The Devilish Detail of Obama’s Speech: Deep Medicare, Medicaid Cuts

The Devilish Detail of Obama’s Speech: Deep Medicare, Medicaid Cuts

The Devilish Detail of Obama’s Speech: Deep Medicare, Medicaid Cuts

The president plans to cut “waste, fraud and abuse,” but his proposal would in practice harm the neediest.


President Obama has erected what is likely to be the left flank in the debates of the Congressional Joint Select Committee on Deficit Reduction—the so-called “super-committee” that will define so much of this fall’s fiscal and economic discourse.

That flank is sturdier than some of the president’s critics on the left might feared it might be. But the flank is weak, very weak, in at least one key area: the defense of Medicare and Medicaid.

So what’s the balance that progressives should strike with regard to the speech? Let’s consider:

President Obama wants wealthy Americans to pay a little bit more.

That’s good.

President Obama rejects House Budget Committee chair Paul Ryan’s schemes to turn Medicare and Medicaid into voucher programs that shift money away from carrying for the needy and toward the accounts of private insurers.

That’s good.

President Obama rejects, at least for the time being, the prospect of increasing the Medicare eligibility age that he put on the table several months ago.

That’s good.

But President Obama was still compromising with the Tea Party right when he delivered his remarks on Monday. Indeed, he proposed $580 billion in cuts to health and welfare programs, with $248 billion coming from Medicare and $72 billion from Medicaid.

That’s bad.

Very bad.

The president would have us believe that the cuts can be made by addressing “waste, fraud and abuse.” The reality is that cutting a quarter-trillion dollars from Medicare will undermine the quality of care for seniors and the disabled. The Alliance for Quality Nursing Home Care estimates that Obama’s approach would lead to $42 billion in cuts for post-acute care providers placing patients, our workforce and local facilities at risk.”

The proposed cuts to Medicare and Medicaid will put new stress on the economy by making it harder to maintain hiring levels at the skilled nursing facilities that have been some of the real job creators in a period of layoffs and rising unemployment rates.

The proposed Medicare and Medicaid cuts place new stresses on working families, many of which are already struggling to care for elderly and disabled relatives.

And the proposed Medicare and Medicaid cuts will cause aging workers to think twice about retiring, thus reducing the number of openings for young workers.

Medicare and Medicaid are efficient programs. They are not perfect, but they have been pressured on “waste, fraud and abuse” issues for years; meaning that there is no chance that the cuts Obama proposes will be painless.

They will, in fact, be painful, for retired people and the disabled, for families, for workers and their unions, for communities and for the broader economy.

It is for this reason that FamiliesUSA, the progressive health policy group, is warning that proposed changes to Medicaid “shifts the burden to states and ultimately onto the shoulders of seniors, people with disabilities and low-income families who depend on the program as their lifeline.”

Congressional Progressive Caucus co-chairs Raúl M. Grijalva, D-Arizona, and Keith Ellison, D-Minnesota, are similarly concerned. “While we support cutting waste, fraud and abuse, we reject any proposal that cuts benefits in Medicare or Medicaid,” they say. “We reject false Republican assertions that the solution to our deficit is deep cuts to programs that millions of Americans rely on, and we would hope President Obama would as well.”

Instead of talking about cuts in Medicare and Medicaid, Obama and the Democrats should be talking up the expansion of Medicaid so that it can serve as at the basis for a true national healthcare program.

America does not need less Medicare and less Medicaid.

America needs “Medicare for All,” along the lines proposed by the Healthcare-Now! movement.

“The creation of the Super Committee makes three of our country’s most vital safety net programs—Medicare, Medicaid, and Social Security—targets for cuts,” explains Healthcare-Now!But these programs are not the problem, they are the solution. Our social insurance programs keep people healthy and out of poverty, which is particularly important during times like these when so many people are experiencing economic hardship. Medicare, Medicaid and Social Security should be strengthened, not cut. Medicare should be improved and extended to all.”

That’s right. By talking of cuts to Medicare and Medicaid, the president takes the debate in the wrong direction and, unfortunately, the “super committee” is likely to follow him there.

That does not mean that Healthcare-Now! and its allies in organized labor should back off and go silent. Quite the opposite. The great debates about austerity are yet to come. Ultimately, two sides will emerge as the murky middle (which the president tries, too frequently, to occupy) collapses. There will be those who are willing to cut Medicare, Medicaid and Social Security to balance budgets. And there will be those who recognize that cuts hurt rather than heal a broken economy.

Obama has moved toward the side of those who would ask the wealthy to pay their fair share in order to balance budgets. That is progress. But he needs to move further if he wants to catch up with economic reality and the aspirations of the American people.

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