Romney/Romney: Sorting the Medicare Lies

Crossposted from Democratic Convention Watch

A lot of the chattering class view the choice of Paul Ryan as an easy win not only for President Obama, but a sure thing for holding the Senate and recapturing the House (or at least coming close enough to count). However, I've seen Paul Ryan up close and personal and he is incredibly good at speaking in a manner that convinces people his lies are truths. We must be ready! So, this is the first in a series, telling you what you need to know when people you know believe the dark side.

Romney/Ryan likes to say that President Obama cut $700 million (sometimes $500 million) from Medicare and that “they” are working to save it. To understand why this is an out and out falsehood, you need to understand the difference between defined benefit and defined contribution. 

In terms of retirement (and we'll get to how it applies to Medicare), defined benefit was a pension program. That is, the retiree received a set amount of money every month for the rest of his/her life. Defined contribution is a 401(k) program, where the potential retiree places a set amount of money in an account and hopes for the best in terms of payout.

Currently, Medicare is a defined benefit program. The “benefits” are things like doctor visits, medications, surgeries, durable medical equipment and hospital stays, to name a few. These are NOT specific dollar amounts, they are paid in terms of goods and services, whatever that costs the government. Yes, Medicare recipients are required to chip in, but the majority of the costs are covered by the program. 

Romney/Ryan wants to replace this with a voucher program. That is a defined contribution program: Medicare recipients would receive a set amount of dollars a month with which they can purchase health insurance.  Thus, Romney/Ryan would contribute to Medicare recipients care, but whether or not that would be enough to cover the cost of premiums, much less co-payments and deductibles is completely unlikely. If you doubt this, pretend that you're in your 60's and have a pre-existing condition, and then go price private health insurance. 

This changes the spread of costs between the government and individuals. Below is a chart from the Center on Budget and Policy Priorities (reprinted with permission) that shows things very clearly.


You may wonder why there is such a disparity in total costs. If you remember back to 2009 when DCW was all over the various health care proposals, the insurance companies take 15 – 30% in administrative costs out of every premium dollar paid, while it costs Medicare 2 – 4%. Plus, many more items would be excluded from the list of covered services. Remember, the Romney/Ryan plan would repeal the ACA, so there would be no holding down of premium costs because there would be no public option, not even for Medicare. There may well be, in their dreams, a Medicare “insurance” option, but it would be limited in terms of payouts. 

Let's get back to that huge $700 million cut. What the ACA did was to decrease the amount paid to doctors, hospitals, and durable goods providers. They did not cut the defined benefit to the recipients. The cut is also not current, it's a going-forward amount over 10 years. Further, the Ryan budget (as published) specifically includes the ACA cuts while repealing all other portions of the law.

So there you have it: the Medicare lies. Next in the series, the lies Ryan and Romney tell about themselves. By way of coming attractions: did you know, for example, that Ryan is a trust fund baby, went to college with government funds, and comes from a family that made its megamillions on government contracts? Yes, really.

Game On: Romney/Ryan=end of the country as we know it

Crossposted from Democratic Convention Watch

In choosing Paul Ryan as his running mate, Mitt Romney has made an even more extreme choice than John McCain made in choosing Sarah Palin in 2008. You can tell I'm serious because I didn't say Mittens, Spunky and John-Boy, and haven't picked a nickname for Paul yet.

The Ryan choice completes Mitt's morph from moderate Republican businessman with aspirations of ultimate power to the signing pen for Grover Norquist. If you don't know what that means, you need to know.

Grover Norquist, president of Americans for Tax Reform and one of Washington’s most influential anti-tax conservatives, told National Public Radio in 2001, “I don’t want to abolish government. I simply want to reduce it to the size where I can drag it into the bathroom and drown it in the bathtub.”

Grover Norquist and his organization are the folks who make Republican candidates at all levels sign a pledge to never raise taxes. This ultimately led to the teabag contingent coming close last summer to denying the US government the ability to pay its bills, in direct violation of the US Constitution. If Ryan hadn't been born, Grover would have invented him.

Because there are so few undecided voters this year, Mitt needs to shore up the conservative fringe of the Republican base. Ryan is the choice to do that. In spades. 

In the spring of 2009, I heard Paul Ryan speak on his proposed changes to health care at Cato. I thought he was joking. But no, he wants to completely destroy Medicare, Medicaid and every other social program. Don't believe me? His budge, in full, is after the jump. 

Here's the Cliff Notes version

It substantially restructures Medicare; cuts Medicaid, food stamps, and transportation infrastructure; and it reduces the top tax rate from 35% to 25%. Regarding Medicare, the 2011 version of the Ryan budget would transform it from a government-run program to one where future seniors receive a voucher or premium support to purchase health insurance from private insurers. The Congressional Budget Office said the plan would force most seniors to pay more for their health care  than under the current Medicare system. […]

Ryan and his allies say a bold plan – reforming entitlements like Medicare and Medicaid – and slashing discretionary spending is needed to reduce the deficit and debt. But critics argue that the pain comes primarily from the poor and middle class. An analysis from the liberal-leaning Center on Budget Policies and Priorities says that 62% of the spending cuts in the Ryan budget would come from low-income programs, while 37% of its tax benefits would go to those making more than $1 million per year.


If you want to read the full CBO analysis, click here. For a synopsis, click here. If you are confused as to what percentage of the Federal budget is currently spent on what, see the true breakouts here.

This is going to be THE issue of the election. That is, the question of whether the US government exists to  protect our borders, enact legislation, print money, oversee the courts, and work for the interests of the citizenry, or whether government ceases to exist at all. And make no mistake, the ultimate goal of Ryan and Norquist is to destroy government so that the United States is a corporate fiefdom. Mitt's out of the mix on this one, so long as they give him the title, he doesn't actually care what else goes on around him. 

So get up, get informed, and get active. This is the seminal election: the one where we hold the line against the darkness or end up a third world nation. No snark  – it's that extreme.