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The GOP and Medicare deficits – this is gonna hurt

It looks like the GOP is going to win, and win big today, their success driven in large part by voter outrage about taxes and spending, with concern about the cost of reform a strong supporting actor.
If those voting for the GOP think they’re about to see restraint in spending, they are going to be sorely disappointed. We need look no further than Medicare Part D, which, according to a piece in Forbes, the mouthpiece of American Liberals for generations, “U.S. Comptroller General David Walker called “the most fiscally irresponsible piece of legislation since the 1960s.”
The Forbes piece went on to say “Recall the situation in 2003. The Bush administration was already projecting the largest deficit in American history–$475 billion in fiscal year 2004, according to the July 2003 mid-session budget review. But a big election was coming up that Bush and his party were desperately fearful of losing. So they decided to win it by buying the votes of America’s seniors by giving them an expensive new program to pay for their prescription drugs.”
Here’s how Walker put it in an interview with CBS:
“…we promise way more than we can afford to keep. Eight trillion dollars added to what was already a 15 to $20 trillion under-funding. We’re not being realistic. We can’t afford the promises we’ve already made, much less to be able, piling on top of ’em.”
With one stroke of the pen, Walker says, the federal government increased existing Medicare obligations nearly 40 percent over the next 75 years. [emphasis added]
“We’d have to have eight trillion dollars today, invested in treasury rates, to deliver on that promise,” Walker explains.
Asked how much we actually have, Walker says, “Zip.”
So where’s that money going to come from?
“Well it’s gonna come from additional taxes, or it’s gonna come from restructuring these promises, or it’s gonna come from cutting other spending,” Walker says.
Forbes again:
Moreover, there is a critical distinction [between Part D and reform]–the drug benefit had no dedicated financing, no offsets and no revenue-raisers; 100% of the cost simply added to the federal budget deficit, whereas the health reform measures now being debated will be paid for with a combination of spending cuts and tax increases, adding nothing to the deficit over the next 10 years, [emphasis added] according to the Congressional Budget Office…the unfunded drug benefit, which added $15.5 trillion (in present value terms) to our nation’s indebtedness, according to Medicare’s trustees, was worth sacrificing his [Rep Trent Franks (R) of Arizona] integrity to enact into law. But legislation expanding health coverage to the uninsured–which is deficit-neutral–somehow or other adds an unacceptable debt burden to future generations.”
Readers may recall Part D passed in the dead of night and only after GOP leader Tom Delay (currently on trial for money laundering) strong-armed three GOP Representatives into switching their ‘nays’ to ‘yeas’, thereby ensuring your kids, and my kids, would be saddled by an unfunded debt of $8 trillion.
(BTW, all but 16 Democrats voted AGAINST the Part D bill…)
One of the vote-switchers was Trent Franks, who is now a top contender for Hypocrite of the Year. Here’s what Franks said about health reform: “I would remind my Democrat colleagues that their children, and every generation thereafter, will bear the burden caused by this bill. They will be the ones asked to pay off the incredible debt”.
As bad as he is, Franks has some tough competition for the HotY award; Among the GOP deficit hawks who voted for Part D, and are now outraged by the cost of health reform are Senators McConnell (KY), Cornyn (TX), Crapo (ID), Hatch (UT), Grassley (IA), Hutchinson (TX), Sessions (AL), Enzi (WY), Roberts (KS), and Inhofe (OK).
If you think these conservative deficit hawks are going to do anything different this time around, you’re delusional – at best.
I am continually amazed by the inability of the American voter to separate fact from fiction, lies from truth, pandering from honesty. Some, including me, will argue that the Democrats have done a lousy job of pointing out the ‘inconsistency’ on the part of these Republicans.
But at some point the people pulling the levers in the voting booth have to take responsibility.
And that time is now. The reason – the only reason – we have huge deficits and no path to paying for them is because the American voter is too damn lazy to engage.
As HL Mencken said: “Democracy is the theory that the common people know what they want, and deserve to get it good and hard.”
And this one is gonna hurt.

19 thoughts on “The GOP and Medicare deficits – this is gonna hurt”

  1. Joe, I think you are great at what you do, genuinely you have your finger of the pulse and issues of medical management, that is why I love this website, but for Pete’s sake don’t turn it into a Democratic wog site as this issue is.

  2. So your point is that because the GOP blundered in 2003, we should allow continue along the path that the Dems have us on in 2010? Great logic!

  3. Joe,
    I wouldn’t expect anything less than this article from you, and on election day.
    The sad thing is that even in the face of overwhelming defeat you still think you’re correct. But instead of defending your position, you do what all Liberals do, you call names!
    The American voter is engaged, and today they will show it where it counts, in the voting booth.

  4. Joe – thanks for the comment.
    I’d suggest we all stand back and look at where we are and how we got here. No one party is responsible for creating, or solving the problem. The GOP’s actions in 2003 were beyond financially irresponsible; suspending PAYGO rules, passing the largest single entitlement bill since Medicare with NO FUNDING, and prohibiting CMS from considering efficacy in setting reimbursement for devices and drugs.
    In contrast, the Dems reinstated PAYGO rules and have passed a reform bill that has much less impact on the deficit.
    As I’ve stated here numerous times, I’m NOT a supporter of the reform bill; there’s far too little in meaningful cost control, and the political horse trading to get votes was obscene. However, when one compares the financial impact of reform to Part D and the other giveaways in the 2003 MMA, it is blindingly obvious that, when it comes to health care, the more fiscally prudent party is NOT the GOP.
    Sad, but true.

  5. Jerry – welcome to MCM.
    No idea how you got to that conclusion or where you came up with that figure or what the ‘current pathway’ is, but no, I don’t.
    I am gravely concerned about the future and do not see much hope if the party responsible for adding trillions of unfunded obligations to the deficit is the one Americans believe will address the problem. I don’t want to assume anything here, but don’t you think there’s a problem here?

  6. Dorrence – once again, you rely on labeling instead of logic.
    Point out, if you will, where my post is in error? Defend, if you can, the GOP’s handling of Part D?
    Your blind allegiance is exactly the problem I describe – ignorance and an inability to grasp basic concepts beyond those you are spoon fed by talking heads you agree with.

  7. Unfortunately, both the post and the comments only further prove that we have turned the democratic process into a sporting event in so much that we have to be on one side or the other.
    Look, we’ve got a HUGE problem in Medicare. I don’t care who made it worse, who did or did not destroy it or when it all started to come apart. What I care about is HOW DO WE FIX IT! Simply saying we’ll do it is not enough and unfortunately that’s all we’re getting out of Republicans AND Democrats alike. We need plans and not plans like “I plan to cut spending and raise taxes”, vice versa or anywhere in between. We need PLANS like “I will cut THIS program, stop funding THAT program and raise THIS tax to help offset the costs needed to sustain the Medicare system.” Enough of generalities from these politicians. Generalities helped get us into this mess. We need specifics now more than ever and I don’t care WHERE they come from as long as they are based in logic and give us a linear timeline which we can quantify and hold them accountable for.
    If you want to root for sides then I suggest you go back to watching sports. Politics should NOT be a system where we “only support our team” but rather one in which we look at all the logical options and vote for the one that makes the most practical sense. Disregarding, ignoring and chastising one party’s ideas because of the party they are associated with is really no better than racism, sexism, or any other prejudice.

  8. Anthony – thanks for the comment. I don’t see this as something that would be specific to a ‘Democratic site’.
    From time to time I discuss issues of health policy and politics, especially when I see something as concerning as Part D and the demagoguing from newly-minted deficit hawks about reform and the costs thereof. You may recall I took the Dems to task – repeatedly – during the health reform debate and legislative process.
    I’ll continue to point out what I see as hypocrisy, demagoguing, and outright bad policy. I’d ask that readers focus on the issue; only by honestly pointing out the pros and cons of the positions taken by our politicians from whatever party will we be able to reach consensus on solutions.
    And, when we use that as the basis for our conversation, I think we’ll find we can talk openly, honestly, and without the divisiveness and rancor that is all too common these days.

  9. Kevin – thanks for the comment.
    I agree with your contention that we need solutions. However, in order to do that you have to understand how we got to where we are.
    Today, many voters seem to think that the GOP will solve the deficit problem. The purpose of this post is to point out the fallacy of that logic, and by so doing force people to look deeper, to get past their preconceived notions and really try to understand root causes.
    Only when we hold our elected representatives responsible will we have any chance of fixing this problem. And that requires us – all of us – to be honest about cause and effect.

  10. Joe. I am very disappointed in you with this post. Don’t take advantage of your audience by using this site as a forum to post your political opinions. And don’t try to persuade me by shoving your political opinions down my throat. Stick to WC industry resource and concerns. That’s the reason we read this blog.

  11. Medicare Part D is a boondoggle and I for one hope its repeal or reform becomes part of the dialogue. illustrates the irresponsibility of both parties.
    Methinks the current iteration of the GOP is likely to demonstrate more fiscal responisibility than in the recent past. But, whether that equates to having the hutzpah to go against a major voting block tempers one’s enthusiasm for meaningful change.

  12. Dorrence,
    I have to disagree with your comments. The American Voter is not engaged, if they were they would understand that the GOP has and is hypocritical when it comes to the deficit as Mr. Paduda has stated.
    The American voter is easily swayed by fear and lack of knowledge. The Democrats have not done enough to counter that fear mongering so we will all suffer for it.

  13. We will know that Republicans are serious about cutting spending when they repeal Medicare Part D.

  14. MCO – Good catch.
    Yes. We cannot afford Part D, especially when HHS is prohibited from negotiating price with big pharma.
    However, if Sec Sibelius was given authority to
    a) negotiate price, and
    b) use reference pricing, and
    c) implement a strict formulary
    then it might be more affordable. But I’d emphasize the ‘might’.

  15. Anonymous – thanks for the comment
    You can read what you like, and what you read and why is up to you. If you don’t like something I write, don’t read it.
    But don’t presume to tell me what to write in my blog.
    This blog covers health policy, health care issues, managed care, group health, workers comp, pharmacy, Medicare and Medicaid. Workers comp is a big component of this, but only one component. And WC is heavily affected by these other issues as well, something many folks in the comp world are beginning to better comprehend.
    Feel free to unsubscribe and not read the blog. That is your right, just as it is my right to publish what I like. If you want bland pablum, there’s lots of places to get fed that on line and elsewhere.
    People who read MCM do so for my insights and opinions; unlike many sources I’m pretty blunt and outspoken. Many disagree with my opinions, and that’s great – I back up my opinions with facts, and if readers want to disagree then they are more than welcome to do so.
    btw, I’ve upset, or perhaps more accurately angered some of my Liberal readers with my statements on health reform and single payer. I didn’t get a comment from you then; is it possible you only object when you are challenged?
    I say that not to throw down the gauntlet, but to encourage us all to embrace objectivity.

Comments are closed.

Joe Paduda is the principal of Health Strategy Associates




A national consulting firm specializing in managed care for workers’ compensation, group health and auto, and health care cost containment. We serve insurers, employers and health care providers.



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