Government Shutdown to Repeal Medicare?

"The struggle of man against power is the struggle of memory against forgetting."—Milan Kundera, novelist

"This isn't a budget, it's a 'cause.' "—Congressman Paul Ryan (R-WI) 

Sometime in the next few months, likely in the doldrums of the summer "news hole" usually filled with predictable vacation season "follies," the Republican-controlled Congress is going to force a government shutdown over the U.S. debt ceiling. That's not just my opinion, but the considered opinion of longtime budget observers like Stan Collender.

This is despite the apparent wild unpopularity of the Ryan GOP budget plan for 2012 that was voted on and adopted by the Congress last week. When voters and constituents begin to understand that it involves drastic Medicare and Medicaid cuts and essentially ends both programs as we know them, even 70 percent of the self-identified Tea Party folks are against it.

Overall, recent polling by both Marist College and ABC News show that Ryan's GOP budget and the draconian Medicare cuts are opposed by about 80 percent of the public.

Perhaps folks recognize that as the esteemed budget analyst Robert Greenstein notes at CBPP.org: "Taken together, its proposals would produce the largest redistribution of income from the bottom to the top in modern U.S. history, while increasing poverty and inequality more than any measure in recent times and possibly in the nation’s history."

Further, Greenstein comments, "In health care, the Ryan plan’s changes would push tens of millions of Americans into the ranks for the uninsured and underinsured—and create more of a two-tier health care system in which health care is increasingly rationed by income." Concluding, "The plan contains $1.4 trillion in Medicaid cuts over 10 years (which includes repeal of the health reform law’s Medicaid expansion)."

As I've mentioned in this space previously, despite all this, Ryan's mystical budget does not actually balance the budget any time soon and is more of an ideological assault on the welfare state to try to finally dissolve it once and for all. Of course, there's plenty of tax breaks for the wealthy (almost another trillion dollars) somehow required here to "soak up" and justify all the proposed "savings" from repealing Medicare for everyone under 55.

Charlie Cook, another longtime political reporter and handicapper, has called this merciless mercurial maneuver "political suicide" in his considered analysis.

Another observer had this to say, "As outlined last week by House conservative wunderkind Paul Ryan, the GOP would finally get its revenge on Lyndon B. Johnson and the Great Society lawmakers—46 years is a long wait, but the GOP is very patient—by taking down Medicare as we know it. The party would basically abolish federal health care for seniors (in which the government is the insurer) and replace it with a private insurance program in which the government would provide subsidies (via vouchers) to the privatized seniors."

And those vouchers would now only start at age 67 under the GOP plan.

People forget that Medicare and Medicaid exist today out of necessity because of dramatic market failures. Prior to 1965, most elderly people simply could not afford health insurance (then known as "hospital insurance") and mainly went without.

Further, most insurance companies today would not cover the poor or elderly; there's just not enough profit in it. The margins necessary for them to operate would necessitate huge, unaffordable premiums, as some are paying now for even limited individual coverage in this badly broken market. These premiums are absolutely impossible to maintain on a retirement income, anywhere.

What happened when you did inevitably get sick when older and needed health care? In the "good old days" prior to Medicare and Social Security, you were commonly driven into bankruptcy if you needed or required hospitalization or extended nursing care. This is no longer a worry for most of our elderly and retired citizens thanks to the reforms and successful social insurance programs implemented by great Democrats like LBJ and FDR. 

Still among the most common reasons for bankruptcy today for the under 65 set are indeed those same medical bills that used to plague and haunt the elderly of prior generations. Ryan and the GOP want to return to those "sturdy" 19th Century traditions, obviously.

Family values once meant that once mom and dad or grandparents got too sick and too old to work, you took them in and cared for them. That might mean some significant family disruptions and certainly extra costs, but to the GOP, it'll all be worth it all to balance the federal budget some 30 years hence! []

There are several interesting moving parts to this Ryan budget monstrosity, not the least of which is that not only would it absolutely violate the GOP's proposed Balanced Budget Amendment, but it would also require the debt ceiling to be increased some $6 trillion!

As Matt Miller notes for the Washington Post, "The House Republican budget adds $6 trillion to the debt in the next decade yet the GOP is balking at raising the debt limit." He also notes the rampant hypocrisy in the Ryan plan that paradoxically "would add more debt than we’ve ever seen over a 10-year period in American history," (that due to the immediate and inevitable GOP tax cuts for the wealthy).

Miller finishes with a flourish: "The classic definition of chutzpah was a kid who kills his parents and then asks for the mercy of the court because he’s an orphan. The new definition of chutzpah is Republicans who vote for the Ryan plan that adds trillions in debt and who then say the debt limit goes up only over their dead bodies."

As MIT economist Simon Johnson puts it, that headline should now read "Fiscal Conservatives Dodge $10 Trillion in Debt." Conservative used to mean honoring your obligations, standing up to problems and living up to your past commitments, spending and debts, right?  

"But the political elite that now profess to be bothered by the fiscal deficit made no serious effort to make the financial sector any safer after the events of September to October 2008."

In the end, even conservative Financial Times columnist Clive Crook notes dismissively that the entire plan is "fatally flawed," and is far worse than Obama's Health Care Reform Act, which Ryan seeks to repeal by denying it funding.

"Even if his [Ryan's] budget was adopted, which it will not be, it would fail." Sounds pretty definitively horrid.

But noted fellow FT.com financial columnist Martin Wolf runs the numbers and comments on an even more dramatic deadly flaw, "Indeed, even defense spending would collapse" under Ryan's plan. He concluded "The Ryan pan is a Reductio ad absurdum — a disproof by taking a proposition to it's [most outrageous] logical conclusion."

Who knew that the famous TeaParty cry of "Get the Government out of My Medicare" would be so unpopular and utterly unworkable in reality? Always be careful for what you wish for!