The deal brokered by Congress and the White House and signed into law by President Obama on Tuesday ties an increase in the nation’s debt ceiling to nearly a trillion dollars in short-term spending cuts, as well as trillions more in slashed government spending yet to be determined.
This massive scythe of austerity so far has avoided changes to Social Security and Medicare, although the president had been willing to acquiesce to demands from House Republicans to put cuts to safety net programs in a “grand bargain” debt deal. Those plans broke down, and a less sweeping deal was reached that did not touch “entitlements.”
But with trillions of dollars in spending reductions mandated for the next ten years, and tax hikes taken off the table by the Republican majority in the House, could Medicare and Social Security be placed on the chopping block sooner than later? Yes.
Safety net programs, or “entitlements,” as their critics like to call them, will likely be the main focus of the congressional “super committee” created in the debt agreement to find at least $1.5 trillion in spending cuts over the next decade.
With minimal savings in defense spending already achieved in the more immediate section of the debt deal, and with Republican and many Democratic lawmakers unwilling to take on the Bush tax cuts or corporate tax loopholes that could save trillions of dollars, the government safety net is virtually the only place the so-called “super Congress” will be able to pilfer for debt reduction.
Medicare and Medicaid are especially at risk, with House Republicans famously passing the plan espoused by Rep. Paul Ryan that would impose massive cuts and changes on both health care programs.
Advocates for both Medicare and Medicaid warn that the debt deal will lead to “deep cuts and irreversible changes” to both Medicare and Medicaid that “shift costs to beneficiaries.” Hospitals say such cuts could lead to major reductions in access to care, a “blood on the floor” scenario.
When it comes to Medicare and Medicaid, the debt deal raises more questions than it answers.
The giant health care programs serving some 100 million elderly, low-income and disabled Americans were spared from the first round of cuts in the agreement between President Obama and congressional leaders. But everything’s on the chopping block for a powerful new congressional committee that will be created under the deal to scour the budget for savings.
And if that hunt leads to a dead end, the agreement decrees an automatic 2 percent cut to Medicare providers such as hospitals. That’s on top of a 6 percent cut already enacted to finance Mr. Obama’s health care law, which is just being phased in.
“The story isn’t over,” said Joe Baker, president of the Medicare Rights Center, a New York-based advocacy group. “The future of the programs really hangs in the balance. It could lead to deep cuts and irreversible changes to Medicare and Medicaid that shift costs to beneficiaries.”
The hospital industry, which agreed to cuts of $150 billion to help pay for Mr. Obama’s expansion of coverage to the uninsured, said Monday it’s just about had it.
“America’s hospitals find it difficult to support a debt ceiling proposal that could negatively affect Medicare for our nation’s seniors,” American Hospital Association president Rich Umbdenstock said in a statement. “Access to care could be curtailed by further cuts to Medicare funding for hospital care.”
The debt deal would allow the government to keep borrowing and stave off an unprecedented default on obligations to investors, Social Security recipients, federal employees and others. But it comes at the price of squeezing the budget in ways that average Americans may not yet realize.
The first $900 billion in savings from the complex deal are not likely to have much impact on health care. It’s the second round that counts, from $1.2 trillion to $1.5 trillion over 10 years.
“These guys haven’t really solved anything — they have only set up a procedure to make cuts,” said Robert Laszewski, a health care industry consultant. “We haven’t seen the blood on the floor yet.”
The deadline for a deal to be reached by the “super committee” on the $1.5 trillion in cuts is by the end of November, leaving advocates for seniors and low-income Americans scrambling to convince the White House, the leading proponent of such cuts as a “compromise” with Republicans, to save Medicare and Medicaid.
Even without the sharp scissors of the “super Congress” and its mandate to strip trillions in government spending, the future of Medicare hangs in the balance as the “Tea Party” caucus of the GOP pushed ever more aggressively for sweeping, revolutionary changes to America’s safety net programs.
Town halls held by members of Congress this month are expected to be packed with Tea Party activists and members of well-organized Tea Party political operations allied with the GOP. Their main focus will be on convincing Republican leaders in Congress to more enthusiastically embrace an agenda of cuts and fundamental changes to Medicare, demanding “real policy solutions” that would kill the basic structure of safety net programs.
Social Security may also be threatened, with the “super committee” created by the debt deal also expected to look beyond Medicare to squeeze savings out of the government safety net.
Like Medicare, Social Security is protected in the immediate round of nearly a trillion dollars in spending cuts. But after that, it’s fair game. The “super committee” will have the authority to basically impose any changes on “entitlements” it wants. For Social Security, that could mean sharp cuts in benefits through a reduction or elimination of cost-of-living adjustments for beneficiaries.
And the threat to Medicare, social Security and the entire government safety net lies not just with Tea Party Republicans or the “super committee” backed by the White House. Sen. Joe Lieberman has said he is working on his own plan to “secure” Social Security “over the long term,” a hint at privatization, a spike in the retirement age, and deep cuts to beneficiaries of all income levels.
The reason that “we can’t protect these entitlements,” Sen. Lieberman says, is that it is imperative to “have the national defense we need to protect us in a dangerous world while we’re at war with Islamist extremists who attacked us on 9/11 and will be for a long time to come.”
I want to indicate today to my colleagues that Senator Coburn and I are working again on a bipartisan proposal to secure Social Security over the long term, we hope to have that done in time. To also forward to the special committee for their consideration. So, bottom line, we can’t protect these entitlements and also have the national defense we need to protect us in a dangerous world while we’re at war with Islamist extremists who attacked us on 9/11 and will be for a long time to come.
Like I’ve said over and over again, Obama and the Democrats will cave…they always have, and they always will. They have no spine.
Entitlement reform = stealing. When anyone talks about using Social Security to help balance the federal budget, they need to call it what it is: stealing. Social Security does not contribute to the deficit, and the trust fund can only be used to pay out Social Security benefits–unless you steal from it first. When will someone ask just how they plan on doing that?
When did Obama say that he was going to cut medicare and SS? Why are people continuing to peddle this lie over and over? It’s the Republican party who wants these cuts, and Obama strategically “agreed” to put everything on the table, tying the cuts to tax hikes on millionaire/billionaires, knowing fully well it was not going to happen.
Why in heavens name are we, the people of this “great” nation, letting the government even talk about, not to mention, have already put cuts in social security and medicare? It seems to me that if they would cut just a tenth of what all the senators and everybody else in Washington make a year, not to mention all the free health care for them and their families, there would be no need to look elsewhere for savings.
You need to leave medicare medicad and social security alone Obama. You make it hard for the poor and disabled people to live. Please have compassion on the poor and disabled people. All the cuts for the debt needs to come out of your pocket plus all of the people in congress along with all the other rich people.
Gee no wonder , please some one post the billions taken out of medicare and S.S fund over the past 20yrs then that money was put in the GP or general fund and spent by our goverment … please state the other vacts too, it dont help ,many are on it that have never worked in the u.s.a .