America’s budget deficit has given Republicans and tea party representatives in the House and Senate a reason to propose cuts to important programs that provide safety nets for disadvantaged Americans, children, and elderly citizens. The House majority Republicans have also proposed cuts to agencies that ensure the safety of our food supply, medicines, air travel and early warning programs for earthquakes and extreme weather events.
It is well known that Republicans’ cuts will cost Americans between 700,000 and one million jobs as well as deny women the right to make choices concerning their own reproductive health. One subject that continues to be a source of aggravation is entitlement spending. Republicans still label Social Security an entitlement program that necessarily requires fixing because Republicans claim it contributes to the budget deficit which is patently false. On Tuesday, House Budget Committee Chairman Paul Ryan (R-WI) unveiled a Republican budget plan he calls Path to Prosperity that includes a plan that would privatize Medicare, cut taxes for corporations and the wealthy, as well as decimate programs like the Affordable Health Care Act.
Republicans and conservative think tanks have heaped praise on Ryan’s plan calling it the most courageous, important and necessary piece of economic legislation since Ronald Reagan’s tax cuts in 1981. Americans with a memory remember how successful Reagan’s “supply-side economics” turned out, and most people who were alive at the time are still waiting for the trickle-down effect from Reagan’s disastrous entitlement program for corporations and the rich. The most outrageous part of Ryan’s Path to Prosperity is privatizing the government’s Medicare program. It is regarded as a highly successful program that provides comprehensive health coverage to the elderly, disabled, children, and low-income adults.
Conservatives are not calling Ryan’s plans for Medicare privatization, but there is no other word to describe it. Under Ryan’s plan, retirees will be given a voucher worth a set amount to go on the open market to buy their own health plan from private insurance companies. According to the Congressional Budget Office (CBO), private insurance is likely to be more expensive than insurance run by the government and could lead to health care rationing. During the health care debate, one of the Republicans’ arguments was the health law would lead to rationing by the government. The CBO’s analysis also suggested that moving Medicare beneficiaries to private insurance may actually slow the introduction of new and potentially life-saving medical technology. Private insurance companies would be inclined to bring down health spending and limit the procedures available to seniors. Since seniors living on a fixed income would be paying more for coverage, they would be inclined to forgo certain testing and procedures that are more expensive in an effort to save money for food and housing.
Ryan’s plan will also shift an inordinate burden onto states as well as beneficiaries because states would receive fixed-amount Medicaid block grants instead of a fixed share of the total costs for health care. Since states would get a fixed amount, when costs rise, individual states will have to cut benefits and services for the most vulnerable populations in society. Under Ryan’s plan, because states would receive less funding for healthcare, they will have to cut other programs like education and transportation as well as raise taxes. The only winners in Ryan’s plan are private insurance companies.
The CBO has also concluded that Ryan’s plan would result in the loss of 2.1 million jobs over the next five years. Medicaid and Medicare have an extremely low overhead and about 96% of the program’s funds go toward benefits that are spent in the private sector. Private insurance companies, on the other hand, have higher overhead and in an effort to cut costs, will either slash benefits or jobs to maintain their profit margin. Overhead costs include labor as well as equipment and supplies that are provided by the private sector. It is also worth noting that because Medicaid generally benefits low-income families, they are more likely to use the money for consumption rather than health care insurance.
On NPR’s “Talk of the Nation” program, Alison Acosta Fraser of the right-wing think tank Heritage Foundation said that Ryan’s plan to privatize Medicare was not really privatization or a voucher system. She said, “You say voucher. I think it’s really more a premium support for individuals to be able to go out into the private market and buy their own health care.” Fraser went on to say that Social Security needs a similar fix to Ryan’s plan for Medicare because Social Security is a big part of the budget deficit. Fraser is supposed to be an acclaimed economic strategist so she should be aware that the Social Security Trust does not impact the budget in expense or revenue. The Heritage Foundation would like the Social Security Trust to hand over nearly $3 trillion in reserves to Wall Street.
The Heritage Foundation that really wrote the courageous budget proposal has made it clear that controlling costs and spending is necessary to bring some solvency to the government. Yet, in Ryan’s budget, seniors, disabled, children, and low-income adults are taking the hit so that corporations, the oil industry, and the extremely wealthy will get more tax cuts. It is worth mentioning that Medicare is funded by workers and not the government. Seniors and all working Americans have paid for their Medicare benefits just so Republicans, at the direction of the Heritage Foundation, can take Medicare funds to give to corporations and special interest groups. It is grand larceny and any working American who supports Congressman Ryan’s budget proposal needs to look at their paychecks to see for themselves that they are paying in to Medicare for health coverage in their golden years. However, if Republicans and the Heritage Foundation have their way, every last penny of contributions will be handed over to billionaires like the Koch Brothers and their corporate buddies.
A right-wing pundit asked, “If the Medicare program is so successful, why are Republicans attempting to privatize it?” His answer was that it’s because Medicare, like Social Security was an entitlement that was responsible for the budget woes the country is experiencing. The truth, though, is that Republicans see that successful programs like Social Security and Medicare have money they can funnel to private insurance companies and investment bankers as well as extremely wealthy Americans in the form of permanent Bush-era tax cuts. It is a travesty that corporations like General Electric and many of the largest banks in the country are paying no taxes or contributing anything to America and yet Republicans are making a serious attempt at stealing Americans retirement and health contributions to dole out to corporations. If Republicans were serious about the budget, they would stop the subsidies to big oil and increase taxes on the wealthy and corporations.
It should be apparent to any thinking American that Republicans in Congress are stealing their money, cutting education, and programs for the poor and middle class in order to enrich their corporate donors. By the time supporters of Congressman Ryan’s budget proposal realize their Medicare contributions were stolen and given to corporations, they will have been made destitute with no safety nets to save them. They will not be alone because in five years, 2.1 million unemployed workers will be on the streets living in cardboard boxes with them and they will all be without healthcare or medicine; but America’s corporations will be very healthy indeed.