Republican Fiscal Bluff Demands Are All About Benefit Cuts
Even a heartless Grinch should understand that cutting Social Security, Medicare and Medicaid benefits is a really bad idea.
Even if you put aside the human suffering the Republican benefit cuts would cause, they just don’t make sense.
Sen. Mitch McConnell (R-Ky.) has highlighted these three Republican demands for the so-called "Fiscal Cliff" in Washington, D.C. Take a look at them, and why they don’t work:
Slowing cost-of-living increases for Social Security beneficiaries:
- The proposal to tie Social Security cost-of-living adjustments (COLA) to the “chained CPI” is not a technical change to make the COLA more accurate. In fact, it would make the COLA less accurate. A more accurate formula would increase COLAs to take into account the higher health care expenses of retirees and people with disabilities. More than 250 economists have signed a statement saying there is “no empirical basis” for reducing the Social Security COLA.
Increasing the Medicare eligibility age from 65 to 67:
- Raising the Medicare retirement age actually would increase overall health care costs, not lower them.
- The increase in total costs would be twice as much as the Medicare “savings”— $11.4 billion in 2014 (if the higher age were fully in effect), compared with $5.7 billion.
- This is an absurd waste of money.The only people it would benefit are providers, who could charge higher prices for 65- and 66-year-olds.
Making higher-income beneficiaries pay higher Medicare premiums:
- Medicare premiums already are income-related (“means tested”). The wealthiest 5% of retirees with incomes of more than $85,000 already pay higher Part B and Part D premiums.
- Current proposals to lower this threshold and increase Medicare premiums for middle class seniors with even lower incomes would produce relatively small budget savings over 10 years—only $25 to $29 billion.
Other Republicans have argued for capping Medicaid spending per person as part of a fiscal showdown deal. Similar problem:
- This would just shift costs to the states and prompt states to limit services.
- This proposal would not make Medicaid more efficient.Medicaid already is far more efficient than private insurance. Medicaid costs 20% less than private insurance for adults and 27% less for children, and its costs per person are growing more slowly than those of private insurance.
Now get the facts about what the Republican benefit cuts would mean to working families.
