Romney’s Pig in A Poke Tax Plan: Robin Hood In Reverse

Let’s be blunt and tactless about this — the numbers don’t add up. They have never added up. They never will add up.   We could be having a very honest debate about whether or not to privatize Social Security, or whether to transform Medicare into a voucher/coupon program in which Seniors would revert to buying their own private health insurance plans.  But, we won’t.  We could be having a discussion about spending for education, for nutrition programs, for veterans health care … but we probably won’t.  Let’s take a look at a handful of specifics.

Social Security

The Romney campaign won’t say “let’s privatize Social Security.”  Instead, he’s offering a plan which: “Would increase Social Security’s eligibility age by one month per year beginning in 2022 and index future program eligibility to life expectancy. He also wants to slow the rate of benefit growth for high-income recipients.”  [KCStar]

Who is living longer? The “people are living longer” theme is catchy.  However, it’s not a universal trend.  For example, we’ve known since 2006 that the life expectancy of most Americans is 77.9 years, but the life expectancy of a low income white person in Appalachia and Mississippi is 75 years.  For African-Americans in middle America the life expectancy is 72.9 years, however for African-Americans in high risk urban areas the life expectancy is 71.1 years.  Unfortunately, for Native Americans in South Dakota the life expectancy was reported at 58 years.  [DNCentral]   The trends are holding; a white male has a current life expectancy of 75.9 years, an African-American male 74.3 years. A white female can expect to live 82.4 years, but a black female can only expect 79.2 years.  [Census pdf] Thus, for white people in the U.S. the increasing longevity rate would tend to support raising the tables — however, for non-white citizens the numbers aren’t that congenial.

Then there’s the slow the rate of benefit growth for high-income recipients part — that’s a polite way to say means testing.   The AARP explains its opposition:

“The notion that the benefits are an earned right separates Social Security from means-tested income-support programs. Social Security can help everyone. Means testing is a feature of taxpayer-funded welfare programs designed to help the poor. A means test would inevitably erode the universal and contributory nature of Social Security and some of the popular support that has sustained it for nearly 75 years.”

Imposing new limits for the well-off could backfire in various ways. A means test could adversely affect retirement planning and lower the personal savings rate if people concluded the program would penalize them for having higher retirement incomes or larger nest eggs. It would discourage older persons from continuing to work beyond eligibility age, depriving them—and the economy—of additional money. It would create incentives for people to take lump-sum distributions from pension plans, strategies that could prove shortsighted and harmful.”

That just about sums it up.

Medicare

There’s nothing harder to analyze than a moving target.  If the Romney Campaign is incorporating “savings” into its tax formulation by assuming reductions in Medicare costs — good luck with that.  The campaign appears to have settled — for the moment — on the revisions made to the Ryan Plan for FY 2013.   However, the campaign hasn’t released the details necessary to make a thorough examination of the impact of the plan.  [Politifact]

“…there are two big differences between the new plan and the earliest one: The newer version allows beneficiaries under 55 a choice of using their payment to buy private insurance or a plan that acts like traditional Medicare. The amount of their payment would be set by the price of the second-cheapest plan.”  [Politifact]

Acts like traditional Medicare?  What is that?  Medicare Advantage?  Are Medicare Advantage really more cost effective — or do the plans tend to attract healthier (and wealthier) participants, and to avoid costs included in traditional Medicare such as supplemental payments to hospitals which take Medicare patients?  This is one topic in which numbers and terms are often massaged to present the ideology in the best possible light.  Enter the Free Market Fairy.

Aides to the GOP candidate say the plan would rely on competition — without caps or a cost-cutting board — to control spending and avoid cost shifts to seniors.”  [ABC]

IF competition were the magic answer to cost savings in medical programs for the elderly — then why doesn’t the Medicare Advantage program (the free market alternative to traditional Medicare) eschew the federal subsidy paid to insurance corporations to offer health care insurance to elderly people?  IF the Free Market Fairy could dust our landscape with health care insurance at lower cost than the traditional Medicare, why have any subsidy at all?

However, when the Affordable Care Act (Obamacare) sought to reduce the subsidies to the Medicare Advantage offering corporations, Republicans squealed about “cutting Medicare” to every elderly audience who would listen.

Medicaid

The cuts to Medicaid are far more profound than those for Medicare.   The Romney/Ryan plan could slash $1.4 billion over the next ten years — a cut of approximately 34%.  [Philly.com]   The discretionary spending cuts in total would look like this:

The CBPP explains:

“Medicaid and the Children’s Health Insurance Program (CHIP) would face cumulative cuts of $1.5 trillion through 2022 if Medicare is subject to cuts and $1.9 trillion if Medicare is exempt.  Repealing health reform’s coverage expansions, as Governor Romney has proposed, would reduce Medicaid spending by $618 billion over the next ten years and account for 30 to 40 percent of the reductions.  Repealing health reform by itself would leave uninsured 30 million people who would have gained coverage under health reform, according to CBO.  Analysis by the Urban Institute suggests that the additional Medicaid cuts would likely add at least 14 million to 19 million more people to the ranks of the uninsured.”

Medicaid now provides health care coverage for approximately 52 million Americans.  Over 13 million of these are individuals who are elderly or disabled.  It pays about half of all nursing home expenses, about 60% of nursing home residents are covered by Medicaid. 26% of Medicaid spending is for services to the elderly, 43% is for low income disabled persons, 12% is for low income adults, and 19% is spent for low income children.  [Kaiser pdf]  Now, which of these categories do we want to cut? Do we want to cut pre-natal care for low income women?  Cut funds for the care of the elderly in nursing homes?  Cut funding for the care of the disabled?

This is the program confidently cited by Governor Romney as the “safety net” for low income Americans this week:

ROMNEY: Actually, we had health care in America before Obamacare came along. And we still have health care in America…Each of us today in America has a choice of the type of health care plan we might choose. People who are poor are able to get Medicaid, which is a government support effort for those who can’t afford to have insurance. And these things aren’t going to disappear without Obamacare. [emphasis in original] [TP]

Really?  There’s that 47% again?  With the discretionary spending cuts illustrated the little graph from CBPP what chance do we have to maintain program services for Medicaid?  How do we accomplish this by cutting $1.4 billion, or 34%, over the next ten years.

SNAP

Thus much for being a Food Stamp President, actually the number of people enrolled in the SNAP program has declined since the Recession ended.


This hasn’t stopped the Romney Campaign from suggesting that the way to preserve the income of the top 0.1% is to reduce the SNAP program further  by $135 billion, or 17% in the next decade.   Note that when the economy is growing, as it is now, the SNAP spending is reduced:

The CBPP has done an extensive analysis of what the Ryan Budget proposal would do to, not for, 99% of the American people.   Governor Romney’s rhetorical flourishes about wanting prosperity for 100% notwithstanding, the budget and tax plans he is advocating knock the props out from under families with an elderly relative in a rest home, children of a family with one or more wage earners unemployed at the moment, elderly Americans seeking basic cancer screenings, middle class families trying to keep their offspring in college.  Unemployed Americans seeking job training to upgrade their skills and employability.  Or, veterans’ health care services. [CBPP]

And all this to protect the incomes of the top 0.1% of American income earners…

 

Comments Off on Romney’s Pig in A Poke Tax Plan: Robin Hood In Reverse

Filed under 2012 election, Medicaid, Medicare, Republicans, Romney, SCHIP, Social Security, Taxation

Comments are closed.