Medicare Eyed

President Obama's job speech (text here), Robert Kuttner notes, "was the right narrative and the right tone." It was a very good speech with a period of rhetorical flair which could have come from a Democrat. Sounding every bit the community organizer, Obama at approximately the two-thirds mark explained

But what we can't do - what I won't do - is let this economic crisis be used as an excuse to wipe out the basic protections that Americans have counted on for decades. I reject the idea that we need to ask people to choose between their jobs and their safety. I reject the argument that says for the economy to grow, we have to roll back protections that ban hidden fees by credit card companies, or rules that keep our kids from being exposed to mercury, or laws that prevent the health insurance industry from shortchanging patients. I reject the idea that we have to strip away collective bargaining rights to compete in a global economy. We shouldn't be in a race to the bottom, where we try to offer the cheapest labor and the worst pollution standards. America should be in a race to the top. And I believe that's a race we can win.

In fact, this larger notion that the only thing we can do to restore prosperity is just dismantle government, refund everyone's money, let everyone write their own rules, and tell everyone they're on their own - that's not who we are. That's not the story of America.

Yes, we are rugged individualists. Yes, we are strong and self-reliant. And it has been the drive and initiative of our workers and entrepreneurs that has made this economy the engine and envy of the world.

But there has always been another thread running throughout our history - a belief that we are all connected; and that there are some things we can only do together, as a nation.

We all remember Abraham Lincoln as the leader who saved our Union. But in the middle of a Civil War, he was also a leader who looked to the future - a Republican president who mobilized government to build the transcontinental railroad; launch the National Academy of Sciences; and set up the first land grant colleges. And leaders of both parties have followed the example he set.

Ask yourselves - where would we be right now if the people who sat here before us decided not to build our highways and our bridges; our dams and our airports? What would this country be like if we had chosen not to spend money on public high schools, or research universities, or community colleges? Millions of returning heroes, including my grandfather, had the opportunity to go to school because of the GI Bill. Where would we be if they hadn't had that chance?

How many jobs would it have cost us if past Congresses decided not to support the basic research that led to the Internet and the computer chip? What kind of country would this be if this Chamber had voted down Social Security or Medicare just because it violated some rigid idea about what government could or could not do? How many Americans would have suffered as a result?

But only a broad outline of the details of the President's program was given and, some say, "God is in the details." "Small businesses," the President stated, "will get a tax cut if they hire new workers or raise workers' wages." Whether the businesses will be eligible for a cut if workers are laid off and then rehired, or wages are increased while benefits are cut, was left unclarified.

Similarly, the President urged Congress to cut payroll taxes further and to extend the reduction to employers. It is not clear whether the resulting shortfall in Social Security revenues would be completely made up by a transfer of funds from the general budget. If so, Obama's idea is a good one, given that the payroll tax takes proportionately more from the working and middle class than from the wealthy, a decrease thus allowing taxpayers to keep more of their paycheck and stimulating the economy more than would an income tax.

The President also wants to stabilize the housing market, extend unemployment insurance a year, improve the nation's infrastructure, and send aid which would allow municipalities to rehire teachers. Hopefully, priority would be given to public, rather than charter, school teachers. Given, however, that 17,000 net public sector jobs- a huge chunk of them those of teachers- vanished last month, the funding is critical.

The greatest of all unanswered questions proceeds from President Obama's assertion "And everything in this bill will be paid for. Everything."

A few taxes are coming down, spending for job creation going up- and "everything in this bill will be paid for?" While there is understandable pleasure that $450 billion- probably $200 billion this year, according to Kuttner- is being directed to job creation, the origin of the money is somewhat unclear.

Not completely, however. Obama gave us a hint as to whose ox will be gored in the interests of satisfying deficit maniacs:

.... it's a balanced plan that would reduce the deficit by making additional spending cuts; by making modest adjustments to health care programs like Medicare and Medicaid; and by reforming our tax code in a way that asks the wealthiest Americans and biggest corporations to pay their fair share. What's more, the spending cuts wouldn't happen so abruptly that they'd be a drag on our economy, or prevent us from helping small business and middle-class families get back on their feet right away.

Now, I realize there are some in my party who don't think we should make any changes at all to Medicare and Medicaid, and I understand their concerns. But here's the truth. Millions of Americans rely on Medicare in their retirement. And millions more will do so in the future. They pay for this benefit during their working years. They earn it. But with an aging population and rising health care costs, we are spending too fast to sustain the program.

There are two components there: "reforming our tax code" which, to the party controlling Congress (if not the Executive Branch also) means reducing taxes for the wealthy and corporations; and "modest adjustments" to Medicare and Medicaid. Want to guess whether it's a) corporate America or b) elderly and/or poor Americans who will pay? Hint: The GOP controls the House. President Obama acquiesces to the GOP. Congressional Democrats acquiesce to Obama.

While he was giving yet another stirring speech, it might have behooved the President to explain that growing Medicare costs are not due to anything intrinsic to that program but simply-completely- to growing health care costs. Perhaps he might not have referred to a desire "to strengthen" what is a popular, effective, and strong, program. Instead, we have to destroy the village in order to save it:

And if we don't gradually reform the system while protecting current beneficiaries, it won't be there when future retirees need it. We have to reform Medicare to strengthen it.

Remember in a far-off galaxy when Democrats were exultant that House Republicans enthusiastically voted for a budget plan that would eliminate Medicare? The GOP handed its congressional opponents a campaign issue extraordinary in its generosity. Then Barack Obama put Medicare and Social Security "on the table" in debt ceiling negotiations, which

upset congressional Democrats, who saw a proposal from Rep. Paul Ryan (R-Wis.) to radically cut Medicare as an attack ad opening going into the Nov. 2012 elections. House Republicans voted for the Ryan proposal en masse, just months after hordes of GOP freshmen were swept into office amid advertisements vowing to protect the hugely popular entitlement program.

Democrats won an unexpected special election in New York earlier this year by attacking the Republican candidate, Jane Corwin, as an enemy of Medicare, based on her views on the Ryan budget plan.

President Obama has decided, apparently, that this is completely unacceptable.

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