The Republican Plan to Destroy Social Security, Medicare, Medicaid, and the Middle Class

This post has been faxed to Representative Todd Young, IN-09; Indiana Senators Dick Lugar and Daniel Coats; The White House; House Speaker John Boehner; Senate Majority Leader Harry Reid; House Minority Leader Nancy Pelosi; and Wisconsin Representative Paul Ryan, and and posted on this web site, The web site provides links to documents on the web supporting the statements in this letter.

The points in this post were made in a phone call to Indiana Representative Todd Young’s Bloomington office on April 5th, 2011.

It is time for this nation to wake up to the fact that the Republican party’s positions on Social Security, Medicare, Medicaid, the deficit and the economy are based on nothing but lies and an agenda that seems targeted at totally destroying the Middle Class in America, destroying the social safety net programs that provide health care to America’s senior citizens and poor, and completing the transfer of the vast majority of wealth of this nation into the hands of less than 5% of the population.

The dishonesty in the claims being made are simply astounding, outrageous, and an insult to the American people, and are directly contradicted by every analysis done by the Congressional Budget Office, which is the independent office charged with monitoring the impact of legislation on the economy, and honest economic observers.

Here are some simple facts, all of which are in direct contradiction to the outrageous positions being taken by the Republicans, and in fact too many Democrats, and even too many in the hapless economic administration of Barack Obama.

1. Social Security is completely unrelated to the current deficit. Social Security does NOT borrow money and “saddle our grandchildren with debt”. Social Security is pay-as-you-go. Today’s SS payroll taxes pay for today’s benefits (actually a bit more). It will continue to do so, even with demographic changes (baby boomers retiring) through the next 30+ years

The moment you hear a member of Congress talk about addressing the deficit by changing the Social Security program, you know you are being lied to. The Social Security trust fund is independent of the budget. It is supported by payments made by Americans throughout their lives into the trust fund. The trust fund is not in danger for decades. And simply extending taxation above the $180,000 dollar level for payments into the trust fund will make it stable literally forever. The idea of privatizing Social Security is simply insane. Why in the world would the American people turn this most successful and stable program over to the criminals that have destroyed the economy with their manipulations of Wall Street, the stock market, hedge funds, and the real estate market?

2. Medicare functions at an overhead cost of only 5%. Private for-profit insurance functions at an overhead cost of over 17% , with some sources estimating as much as 30%%..

That is a overhead and bureaucratic bloat ranging from from 17% to as much as a full third of every dollar going into private health insurance that goes into insuring profits for share holders, and insane and unjustified millions in benefits for the CEOs and officers of the private insurance companies. This statistic also puts the lie to allegations that the private sector is more efficient in managing finances. The only people to benefit from privatizing Medicare are the already wealthy share holders and officers of the companies. The American people right now have a system in which 95% of the money going in is spent on health benefits. The only reason the Republicans want to privatize is so their fellow ruling class members can increase their profits and bonuses, again on the backs of the ill and the elderly and poor, and increasingly, the dying Middle Class. Ryan’s proposal in fact seems specifically designed to Aid Insurers, a Top Source of Campaign Cash.

3. Cutting Medicaid Means Cutting Care for the Poor, Sick and Elderly.

As for Medicaid, it has become crystal clear that the Republican party simply does not care about the poor and down trodden in society. Their entire take on health care for the poor and elderly can be summed up pretty simply: “Just hurry up and die.”

4. The Republicans and too many Democrats in Congress and the Obama administration have made it crystal clear that their only purpose in their political lives is to insure that there is always bail out money for the criminals of Wall Street, the stock market manipulators, the hedge fund managers, and the giant banks and the mortgage industry, who have been committing fraud on an undreamed of scale for a decade in the real estate market. Right now the only reason those people still have jobs is because they were bailed out with tax payer money.

What we have in America now is socialism and corporate welfare for the ruling class when it is faced with the consequences of having committed criminal acts and destroyed entire segments of the economy and brought their businesses to the brink of collapse and bankruptcy. Our tax dollars have bailed them out, so they can give themselves outrageous millions of dollars in bonuses for failure, and pour millions of those dollars right back into the pockets of the members of Congress who gave them the handout.

For the rest of us, we have laissez faire capitalism and pious lectures on taking the consequences and sharing the suffering. Sharing the suffering for an economic mess that we did not create! That is the fate for the the rest of the population who don’t happen to be “too big to fail”. The Republicans and too many Democrats seem completely ready and willing cover the losses and payouts to the financial ruling class by shoving the burden onto the backs of the poor and the Middle Class.

The clearest evidence of all of this was this week’s outrageous sham of a proposal to destroy Medicare put forward by Wisconsin Representative Paul Ryan.

Every proposal by the Republicans in the House and Senate simply ignores the statements from the Congressional Budget Office, which is the office charged with monitoring and reporting on the economic impact on the budget of all legislation. The CBO deals in facts. The Republican party deals in fantasy. So they ignore the facts and just make up lies and spin fairy tales to support their radical positions, which are destroying America. Ryan’s proposal this week is a perfect example of a proposal with absolutely no foundation in reality. It is a tale told by an idiot, full of sound and fury, but as far as the truth goes, signifying nothing.

The Congressional Budget Office has pointed out what a ludicrous piece of work Ryan’s proposal is, and that rather than decreasing the deficit, it will over the long term increase it, but worst of all, it will increase the cost to senior citizens for medical coverage

Under the proposal, most elderly people who would be entitled to premium support payments would pay more for their health care than they would pay under the current Medicare system. For a typical 65-year-old with average health spending enrolled in a plan with benefits similar to those currently provided by Medicare, CBO estimated the beneficiary’s spending on premiums and out-of-pocket expenditures as a share of a benchmark amount: what total health care spending would be if a private insurer covered the beneficiary. By 2030, the beneficiary’s share would be 68 percent of that benchmark under the proposal, 25 percent under the extended-baseline scenario, and 30 percent under the alternative fiscal scenario.

Long-Term Analysis of a Budget Proposal by Chairman Ryan

What does this mean in real numbers? Let’s look at an actual financial analysis from the Center for Economic and Policy Research. (Emphasis added.)

Wednesday, 06 April 2011 04:42

That is what headlines would look like if the United States had an independent press. After all, this is one of the main take aways of the Congressional Budget Office’s (CBO) analysis of the plan proposed by Representative Paul Ryan, the Republican chairman of the House Budget Committee. Representative Ryan would replace the current Medicare program with a voucher for people who turn age 65 in 2022 and later. This voucher would be worth $8,000 in for someone turning age 65 in that year. It would rise in step with with the consumer price index and also as people age. (Health care expenses are higher for people age 75 than age 65.)

According to the CBO analysis the benefit would cover 32 percent of the cost of a health insurance package equivalent to the current Medicare benefit (Figure 1). This means that the beneficiary would pay 68 percent of the cost of this package. Using the CBO assumption of 2.5 percent annual inflation, the voucher would have grown to $9,750 by 2030. This means that a Medicare type plan for someone age 65 would be $30,460 under Representative Ryan’s plan, leaving seniors with a bill of $20,700. (This does not count various out of pocket medical expenditures not covered by Medicare.)

Representative Ryan Proposes Medicare Plan Under Which Seniors Would Pay Most of Their Income for Health Care

The Economic Policy Institute’s analysis of Ryan’s plan reveals that it seems to fit with the Republicans current mission in life, and that is not to focus on the one thing America needs most, jobs. Instead, everything they are trying to do, including this Paul Ryan proposal, will destroy jobs in the private sector.

Over the next five years (during which time CBO projects that the economy will still be below potential), Chairman Ryan’s Medicaid proposal would cut the program by $207 billion, which includes both eliminating the Medicaid expansion under the Affordable Care Act and even deeper cuts to the Medicaid program. Using a standard macroeconomic model that is consistent with private- and public-sector forecasters, we find that a $207 billion cut would result in a loss of 2.1 million jobs over the next five years, or 2.9 million full-time equivalent jobs.[3] These figures are in job-years, which refer to a job held for a single year, meaning that five jobs lost in a single year is the equivalent to one job lost over five years.

Furthermore, the job loss would overwhelmingly be in the private economy. Medicaid has very low overhead, as about 96% of the program’s funds go toward benefits which are spent in the private sector. Assuming the 96% ratio is relatively constant across states (or at least not systematically biased in one direction), Medicaid cuts of this magnitude would result in the loss of just under 2 million private-sector jobs, or 2.8 million full-time equivalent jobs.
Ryan plan to slash Medicaid will cost the economy nearly two million private sector jobs

As for the financial impact on every day Americans on Medicare, here is a simply question for you. Given that the vast majority of Americans are dependent on Social Security payments in their old age, just how many of them will have any money left to pay for lodging or eat after paying $20,700 a year for medical care?

I retired this year. Right now the total annual premiums and deductibles for the two of us that I have projected having to pay for 1) Medicare Part B premiums ($2,770.00), 2) supplemental Part B coverage through private group policy ($3,924.00) , 3) Part D prescription care premiums ($864.00) and deductible ($620.00), for a total minimal projected outlay of $8,178.00. Having only just embarked on the adventure of this stage of life, I do not know yet what additional costs we will be looking at, although the above figures do not include ongoing co-pays for drugs, even after meeting the deductible, so you can certainly probably add another thousand dollars or more to the above final figure.

I defy any sitting member of Congress to meet with me and tell me face-to-face that that is not already a high enough cost for health care insurance. To tell me, as Senator Ryan is doing, that that cost is going to go up to $20,700 a year simply is beyond the pale.

Here are some simple facts that I hope every member of Congress will keep in mind.

We have voted in every election since we were 18 years old, except for one time when living abroad for a year, when we did not vote absentee. I can guarantee my current members of Congress, all of whom are Republicans, that I will be doing everything with every minute of time I have over the next year to insure that as many people as possible vote to turn them out of office if they continue with their plans to destroy Social Security, Medicare, Medicaid, and the Middle Class. That is what they are doing. And it is time to put a stop to it.

As for Medicare and Social Security, these are programs that Americans pay into their entire lives. This has nothing to do with taxes. These are savings programs, and in the case of Medicare, a program for which even after retirement Americans must pay premiums into in order to participate. As for Medicaid, if the Republican party simply hates the poor so much they just want to let them die and do without any access to medical care, the least they can do is be honest and admit this is their position.

I think what disgusts me the most about all of this is that the Republicans simply refuse to acknowledge the most elementary fact. Taxes are what support the government. Taxes for the rich are right now at the lowest point they have been in this nation in over a century. We would not be in the deficit mess as a nation we are except for two primary reasons: the unjustified and ongoing wars that the Republicans have gotten us into over the past decade; and the historically low tax rates instituted by the Bush era.

Here is a graphic that shows what the facts are about the items above, and the current deficit. This graphic sums it all up.


The deficit is not the problem. The stubborn refusal of the ruling class to pay their fair share of taxes is the problem. All of this nation’s deficit problems could be solved by four actions. 1) End the Bush tax cuts, and return rates to where they were 12 years ago; 2) End the loopholes that let most corporations pay practically no taxes, sometimes while actually getting government subsidies. GE, for instance, pays NO CORPORATE taxes, it was revealed recently, when they should be paying billions; 3) Absolutely no more taxpayer bailouts for Wall Street, the bankers, the hedge fund managers, and the corrupt real estate mortgage industry; 4) Bring our troops home. Get them out of Iraq. Get them Out of Afghanistan. Put an end to the Imperial Presidency that for decades now simply ignores the Constitutional Requirement for a Declaration of War before committing our troops.

As for the super rich, the corporations, and the rest of the masters of the universe who have created this economic mess, let the free market do its work when it applies to the ruling class, instead of blaming it all on the poor and Middle Class and kicking them when they are down.


Author: Ron