They can’t seem to have an honest conversation among themselves, let alone with the nation as a whole.
Democrats often try to close off the debate by dismissing critics of social programs with self-righteous screeds in which they portray themselves as defenders of the poor. They remind us that even the strongest, brightest among us are subject to the fortunes and misfortunes of life, from professional failure to devastating disease, injury, and, of course, old age and death. The Democratic base of unions, racial minorities, single women, and young people without houses and investments has every reason to try to slap aside any discussion of the limits of government help to those in need.
With neither side willing to compromise on the extent of the government’s role in providing a social safety net, for fear that it might lose money or political advantage, political paralysis has taken hold on a topic of critical importance to the nation. For a long time, politicians simply told one another that Social Security was the “third rail of American politics,” something to stay well clear of. For the first time, with the national debt becoming front-page news, that is beginning to change, but there’s a long way to go.
However, the cone of silence over Social Security spending is enforced by the votes of the senior citizens who get Social Security benefits. According to the Center for the Study of the American Electorate, people over sixty-five vote “at a rate of about 60 percent more than young people and about 10 percentage points higher than the national average.” Even ardent Republicans such as Tea Party members who oppose deficit spending and big government find a way to defend Social Security and Medicare spending. And as concern has grown about the fiscal instability of the Social Security and Medicare system, seniors have become more politically active in its defense.
In the 2010 midterm elections, one of the reasons seniors voted in record numbers against what Republicans labeled “Obamacare” was concerns about cuts to Medicare and Social Security. The result? Voters over age sixty-five gave Republicans an unprecedented twenty-one-percentage-point advantage over Democrats in those midterms.
“This is the first time in modern history that older people had their vote influenced by what is going on with old age benefits,” said Robert Binstock of Case Western Reserve University in Ohio. In the past, the political priorities and voting preferences of the elderly were much like those of every other voter.
The power of the senior lobby to protect its entitlement benefits was first hinted at during President Bush’s effort to reform Social Security in 2005. After winning his second term, President Bush proclaimed that he intended to use his political capital to reform Social Security to ensure its financial stability. Having been elected to a second term, President Bush risked challenging senior voters by starting a conversation about the ailing Social Security system.
His political advisers saw a possible political windfall in the effort. They told me they hoped to win the gratitude of senior voters by ensuring the solvency of their central retirement plan. Their goal was to make the senior vote the cornerstone of what they called a “permanent Republican majority.” The Bush White House also hoped to make inroads with blacks, a voting group strongly aligned with the Democrats, by making the case that the current Social Security system cheated blacks. In his memoir, the president later wrote: “Because their life expectancy was shorter, black workers who spent a lifetime paying into Social Security received an average of $21,000 less in benefits than whites of comparable income levels.”
The key to the Bush administration’s plan was to shift a portion of each worker’s Social Security money into a private savings account where it could be invested and benefit from market gains. He unveiled the plan in grand style during his State of the Union
speech. Within months the plan was doomed. The AARP, which had helped President Bush win votes in Congress to expand Medicare drug benefits in 2003, quickly distanced itself from the president. Democrats attacked the Bush reform plan as an effort to “privatize” the New Deal entitlement. Labor and civil rights groups opposed it as a plan that helped the rich while exposing retiring workers and minorities to the risky ups and downs of the stock market. Polls showed young people lacked enthusiasm for the reform effort because they did not believe the program had the financial strength to survive long enough to offer them benefits.
Politically correct thinking carried the day, and to the delight of the critics, President Bush’s plan was defeated and the conversation quickly died. It provided a clear warning to other politicians that the only acceptable, politically correct posture on Social Security was to leave it alone, despite rising life expectancy, ballooning health-care costs, and huge budget deficits.
The cautionary tale of Social Security reformers is a sign of the danger awaiting both parties if they broach the subject of the runaway cost of Medicare. One of the reasons President Obama and the Democrats suffered a record loss of congressional seats in 2010 for proposing health-care reform was that it included cutbacks on Medicare benefits available to people over sixty-five. That power to punish would-be reformers is growing as the number of seniors increases from the current 13 percent of the population to a projected 20 percent by 2030. Historically, Democrats, as heirs to the Roosevelt and LBJ legacies of creating entitlement programs, have scored better than Republicans when senior voters are polled on which party is more trusted to protect Social Security and Medicare. But the Democrats lost much of that advantage by advocating health-care reform.
There has been a long history of calls for a national healthcare system, of course. And all such attempts have been defeated. Presidents Theodore Roosevelt, Truman, Nixon, and Clinton all tried and failed.
But by the 2008 presidential campaign the issue of health care had come back to life. The high price of health care was a drag on the economy. General Motors complained that the high cost of health insurance for its workers was adding $1,500 to the sticker price of every car it sold. The rising prices also pushed the cost of Medicare and Medicaid higher, burdening the federal budget. Both presidential candidates, John McCain and Barack Obama, produced plans. The key goal was to reduce the cost of health care. By the end of 2009 health-care spending had hit a record high of 17.3 percent of the gross domestic product. The Centers for Medicare & Medicaid Services reported the biggest one-year increase in federal spending on health care since 1960. They also predicted even larger, budget-busting increases to come. Obama proposed requiring every American to have health insurance to bring more young, healthy subscribers into the system. McCain criticized Obama’s proposal as another example of big-government overreach because of the mandate for every citizen to have health insurance. McCain countered with a proposal to give people tax credits to encourage them to buy insurance.
After President Obama’s victory he made health-care legislation his top priority. In an address to a joint session of Congress in 2009, he offered a vision of increased competition among health insurers, lower prices for prescription drugs, and every American having insurance. He declared now was the time to get it done. Republicans strongly disagreed. When the president refuted criticism that his plan would give health-care coverage to illegal immigrants, one congressman, Representative Joe Wilson, yelled out, “You lie!” The unprecedented insult to the president of the United States was a deep tear in political decorum. It made headlines and hardened feelings. It set the tone for bitter, partisan battles as the House and Senate debated various ideas about a health-care plan. Republican leaders in Congress refused to even join in the discussions. They criticized the Democrats’ proposals as a “government takeover of health care.” Sharp rhetoric from Republicans about “socialized medicine” and potential tax increases tied to the cost of the reform succeeded in depressing public opinion of the proposals being considered by the Democrats. Representative Michele Bachmann, a Minnesota Republican and a leading voice of the Tea Party, declared that health-care reform was “the crown jewel of socialism.” Congresswoman Virginia Foxx, a North Carolina Republican, went to the floor of the House to proclaim, “We have more to fear from the potential of that bill passing than we do from any terrorist right now in any country.” The dispute allowed for no independent points of view that might have helped to resolve differences. When the nonpartisan Congressional Budget Office assessed the cost of the final reform bill, it announced that the bill would not add to the deficit. But the bill’s opponents said the calculation was wrong because it assumed that Congress would pass future cuts in Medicare spending to pay for part of the new plan.
A Tea Party movement, composed primarily of seniors and Republicans, emerged to condemn the health-care proposal. They labeled it a threat to Medicare and a likely cause for insurance companies to raise the premiums on insurance for all Americans. Sarah Palin, McCain’s former running mate, popularized the fallacious idea that the bill allowed federal experts to deny coverage to dying people if the care was expensive, calling them “death panels.” Democrats in return attacked the GOP critics. Congressman Alan Grayson, a Florida Democrat, accused the Republicans of not having any new ideas for the government’s role in providing affordable care to the sick. “The Republican health care plan is: don’t get sick.… In case you do get sick … the Republican health care plan is: die quickly.” The fury on both sides made it impossible to honestly debate the central issue of health care—its costs, its impact on the economy, taxes, and entitlement programs. When Congress went home for summer recess in August 2009, local town-hall meetings with constituents turned into angry confrontations as Tea Party activists, with support from the Chamber of Commerce and lobbyists who opposed the bill, poured vitriol on anyone who supported health-care reform. The president appealed for all sides to come out of their entrenched positions. “What we have also seen in these last months is the same partisan spectacle that only hardens the disdain many Americans have toward their own government.… Too many have used this as an opportunity to score short-term political points even if it robs the country of our opportunity to solve a long-term challenge. And out of this blizzard of charges and countercharges, confusion has reigned. Well the time for bickering is over.”
It did not halt the acrimony. President Obama had been slow to take control of the debate over health care as the proposal was debated in Congress. He wanted to give Democrats and Republicans the opportunity to put their stamp on the bill before he entered to strike a compromise. But Republicans responded by uniting in total opposition to negotiating. And President Obama’s slow entry into selling the need for reform to voters had a negative effect on public opinion. Polls consistently found most Americans opposed to the bill, including people who wanted health-care reform but felt the Democrats’ plan was too modest.
On the Republican side a familiar pattern emerged in the attack on President Obama’s health-care proposals. Kate Zernike, a New York Times reporter, in her book Boiling Mad: Inside Tea Party America, wrote, “Conservatives fell into the same positions they had during the Democrats’ last major effort, in 1993, invoking fears of health care rationing, long lines for treatment, and, in Sarah Palin’s warning, ‘Death Panels,’ that would coldly calculate whether Grandma got to live or die.” In fact, the same charges had been raised against healthcare reform going back to the era of Truman, whose healthcare plan was seen as a step into socialism.
What was different in the twenty-first-century version of the debate was the indisputable damage the high cost of health care was inflicting on the federal budget because of the rising number of ill and elderly people. Being sick in America is very costly. In 2010 there were forty-seven million Medicare beneficiaries. Even with federal money to help pay their bills, 90 percent of Medicare recipients needed private insurance to pay their medical bills. As Medicare’s cost
continued to rise, the unfunded liability of the Medicare system reached ninety trillion dollars. The annual report of Medicare’s trustees modified this figure to thirty trillion dollars, based on the Affordable Care Act’s promises to limit price increases and cut spending. But many observers felt those promises were unlikely to be met.
Health-care costs today account for 17 percent, or one sixth, of the nation’s economic activity. Doctor visits, prescription drugs, medical testing using the latest high-tech equipment, and hospital administration add up fast. They make the cost of getting health care in America by far the highest in the world. Yet for all the money we spend, the United States does not rank high on health-care outcomes as compared to other nations. The CIA World Factbook for 2010 ranks the United States only fiftieth in life expectancy and 176th in infant mortality. In a comparison of first-world nations—Australia, Britain, Canada, the Netherlands, New Zealand, and the United States—the United States ranked dead last. The nonprofit Commonwealth Fund reported that in 2007 the average health-care spending per person in the United States was $7,290, more than twice any other country surveyed.
While Americans are more likely to be obese than people in other developed countries, other nations had higher rates of smoking and some had older populations. Considering all those factors, the study found Americans are the most likely population in any developed country to go without health care because of the high cost. And Americans had more difficulty gaining access to primary care and after-hours care, according to the study. Every other system covered all citizens; in the United States forty-six million Americans, 15 percent of the population, had no health insurance. These findings are consistent with a 2000 World Health Organization report: “The U.S. health system spends a higher portion of its gross domestic product than any other country but ranks 37 out of 191 countries according to its performance.”
Juan Williams Page 13
