Obama's "Mandate" To Slash Medicare, Medicaid & Social Security

by: Paul Rosenberg

Sat Jan 17, 2009 at 14:41

Obama To Hold Fiscal Responsibility Summit

President-elect Barack Obama will convene a "fiscal responsibility summit" in February designed to bring together a variety of voices on solving the long term problems with the economy and with a special focus on entitlements, he said during an interview with Washington Post reporters and editors this afternoon.

"We need to send a signal that we are serious," said Obama of the summit.

Those invited to attend will include Senate Budget Chairman Kent Conrad (N.D.), ranking minority member Judd Gregg (N.H.), the conservative Democratic Blue Dog coalition and a host of outside groups with ideas on the matter, said the president-elect....

Obama said that he has made clear to his advisers that some of the difficult choices--particularly in regards to entitlement programs like Social Security and Medicare - should be made on his watch. "We've kicked this can down the road and now we are at the end of the road," he said.

This is not just something he didn't run on.  It is, in fact, the exact opposite of what he ran on-or at least appeared to, as can be seen from economist Dean Baker's op-ed in The Guardian, a few days earlier, in which he wrote:

Although Social Security is paid for long into the future, Medicare does face problems due to the explosion of private sector health care costs. The way to address Medicare's shortfall is to fix the private health care system, as President Obama has pledged to do.

The truth of Baker's statement is readily apparent from the following chart, which I presented in my diary from last April, "Medicare Myths--Don't Blame The Boomers".  Our medical costs are far higher than other countries with a significantly larger share of older citizens:

Not only is Obama's "fiscal responsibility" kick at odds with his actual mandate and his own health care proposals, it reflects a deeply ideological worldview that--far from being bipartisan or "post-partisan"--is strongly opposed by solid majorities across the political spectrum.  It is the very essence of Versailles insiderism.

The Post reported:

Those invited to attend will include Senate Budget Chairman Kent Conrad (N.D.), ranking minority member Judd Gregg (N.H.), the conservative Democratic Blue Dog coalition and a host of outside groups with ideas on the matter, said the president-elect....

So, Blue Dogs in. Progressives? Not so much.  Surprised?  Didn't think so.  The agenda here "difficult choices--particularly in regards to entitlement programs like Social Security and Medicare" is straight out of the fiscal slasher movie on CNN last weekend, IOUSA, which Digby blogged about earlier in the week, and which was thoroughly debunked by economist Dean Baker and his associates at the Center for Economic and Policy Research (CEPR), which he co-directs, when it first came out in theatrical release last fall.

The materials CEPR put together included a viewer guide (PDF), a brief snippet of which gives some quick insight into who the players are,  But first, a little taste of how the guide debunks one of the underlying lies behind this "documentary":

15:10 - The film refers to ways to balance the budget, implying that this should be a target for fiscal policy.

In fact the government can run deficits forever, as long as the growth of debt does not exceed the growth in GDP. The essential condition for fiscal stability is that the ratio of debt to GDP does not rise over time.

16:00 - The films refers to deficits of $200-$300 billion as not doing well.

In fact, the government could sustain deficits of this size forever. With deficits at these levels, the ratio of debt to GDP would be falling.

16:29 - These deficits are described as being unsustainable over the long run.

Deficits in the range of $200 billion to $300 billion can be sustained indefinitely. If the U.S. government ran a deficit of $300 billion annually for the next hundred years, then the ratio of debt to GDP would fall to less than 4 percent.

And now, some of the co-conspirators in putting this over on the American people:

18:59 - Senator Judd Gregg says the debt absolutely guarantees that our children will have a worse quality of life than we do.

None of the standard projections from the Congressional Budget Office, the Office of Management and Budget or any other authoritative source supports Senator Gregg's assertion.

19:40 - Alice Rivlin blames just 3 programs (Medicare, Medicaid and Social Security) for most of the deficit problem.

The problem with Medicare and Medicaid is the broken U.S. health care system. Social Security will be fully financed from its designated tax until 2049. Therefore, it makes no sense to blame Social Security for the budget problem. The projected increase in its outlays over the next four decades is covered by taxes already collected or that will be collected....

27:00 - Robert Rubin says that there are very difficult trade offs in cutting spending or raising taxes.

It would have been worth mentioning reforming the health care system as a third possible way to deal with excessive deficits.

So, that's Judd Gregg, who's going to be at Obama's "Fiscal Responsibility Summit," and a couple of quinitessential Democratic insider heavyweights on fiscal affairs.  Not Paul Krugman. Not Joseph Stiglitz.  None of that Nobel Prize riff-raff. Also quoted elsewhere in the movie were Ron Paul and Warren Buffett.  Who knew that they were the very embodiment of Obama's victory?

Obama's ACTUAL Mandate

In sharp contrast to Obama's plans to slash Medicare, Medicaid and Social Security, there were some things he talked about quite freely during the campaign, and USA Today recently did a poll on them. So let's take a quick look at the poll, beginning with a bit of an intro from the story, "Poll: Americans believe Obama will deliver despite down times" [emphasis added]:

WASHINGTON - Americans are as down as they've been in decades about the state of the country and its polarized politics, even as they express soaring confidence that Barack Obama will be able to turn things around.

A USA TODAY/Gallup Poll finds stratospheric expectations for the incoming president that his own supporters acknowledge may be unrealistic. A majority of those surveyed say Obama will be able to achieve every one of 10 major campaign promises, from doubling the production of alternative energy to ensuring that all children have health insurance coverage....

The towering ratings Obama receives from most Americans will give him political capital as he tries to pass his proposals, including a mammoth economic stimulus package that he says will cost about $850 billion. Those high hopes could give way to disenchantment, however, when problems erupt or promises are delayed - something Obama already has warned Americans to expect.

Those surveyed distinguish among his campaign promises, ranking some as more crucial than others.

Their clear priorities are the issues that hit home. On a list of campaign promises, five pocketbook issues take the five top spots, among them expanding health care for children and reducing health care costs. They include doubling the production of alternative energy, a step Obama says would help reduce reliance on gas and its volatile market.

Seven of 10 call it "very important" to them personally that he keep those promises. His pledges to cut income taxes for working families and pass a stimulus package that will build and repair bridges, roads and schools also are among the top five issues.

Slashing Medicare, Medicaid and Social Security  obviously is not on the list of promises.  No one is clamoring for him to do that.  No one voted for him to do that.

Here is the summary table of results from the USA Today poll:

How important is it to you, personally, that Barack Obama keep these promises? And, just your best guess, will he be able to accomplish them?
Promises	Those who said "very important"	Yes, he will be able to accomplish them
Ensure all children have health insurance coverage	73%	62%
Double the production of alternative energy	70%	59%
Reduce health care costs for the typical American family by up to $2,500 per year	70%	56%
Enact a major spending program to strengthen the nation's infrastructure of bridges, roads and schools	60%	80%
Cut federal income taxes for 95% of working families	57%	53%
Withdraw most U.S. combat troops from Iraq within 16 months	51%	54%
Increase U.S. military strength in Afghanistan by at least two brigades	43%	68%
Lift restrictions on government funding of embryonic stem-cell research	42%	61%
Close the U.S. prison for terrorist suspects at Guantanamo	32%	59%
Make it easier for labor unions to organize	28%	59%
Source: USA TODAY/Gallup Poll of 1,031 adults taken by landline and cellphone Friday-Saturday. Margin of error: +/- 3 percentage points.

So, #3 on the list--with 7 in 10 saying it's "very important" that Obama deliver--is "Reduce health care costs for the typical American family by up to $2,500 per year."  And this is precisely what Baker is saying would be key to controlling the deficits that Obama is so worried about--but somehow forgot to explicitly hammer home during the campaign.

The Public Mandate For PRESERVING Medicare, Medicaid & Social Security

Now let's contrast the results of the USA Today poll with with the General Social Survey questions on spending on Social Security and protecting and improving the nation's health, questions which show a broad and powerful public mandate--stretching back for decades--for preserving or increasing national spending on health care and Social Security.  These same exact questions have been asked for several decades now, with only modest variations in the levels of support over the years.  This is the combined results for 2000, 2002, 2004 and 2006:

Spending on improving & protecting nations health
Is:	Liberal	Moderate	Conservative	All
Too Little	80.1	78.3	65.2	74.2
About Right	16.8	19.0	27.5	21.4
Too Much	3.1	2.7	7.2	4.4

Spending on Social Security
Is:	Liberal	Moderate	Conservative	All
Too Little	65.5	66.5	54.3	61.9
About Right	31.4	29.6	37.8	33.0
Too Much	3.2	3.9	7.9	5.1

As can be seen, the differences between conservatives and liberals in terms of thinking we're spending "too little" are in the 10-15% range, but even a solid majority of conservatives think we are spending too little on both.

This means that Obama is planning a course of action to the right of a majority of American conservatives.  How, exactly, is this "reaching out to them"?  Indeed, when one adds in those conservatives who think our spending levels on these programs are "about right", we find that Obama's planned policy direction is to the right of more than 9 out of 10 conservatives.

Where did he get a mandate to do that?