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View Diary: Boehner, Ryan undermine GOP's next debt ceiling extortion (8 comments)

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  •  Completely Agree About Longer Term, But... (1+ / 0-)
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    lcrp

    Your take on the CBO numbers is spot on.  Over the next several years, the deficit situation improves.  But over time, the debt picture worsens, as health care (and especially Medicare costs) threaten more red ink.  (For more, see here.)

    The issue isn't whether the federal government should be planning for that longer term, but why action should be tied to the debt ceiling vote.  Again, this isn't just unprecedented (or was, until 2011).  The GOP threat to trigger a U.S. default could produce an economic cataclysm far worse than any projected increase in the U.S. debt.

    It's also worth noting that had the U.S. gone over the fiscal cliff, the debt situation would have improved dramatically.  But the near-term economy would have been battered and sent back into recession as the CBO forecast and the UK can testify.

    •  Here's why the focus on the debt ceiling, I think (1+ / 0-)
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      VClib

      it's because (1) everybody who is sane recognizes that something significant has to be done about Medicare costs over the long term; but (2) there is no political will to do something significant about Medicare costs over the long term.  

      So, those who think that something has to be done to address the long-term debt picture think that if they don't cause a crisis, it will never happen.  

      I agree with you that the debt ceiling is a horrible hostage to take, and I agree with you that default would be catastrophic.  I am NOT someone who says, "go ahead and default.  No big deal."  What I AM saying is that Washington is so dysfunctional that some people can't see any other way of making the significant reforms to Medicare that are necessary to avoid "death panels and sales taxes" OTHER THAN using a crisis to make it happen.  

      Yes, I am very unhappy with politicians on the right using the debt ceiling as a political ploy.  I think that's a horrible tactic.  But, at least they are recognizing that there's a big, big, big problem, in the long term, with Medicare. (See the Medicare Trustees Report, pdf here.) Frankly, the cries from the left about "don't touch Medicare" only reinforce the view that, unless there's a  crisis, nothing will happen, and we will be looking at Krugman's solution of "death panels and sales taxes" in ten years.   If politicians on the left would at least recognize the necessity about significantly reducing the growth in Medicare spending, and put their own solutions on the table with real numbers (and no, negotiating for drugs is not nearly enough) then I think you would hear much, much more condemnation of those on the right from people (like me) are are less partisan than practical.  

      •  What Often Gets Overlooked... (1+ / 0-)
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        shaso

        ...is how much Democrats in general and President Obama have already done and are willing to do to slow the growth in Medicare spending.

        After all, Obama hasn't just put $400 billion more in cuts on the table in pursuit of his "grand bargain."  The Affordable Care Act contains several measures to change the way hospitals and physicians are compensated by moving away from a strictly "fee for service" model.  Those new incentives are already having an impact, as Medicare hospital readmissions are down.  In addition,  to further control costs when they exceed yearly targets, the Independent Payment Advisory Board (IPAB) can make recommendations Congress can override.

        As it turns out, Medicare cost growth has slowed dramatically over the last several years.  (How much of this has to do with the recession and how much with reforms in the medical system is a subject of hot debate.)  But if these lower growth rates continued, the future of Medicare and the U.S. national debt looks much more promising.

        Of course, the Ryan House GOP budget repeals Obamacare benefits (though not its revenue), so all of these cost-reducing reforms are lost.  Instead, it looks to an unproven premium support model to drive down costs through "competitive bidding" in the private insurance market.  As I explain in the piece below, there are a lot of reasons to believe the GOP has it all wrong on that and other assumptions:

        "How the GOP Gets It All Wrong on Medicare in Five Charts"

        •  I'm not putting any stock in the Ryan Budget (1+ / 0-)
          Recommended by:
          VClib

          or the GOP projections.  

          What I'm relying on is the Medicare Trustee's Report (pdf here)

          that's the 2012 Report, AFTER the ACA is factored in.  And even assuming the most optimistic outcomes from the ACA about cutting costs (which the report says is far from certain), Medicare is still very, very unsustainable over the long term.  The most OPTIMISTIC assumption (assuming the most optimistic outcomes from the ACA, and good economic growth) says that,  if we continue to do the doc fix, Medicare will grow to 10% of GDP.  That's wildly, wildly unsustainable.  (In good years, that's over half of all revenue the federal government takes in going to Medicare alone.)  

          We'll see what the Trustees Report for 2013 says when it comes out next month.

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