If this report from the New York Times is accurate, then Mark Steyn needs to ratchet up his “complacency watch” rhetoric. According to the Times, the good tea-partying folks at FreedomWorks “crowdsourced” a deficit-reduction plan with more than 40,000 activists. The resulting estimated savings ($6 trillion over ten years) sound impressive, but not only are some of the numbers vague (how much savings will we garner from Obamacare repeal without substantial Medicare reform?), within the story was this ominous note:
When it comes to cutting Medicare, Medicaid and Social Security, the report said visitors to the site were “more cautious,” and “prefer reductions in peripheral elements,” like tightening eligibility for Social Security disability payments and reducing subsidies to teaching hospitals.
Let’s break this down as simply as possible: If there is no significant entitlement reform — especially to our health care entitlements — we’re facing fiscal disaster. We can close the Department of Energy, end foreign aid, dangerously cut defense, and shutter the Department of Education, but unless we figure out a way to control and moderate trillions of dollars of transfers directly into the pockets of, well, the nation’s most faithful voting blocs, we’re just delaying the inevitable. Consider this, from the Heritage Foundation:
In June, the Congressional Budget Office (CBO) updated its budget projections for the next 25 years, providing policymakers with some context of the size of the federal debt. The office’s conclusion: The budget outlook is “daunting.”
The CBO analysts are gloomy with reason. Post-war federal spending has averaged about 20.5 percent of gross domestic product (GDP). By 2035, mandatory federal health spending (Medicare, Medicaid, and the exchange subsidies) and Social Security are estimated to be at least 15 percent of GDP, which will bring total federal spending to more than 27 percent of GDP. Medicare alone is expected to account for 6.7 percent of GDP in 2035, surpassing Social Security and defense spending as the largest federal program.
If our own core conservative activists aren’t on board with serious entitlement reform, how can we expect politicians to transform the budget? As much fun as it is to obsess over the election (and, believe me, I’m obsessing), the real battle is cultural. Decades of entitlements have transformed the relationship between citizen and state to such an extent that even our own conservative base can’t quite seem to bring itself to make the truly hard choices.
When it comes to changing hearts and minds, we’ve got a long — very long — way to go. In the race between public awareness and fiscal collapse, I fear that awareness is losing, badly.
Well duh. People seem to forget that those same Tea Partiers at town halls screaming about the deficit were also screaming not to touch social security - and a lot of the 'conservative' leadership just played along on both counts.
We are a country that wants services without the taxes. If we manage to somehow balance the two it's probably going to come out on a side a lot of conservatives won't be happy about.
Reply to this commentLinkReport AbuseWhen I was a kid at dinner, I'd always eat the things I preferred before the spinach, but in the end I always ate the dang spinach as the nagging started midway through the meal. As a practical matter, how about we start eating the deficit reduction meal first and THEN we can start the nagging about the entitlements? Like spinach, everybody knows it's on the plate and has to get eaten.
Reply to this commentLinkReport Abuse"If this report from the New York Times is accurate..."
If it says something bad about conservatives, my guess is it's not accurate.
Reply to this commentLinkReport AbuseAs a republican activist who has other things to do with her time. This really bothers me. If things do not start looking up I may reconsider the time I spend being a workhorse of sorts for the republican campaigns and all the money I keep sending out the door to "conservative" candidates.
Reply to this commentLinkReport AbuseI am really sorry that Mitch Daniels didn't run (though I respect his reasons for not doing so). He wouldn't have a prayer of winning the nomination probably; but assuming he would have gotten enough support to be invited to the debates, we would have had some serious discussion about these problems.
Reply to this commentLinkReport AbuseUntil we have a leader who articulates clearly and persuasively the necessity for serious entitlement reform and the specific such reforms necessary to solve our fiscal crisis, there's bound to be hesitancy because people want the details and want to understand them. The grip of entitlement culture cannot be loosened without a leader who can make the difficult case for it. Persuasive abilities are essential, but the GOP is throwing away a perfect opportunity because the only presidential candidate who shows evidence of any persuasive abilities, Romney, is the candidate least likely to be a leader when it comes to genuine entitlement reforms. It is difficult to believe this party is about to nominate the one candidate who hates to discuss health care reform because it highlights his liberal Romneycare advocacy. Unless there's a successful movement to draft Paul Ryan, we are where we are.
Reply to this commentLinkReport AbuseJust proves what I've been thinking for a while. Despite the almost collapse in 2008, despite the facts on the ground about our deficit and debt and entitlements, etc. Despite what is going on in Europe, especially places like Greece.
The American people simply are not ready to have an adult conversation yet. And it doesn't matter if they are Democrats, Republicans or independents.
"Decades of entitlements have transformed the relationship between citizen and state to such an extent that even our own conservative base can’t quite seem to bring itself to make the truly hard choices."
That is exactly correct. 70 years of this cr*p and people even like Sean Hannity gripe about how "they payed into it".
Hey, I've been paying into it as well. I'm 40 years old and due to my own bad choices I have ZERO RETIREMENT SAVINGS and ZERO SAVINGS OF ANY KIND and a debt up to the hilt, including student loans. There is no end in sight for me, although I'm putting myself together, learning better how to handle finances and trying to put a plan together to save and pay down, and eventuall pay off, my debt.
And I don't want the Social Security anymore. Let me keep my money from here on out and I don't care that I will not receive a SS check.
The only people that deserve protection are those already on it or about to go on it due to the well known legal doctrine of "reliance".
WAKE UP, AMERICA! The party is OVER.
Reply to this commentLinkReport AbuseI'm old enough to remember when the term "entitlement" was used ironically. I'm 43.
I wish these right wing authors would do some history for us and tell us how medical bills got paid before 1965. How did old folks get taken care of before SS? What did poor folks do when there was no food stamps, welfare, housing, EITC? How did people get educated before public schools? Maybe if we came up with some great solutions that people can agree with and argued based on real history we could start to change this culture. I fear that too many of us have no idea how anything could work without a big local/state/fed gov't there to pick up the check.
Please, tell me. I want the ideas.
Reply to this commentLinkReport AbuseI was born in 1939 - this is what I remember from my earlier years
*If you had cancer, you got a good surgeon and hoped s/he got it all. Chemotherapy following the surgery was non-existent. Radiation was around but often did more harm than good.
*Some kinds of cancer were a death sentence.
*Women did not have annual mammograms and Pap smears.
*No one had a heart bypass or any other bypass.
*There were no transplants - no second hand kidneys or hearts or whatever.
*Men didn't have PSA tests.
*Medical insurance, several years before that, was called hospitalization and covered you only when you were hospitalized. As people began to game the system and be hospitalized more casually, insurance began to cover those procedures outside the hospital.
*As late as the 1970s, even under union negotiated insurance, nothing in an annual check-up was covered - we skipped them and got labs to run blood tests and tell us if things were out of line - if so, we saw a doc.
*You paid something substantial up front or you had no pre-natal care. Getting pregnant was a choice.
*No prescriptions were covered.
*We paid our hospital bills or we didn't get out.
*We paid our docs or they didn't see us again.
*When we gave out of money, we died. That still happens for those who have a long-term illness but who are too young for Medicare or Medicaid.
I don't know that I want to go back to those days, but I don't know that we can afford to go forward for everyone and I have serious doubts that those over 65 (including me and mine) should be at the head of the line.
Reply to this commentLinkReport AbuseSo Dave, what is the solution? If Medicare, SS, and DOD are the biggest budgetary culprits, how do we resolve them?
If it's up to me, the first thing I hit is payroll. Granted, with the current unemployment generated by state and local public lay-offs, the federal round will be pretty brutal. We could consider the work-share program used with high success by Germany, but that smacks too much of socialism and is contrary to the American all-or-nothing mentality. So fire a lot of people, but make sure we don't re-absorb those expenses by providing them with unemployment, Medicaid, or food stamps. Instant $$$. That newly-fired commo SSG may be depressed to learn that his technical skills don't really have any relevance in the civilian market, but such is life. Just like that Journalism major, should have picked a better field.
Now, on to the services provided these agencies. Close up all remaining military posts in Europe and mainland Asia. Restructure our strategic priority to be air-based forced projection (think Bosnia). Our borders will be just as safe but international genocide may pick-up (think Ruwanda ....... and Bosnia, now that I think of it). Medicare/Medicaid will need some pretty hefty paring down as well. That means a good number of hospitals currently relying on Medicare-reimbursement revenue will close, but that's an artificial bubble that had to pop at some point. Expensive end-of-life treatments will also end, ala Death Panel most likely.
The good news? No new taxes. You can also roll back any regulation you want, but no amount will allow Americans to manufacture cheaper than Asians, nor will any amount of drilling contain the demand growing out of China. Free trade at its best and most indifferent.
Don't know about you, but I'm brushing up on my Portugese and Cantonese and keeping my resume updated (VERY open to relocating). Next couple of decades are shaping up to be pretty rough for Americans.
Reply to this commentLinkReport AbuseI am afraid we have to have fiscal collapse before people will take this seriously. and it is our (the us population) own fault. Any time a politician brings up serious reform the press attacks and over half of the population believes the rhetoric that any change will through grandma to the curb.
I just hope we end the band aids and get on with the collapse so I and my generation take the brunt of it and perhaps my daughter can get a fresh start.
There are very few like ladykrystyan above.
Reply to this commentLinkReport AbuseAn article last week in NEJM ("Rethinking Health Care Labor") asserted that 56 percent of health spending is attributable to labor compensation. Data on the American Hospital Association website suggests that nearly 70 percent of hospital costs go toward labor in one form or another. Presumably physician offices are even more labor intensive. Yet even if one accepts the conservative NEJM estimate, it remains that much of what has passed for rising health costs has really been an explosion of health sector compensation -- which (not surprisingly) has grown about three times faster than compensation in other sectors since 2000. One question is whether doctors will be less interested in seeing patients if they are paid less. For example, would knee doctors, who average $442,000 a year, be less interested in working for $342,000? I would be astounded if they were. In fact, some might even work harder.
The sticker question is how to bring bloated labor costs down. Certainly, competition isn't doing it. In today’s health markets, oligopoly and monopoly are the rule rather than the exception. More than 90 percent of Americans face “highly concentrated” hospital markets, according to FTC standards. Ten percent of metropolitan statistical areas have hospital monopolies. Moreover, local markets are undergoing a new wave of vertical concentration. The share of doctors employed by or aligned with hospitals has doubled in the last three years alone. Accenture estimates that only one-third of physicians will remain independent by 2013.
Conservatives need to recognize that the ability to fix prices for private payers is tantamount to taxing power, and restraints on its abuse serve a vital public interest. Unregulated markets are not necessarily free markets. Until we are willing to address to market based roots of health cost growth, living standards will fall as entitlements spiral out of control.
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