Obama Budget Points to Medicare Bankruptcy, Raises Specter of Dem Plan to Gut Medicare

February 15, 2012

The Democrats’ 2011 Plan to Bankrupt Medicare Apparently Alive and Well in 2012

President Obama’s budget proposal released this week was bad enough for its insistence on more taxing, borrowing and spending. What is equally alarming is that the Obama budget points to the bankruptcy of Medicare.
Medicare faces a serious fiscal crisis, yet Democrats refuse to admit the problem or offer serious proposals to fix it. Instead for much of 2011 Democrats campaigned on their plan to bankrupt Medicare.
Perhaps even worse is the Democrat plan to empower a board of unelected, unaccountable bureaucrats to do Democrats’ dirty work for them and gut Medicare.

President Obama’s budget proposal released this week was bad enough for its insistence on more taxing, borrowing and spending. What is equally alarming is that the Obama budget points to the bankruptcy of Medicare:

USA TODAY: “OBAMA BUDGET LEAVES DEBT BOMB TICKING”: (Editorial, “Obama Budget Leaves Debt Bomb Ticking,” USA Today, 2/14/2012)

MEDICARE WILL “BE IN THE RED FOR MUCH OF THE NEXT DECADE”: “One of Medicare’s trust funds also will be in the red for much of the next decade, according to the numbers in the briefing book that the White House provided to Congress along with the budget, which lays out Mr. Obama’s tax and spending plans for fiscal year 2013 and beyond.” (Stephen Dinan, “Social Security’s Reserves Forecast to Run Dry in 2022,” The Washington Times, 2/13/2012)

Medicare faces a serious fiscal crisis, yet Democrats refuse to admit the problem or offer serious proposals to fix it. Instead for much of 2011 Democrats campaigned on their plan to bankrupt Medicare:

DEMOCRAT PLAN MEANS AN “IMMEDIATE 17-PERCENT REDUCTION” IN BENEFITS OR “IMMEDIATE 24-PERCENT INCREASE” IN TAXES: “The long-range financial imbalance could be addressed in several different ways. In theory, the standard 2.90-percent payroll tax and the additional tax 0.9-percent tax on high-income earners could be immediately increased by the amount of the actuarial deficit to 3.69 percent, or expenditures could be reduced by a corresponding amount. Note, however, that these changes would require an immediate 24-percent increase in the tax rate or an immediate 17-percent reduction in expenditures.” (pp. 28-29, “2011 Annual Report of the Board of Trustees of the Federal Hospital Insurance and Federal Supplementary Medical Insurance Trust Funds,” The Boards of Trustees of the Federal Hospital Insurance and Federal Supplementary Medical Insurance Trust Funds, 5/13/2011)

AMERICAN ACADEMY OF ACTUARIES: BENEFIT CUTS COULD BE EVEN HIGHER: “The projected HI deficit over the next 75 years is 0.79 percent of taxable payroll. Eliminating this deficit would require an immediate 24 percent increase in payroll taxes or an immediate 17 percent reduction in benefits—or some combination of the two. Delaying action would require more drastic tax increases or benefit reductions in the future.” (“Medicare’s Financial Condition: Beyond Actuarial Balance,”American Academy of Actuaries, May 2011)

BUT MEDICARE TRUSTEES SAY “SIGNIFICANT REASONS TO BELIEVE THAT ACTUAL COSTS WILL BE HIGHER IN PRACTICE THAN PROJECTED,” MEANING TRUST FUND MAY RUN OUT EVEN SOONER: “In a nutshell, Medicare cost projections are highly uncertain and there are significant reasons to believe that actual costs will be higher in practice than projected in the 2011 report, as the report itself notes in several places.” (Testimony from Charles P. Blahous, Committee On Ways & Means, U.S. House Of Representatives, 6/22/2011)

TRUST FUND “VERY LOW” AND “ON A RAZOR’S EDGE” BEFORE “RUNNING OUT ALTOGETHER IN 2024”: “Here I will simply relate this shift to the theme of overall uncertainty in the Medicare projections. It may exaggerate—but not by much—to note that the HI Trust Fund projects to be on a razor’s edge for several years, starting by the latter part of this decade. This was true not only in the 2010 report but is also true in this year’s report. By mid-2015, for example, we only project enough assets in the HI Trust Fund to cover less than half a year of benefit payments in the absence of incoming dedicated revenues. This financing reserve is thus very low for several years before running out altogether in 2024. It thus does not take a great deal of creativity to imagine a 2012 report in which the HI Fund exhaustion date moves again by several years, in either direction, even if there are relatively subtle changes in projections of annual program operations.”(Testimony from Charles P. Blahous, Committee On Ways & Means, U.S. House Of Representatives, 6/22/2011)

PELOSI BRAGGED ABOUT HER CUTS TO MEDICARE UNDER GOVERNMENT HEALTHCARE TAKEOVER IN OCTOBER: “And we have proven that we’re willing to make cuts in the cost to initiatives. We took half a trillion dollars out of Medicare in the Affordable Care Act, the healthcare bill, already.” (Remarks from Nancy Pelosi, CNBC, 10/28/2011)

Perhaps even worse is the Democrat plan to empower a board of unelected, unaccountable bureaucrats to do Democrats’ dirty work for them and gut Medicare:

NEW BUDGET “WANTS MORE TEETH FOR MEDICARE BOARD”: (Phillip Klein, “Obama’s Budget Wants More Teeth for Medicare Board,” The Washington Examiner, 2/13/2012)

OBAMA HHS SECRETARY KATHLEEN SEBELIUS CLAIMED IPAB WILL SOMEHOW “PROTECT” MEDICARE: (Kathleen Sebelius, “IPAB Will Protect Medicare,” Politico, 6/23/2011)

OBAMA’S MEDICARE PLAN: EMPOWER “15 SAGES” WITH “THE POWER OF THE PURSE”: “Fifteen members will serve on the Independent Payment Advisory Board, all appointed by the President and confirmed by the Senate. If per capita costs grow by more than GDP plus 0.5%, this board would get more power, including an automatic budget sequester to enforce its rulings. So 15 sages sitting in a room with the power of the purse will evidently find ways to control Medicare spending that no one has ever thought of before and that supposedly won’t harm seniors’ care, even as the largest cohort of the baby boom generation retires and starts to collect benefits.” (Editorial Board, “The Presidential Divider,” The Wall Street Journal, 4/14/2011)

WSJ: OBAMA MEDICARE PLAN IS MEDICARE “RATIONING”, WILL “THROW GRANNY OVER THE CLIFF”: “One place to start is by attacking the Democratic plan to cut Medicare via political rationing. Mr. Ryan’s budget had the virtue of embarrassing President Obama’s spend-more initial budget, and the White House responded by proposing to increase the power of the new Independent Payment Advisory Board (IPAB) to decide what, and how much, Medicare will pay for. The ObamaCare bill goes to great lengths to shelter this 15-member, unelected board from Congressional review, with the goal of letting these bureaucrats throw granny over the cliff if Medicare isn’t reformed. Yet few Americans know anything about IPAB or its rationing intentions.” (Editorial, “The GOP’s New York Spanking,” The Wall Street Journal, 5/26/2011)

REP. PETER STARK (D-CA): IPAB IS A “MINDLESS-RATE CUTTING MACHINE THAT SETS THE PROGRAM UP FOR UNSUSTAINABLE CUTS”: “I oppose the inclusion the Independent Payment Advisory Commission, called IPAB. Some of my colleagues support this Commission because it shields them from having to take tough votes when it comes to cutting Medicare provider payments. It’s my experience that Congress always does what is needed to protect and strengthen the Medicare program. IPAB is a dangerous provision. By statute, this Commission would be required to hold Medicare spending to an arbitrary and unrealistic growth rate. It is a mindless-rate cutting machine that sets the program up for unsustainable cuts. That will endanger the health of America’s seniors and people with disabilities. It is an unprecedented abrogation of Congressional authority to an unelected, unaccountable body of so-called experts. I intend to work tirelessly to mitigate the damage that will be caused by IPAB.” (“Statement of Congressman Pete Stark Supporting Health Care Reform,” Office of Rep. Pete Stark, 3/21/2011)

FORMER REP. RON KLINK (D-PA) SAYS IPAB “IS DEMOCRATS’ ACHILLES’ HEEL,” WILL “GUT MEDICARE”: (Ron Klink, “IPAB Is Democrats’ Achilles’ Heel,” The Hill, 6/15/2011)