I’m not sure the left should be as worried about President Obama’s deficit-cutting plan as Kate Pickert reports below…especially if, as advertised, he is going to propose higher taxes on the wealthy as a way to help close the gap. The flashpoint, undoubtedly, will be old age entitlements, and I doubt that he’s going to indulge Paul Ryan’s Medicare strategy in any way. Why?
Well, for one thing, it would be silly politically: 80% of the American people don’t want to see their Medicare benefits diminished–or their Social Security benefits, for that matter. Ryan has courageously put Medicare on the table, despite that polling data, but he’s about to learn that bad policy–and his is really inhumane–is never rewarded, especially when it comes to programs that affect the elderly.Why inhumane? For reasons that are usually not mentioned because they are considered politically incorrect. But let me tell you how terrifying his proposal would be to my 90-year-old parents–or their equivalents 20 or 30 years from now, when Ryan’s regret would kick in:
His plan suggests that if you force the elderly to make market choices–via the cleverly draconian notion of lowering their medicare payments from year to year (by not having them keep up with inflation)–they will choose wisely. Some undoubtedly will. Most will simply have to pay more out of their own pockets. But others will be preyed upon by the legion of bloodsuckers looking to confuse and mislead people whose acuity has grown foggy over time.
This is particularly inhumane given the realities of old age: health insurance coverage is one of the more complicated purchases any of us have to make–when it’s not being made for us by our employers or by the government. I can’t imagine my 90-year-old parents making informed market decisions about medical care. I can imagine them easily taken advantage of by direct-mail hustlers or tv shysters (indeed, I’ve seen this happen to them far too often as they’ve grown older).
So what should Obama propose? He should propose that doctors in the Medicare system are paid per patient (as is done in brilliant clinics like Leahy and Cleveland) rather than by services rendered.That would go a long way toward eliminating the unnecessary tests and procedures that are bloating our current medical budgets. The doctors lobby would not like this; but I’d rather propose something the doctors oppose than something that 80% of the American people oppose, as Ryan has–and there is, we all agree, a need for long-term budget-cutting. Obama could also raise co-pays (according to income, but a little bit for everyone) to discourage the overuse of the system by those for whom medical visits become the highlight of otherwise boring lives. (I’ve had some personal experience with this phenomenon, too.)
I’d also like to see the President flank Ryan–and also, by the way, those on the left who are opposed to any reform at all–by proposing a Social Security fix that would raise the cap on FICA taxes from the current $106,000 level to infinity, by annual $20,000 increments, starting next year. There are other fixes that can be made, but none–repeat, none–should involve a raising of the retirement age for those who’ve spent their lives doing physical labor.
Ryan has done a public service by opening the bidding on other, previously untouchable items–like farm subsidies. Everything is on the table now, which is a great thing. The President can reset that table, creatively, by returning to the Clinton era tax rates and eliminating a plethora of unneeded subsidies for the private sector, without conceding very much to the Republican crazies (polls show a solid majority of Americans in favor of higher taxes for the wealthy). He can use some of the money saved to lower the high nominal corporate tax rates (nominal because, well, you saw how much General Electric actually paid this year) and encourage investment in small companies developing new products. He can show that courage does not necessarily equal wisdom–and that wisdom and humanity, not ideological purity, are the qualities that most Americans expect on these sensitive topics.
But it is definitely time for him to put his cards on the table.