By Nathaniel Weixel
The Hill, December 6, 2017
House Speaker Paul Ryan (R-Wis.) on Wednesday said House Republicans will aim to cut spending on Medicare, Medicaid and welfare programs next year as a way to trim the federal deficit.
“We’re going to have to get back next year at entitlement reform, which is how you tackle the debt and the deficit,” Ryan said during an interview on Ross Kaminsky’s talk radio show.
Health-care entitlements such as Medicare and Medicaid “are the big drivers of debt,” Ryan said, “so we spend more time on the health-care entitlements, because that’s really where the problem lies, fiscally speaking.”
Ryan said he’s been speaking privately with President Trump, who is beginning to warm to the idea of slowing the spending growth in entitlements.
House and Senate Republicans are currently working on their plans for tax reform, which are estimated to add more than $1 trillion to the deficit. Democrats have voiced concerns that the legislation could lead to cuts to the social safety net.
Ryan is one of a growing number of GOP leaders who have mentioned the need for Congress to cut entitlement spending next year.
Sen. Marco Rubio (R-Fla.), last week, said “instituting structural changes to Social Security and Medicare for the future” will be the best way to reduce spending and generate economic growth.
Rep. Jeb Hensarling (R-Texas), chairman of the House Financial Services Committee, told Bloomberg TV that “the most important thing we can do with respect to the national debt, what we need to do, is obviously reform current entitlement programs for future generations.”
By Don McCanne, M.D.
Talk about chutzpah. Speaker of the House Paul Ryan is going to reduce our nations’ debt by attacking Medicare and other social programs at the very time he is increasing the debt by reducing taxes on the very wealthy when the profound inequities in income and wealth instead mandate an increase in taxes on the wealthy. Hurting seniors and persons with disabilities with program cuts while adding to he coffers of the rich is the ultimate manifestation of chutzpah.
The traditional Medicare program has been suffering from neglect while the private Medicare Advantage plans have been pampered. Ryan and his colleagues intend to introduce premium support – a voucher that decreases in value over time. Premium support vouchers would be used to purchase private health plans that over time would shift more and more of the costs of health care to the Medicare beneficiaries themselves. Medicare already has excessive cost sharing that makes health care less affordable, and this would make it even worse. It also would give an opening to the very wealthy to abandon Medicare as they seek their own care through private payment. Losing the support of this politically powerful sector would likely mean that Medicare would be transformed into a chronically underfunded welfare program, worse than Medicaid since the benefits would be spartan as well.
Ryan and friends are using the current deficit to dictate tax policy and spending policy. Deficits are reduced by increasing revenues (taxes) and/or decreasing spending. On the spending side, our budget is already relatively austere, and further reductions would largely be harmful. On the revenue side, we need more tax income to reduce the deficit. So their solution? Increase tax revenue by reducing taxes on the wealthy?! But this is a fallacy that has been discredited time and time again – most recently by Kansas.
Tax cuts will increase the deficits which then they can use as an excuse to cut spending. Medicare and Social Security are targets for these cuts since they are such large programs. But Ryan is not waiting for the deficits to increase. He already knows that they will. So he is calling for cuts this coming year.
When tax rates are too low, future governments can adjust them. But the structural changes that they want for a privatized Medicare would be very difficult to patch in the future. Although eventually we will enact a well designed, single payer, improved Medicare for all program, in the interim, the damage that they could do to the existing Medicare program could be devastating for those with current health care needs.
The tax cut that they intend to enact before Christmas will expand deficits to the extent that a political opening will have been made for their premium support privatization program. It is imperative that we let Congress know immediately that they must block these unfair tax cuts for the rich. Then our members of Congress will need to stand firm to guard against the Medicare voucher scheme.
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