The President's Budget Proposal — Cuts to Spending, Cuts to Medicare

America's Achilles Heel: Withholding from the "Undeserving" Poor

by Gaius Publius

President Obama released his budget recently, and there's a lot in it, both to like and to not like. Rather than give an overview of its many provisions, let's focus on just two. For something of an overview, one person's anyway, see Robert Greenstein at the Huffington Post. His values may not be yours, but he covers the bases.

The budget carries through on Obama's tax proposals, child care proposals, and so on, as previewed in the State of the Union address. Our discussion is here, so I won't review them again. Let's look at just two pieces of Obama's new budget, overall spending and changes to Medicare.

The President's Budget Reduces Federal Spending

From the Greenstein piece mentioned above:

Despite its investments, however, this is not a "big-spending budget," contrary to some claims. Total federal spending over the next ten years would average 21.75 percent of gross domestic product (GDP) -- identical to the average for the Reagan years. In fact, despite the budget's proposals to ease the sequestration budget cuts, discretionary spending would fall by 2019 to its lowest level on record as a share of GDP, with data back to 1962. So would non-defense discretionary spending.

Is this a good thing? Since I think Obama considers this a "bold" budget (Greenstein's characterization), we can say it reflects his values, in the same way we could say the budget's child care proposals, or Earned Income Tax Credit proposals (he wants to make recent improvements permanent), reflect his values. And those values are and have been Clintonian — less federal "discretionary" spending, with targeted decencies.

Yes, there are sweeteners in the budget, as there were in Clinton's proposals. Less federal spending is one of the unsweets, as I see it, as it both hobbles the non-military good that our government can do and confirms the "frame" that less government is more ... something ... at least as the wealthy see it. Reagan would be proud.

The Budget Hurts Medicare Recipients

That unsweet, less spending, reaches into his Medicare proposals. Greenstein's overview first, then a closer look:

On the fiscal responsibility front, the budget does more than some initial commentary has assumed, in part because some of its proposals -- such as its Medicare beneficiary changes (which are more significant than is widely realized) and its reforms in the tax treatment of unrealized capital gains -- would produce savings that grow after the first decade. ... [S]tabilizing the debt over the next 25 years -- a fiscally dangerous period in which the vast baby-boom generation will enter retirement, driving up costs for Social Security and Medicare -- would represent no small accomplishment.

Ignore Greenstein's values for a moment and just consider the principle. Do you want the debt "stabilized" — in a zero-interest-rate environment no less? Or would you prefer to see our oldest and medically-neediest citizens well taken care of? Only the wealthy, who don't need a dime from the government (but get it anyway) and people like Greenstein want the former. This really is about values.

Now some detail via the New York Times:

Budget Plan Sees Savings in Changes to Medicare
[note framing by the headline writer]

In his new budget, President Obama proposed on Monday to squeeze $399 billion over the next 10 years out of Medicare, Medicaid and other programs run by the Department of Health and Human Services.

Under the proposals, many Medicare beneficiaries would have to pay more for their care and coverage. The president would, for example, introduce a co-payment for new Medicare beneficiaries who receive home health care services, and he would collect $4 billion over 10 years by imposing a surcharge on premiums for new beneficiaries who buy generous private insurance to supplement Medicare.

In addition, Mr. Obama’s budget would reduce scheduled Medicare payments to teaching hospitals, hundreds of small rural hospitals, nursing homes and health maintenance organizations that care for older Americans and people with disabilities. ...

There's more in the article, but you get the drift. Note that Medicare payment to doctors and hospitals is already too low. As the Times says, "many [hospitals] lose money on their Medicare patients." I can say anecdotally the same is true of many doctors, who complain that they have to overcharge patients with private insurance to cover the net expense of treating Medicare patients.

In addition, the budget accelerates the process of converting Medicare from insurance to welfare by expanded means-testing:

The president’s budget would collect $66 billion over 10 years by charging higher premiums to higher-income Medicare beneficiaries, for coverage of doctors’ services and prescription drugs. A relatively small number of high-income beneficiaries already pay more than three times the standard monthly premium.

If the powerful mainstream "left" — meaning people like Obama, Clinton and the broad swath of "centrists" (corporatists) in Congress — continue to convert social insurance programs into welfare, as this budget proposal does, it becomes far more easy for the right to insist these programs be reduced, privatized or cut entirely because the population they serve is no longer "us," but "them."

The article mentions some good news for Medicare in the budget — small changes to drug pricing policy and continued support for CHIP (Children’s Health Insurance Program), for example. But overall, on the Medicare front, this budget offers more austerity for the many so the few won't have to pay taxes.

See what I mean? In this respect, the president is being true to his values, true to his 2006 self. As he said in the first clip at the link in this paragraph:

"Too many of us have been interested in defending programs the way they were written in 1938."

The dog-whistle reference is to Social Security, but as his new budget shows, he clearly means all social programs. An odd legacy for America's first black president, but there it is. Still, he's true to his values — I will give him that.

Our History of Racism Will Do Us In

As journalist Helaine Olen wrote recently, "Some days I believe that when they write the history of the United States after it is all over, they will say slavery and racism did us in." She's right. This history and its mindset, which lives with us today, is our Achilles Heel, the one place the arrow will always sink deep, the go-to spot for any politician or billionaire wanting to appeal to the "center" of the country.

Unfortunately, here the word "center" properly applies. This doesn't characterize us all by any means, but it's true, one way or another, of way too many. Even some of my kind, intelligent, low-info "liberal" friends are openly uncomfortable with the baggy pants in Ferguson, or on the "other side of Troost Avenue" in Kansas City, which moves them to support the police. (Troost is the "dividing line" there, but I think you got that.)

If we are killed as a nation by our billionaires, this is how they will do it, cynically using our Achilles Heel and appealing to our historical need to punish the "undeserving." Today, membership in the "undeserving" is much more broadly defined. No matter; as a nation we still want to "go there," to do the punishing.

Without saying so, the president's budget does much the same, if in a lighter way — it withholds from the modern "undeserving" to preserve the perqs of the wealthy. Punishing the "undeserving" is an odd legacy for America's first black president. Not a choice I would make if I were him, but there it is.

GP​