Irony Alert

03.17.13

D.C. Elites Agree on Medicare RX: Cuts for Thee, but Not for Me

The Beltway gentry gets a great deal on government-provided health care—but they think your plan needs cutting. Lloyd Green says they should test their ideas on themselves first.

As the nation’s policy elites call for paring back Medicare benefits, they should ask themselves whether they are prepared to lead by example and forfeit their own platinum-plated health and retirement plans. In Washington do not expect anyone to part with anything of value unless it was pried out of their hands or their freezers by the FBI. D.C. is a place where legislators are accustomed to preferred mortgage rates, donor-sponsored Central American bunga bunga junkets, insider stock tips, and sweetheart land deals.

For the rest of the country, the same politicians prescribe entitlement cuts in general and deep reductions to Medicare in particular. In the name of fiscal rectitude, they have announced that the elderly and the tax-paying middle class ought to be prepared to make do with less. Already, President Obama has stated his willingness to reduce future Social Security benefits by embracing a “chained CPI” if he can get congressional Republicans to accede to tax hikes, much to the dismay of some Senate Democrats.

But working Americans believe they’ve worked for those benefits, and they want to keep them—much as past and present members of Congress think they are entitled to keep theirs. Yes, Medicare presents a long-term quandary. But politicians are not offering anything to the public to make changes enticing, fair, or wise.

So Washington agrees: enduring cuts to what we provide citizens in exchange for paying off bond-holders and ideologues.

The emerging elite consensus is a variation on limiting Medicare spending to annual increases in GDP plus 1 percent, or to transform Medicare into a voucher program. And here’s the thing, it is not just Paul Ryan and the House Republicans who are clamoring for these changes. Rather, the consensus is bipartisan. Alice Rivlin, who served as President Clinton’s budget director, supports vouchers, and so too do Obama outside advisers and health-care “hot shots” David Cutler and Jonathan Gruber. Both Cutler and Gruber emailed their support for Ryan- and Rivlin-style vouchers to the Simpson-Bowles Commission.

So Washington agrees: enduring cuts to what we provide citizens in exchange for paying off bond-holdersand ideologues.

In his email, Cutler wrote: “How about this…removing the special status of [traditional] Medicare.” He also suggested “moving the Medicare population into the exchanges” created by Obamacare and acknowledged that this would be the “same” thing as a voucher. Gruber gave his blessing to Ryan-Rivlin care “SO LONG as it is built on top of health reform... ” For the record, the Simpson-Bowles Commission—formally known as the National Commission on Fiscal Responsibility and Reform—was named after Clinton White House chief of staff Erskine Bowles and Alan Simpson, a former Republican senator from Wyoming.

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Metropolitan Policy Program senior fellow and Brookings Institution Greater Washington Research Project Director Alice Rivlin leaves after testifying before the House Financial Services in a hearing on "the Future of Financial Services Regulation," on Capitol Hill in Washington October 21, 2008. (Mitch Dumke/Reuters/Landov)

Sadly, the Beltway gentry seems to have forgotten history. Back in 1983, Ronald Reagan and then-House Speaker Tip O’Neill very gradually raised the Social Security eligibility age from 65 to 67. But here’s the thing. The first rise in the eligibility age did not kick in until 2000, and the phased increases will not be completed until 2022, a fact recently noted by U.S. Court of Appeals Judge and University of Chicago Law School Professor Richard Posner. According to Posner, the reforms of the 1980s are “taking 39 years from enactment to completion, with no changes in the first 17 years.” 

By contrast, Ryan, Rivlin, and Simpson seem to be in a hurry, swept up by or seizing on the imagined urgency of the moment with little mention or concern about the societal costs of their cuts. Indeed, they appear more sensitive to the wishes of 86-year-old Pete Peterson—the former Nixon commerce secretary and investment banker—and his crusade to balance the budget, raise taxes, and starve entitlements than to the plight of Middle America.

What is sauce for the goose is sauce for the gander. If America’s grandees believe that Medicare should be cut, then they need to get by with less. If America’s seniors are expected to live with less health care, so too should the policy sachems. Before we squeeze tens of millions of elderly facing serious health issues to see if a health cost diktat is realistic, the advocates of such a cap should show us it can work, starting with their own health care.

To demonstrate their good faith, the octogenarian Rivlin and Simpson should renounce their Medicare coverage and government pensions, and the Honorable Paul Ryan should give up his taxpayer-funded congressional health care. Next, they should cap their year-to-year spending on their own medical bills. Pledging to limit one’s health spending may sound ridiculous, but no more so than the disease of “1 percent thinking” it would cure.