The Aurora Victims (and the Rest of Us) Deserve a Health Care Safety Net

Jul 31, 2012Tim Price

The Aurora shooting has sparked debates over gun control, but health care reform is just as important for the uninsured victims.

The Aurora shooting has sparked debates over gun control, but health care reform is just as important for the uninsured victims.

Just 11 days ago, a shooter opened fire in a movie theater in Aurora, Colorado, killing 12 and injuring 58 others who had gathered for the midnight premiere of The Dark Knight Rises. In the wake of these tragic events, a debate has erupted over gun control. (This happens every now and then when we’re reminded that the authors of the Second Amendment might not have meant for someone to be able to buy 6,000 bullets online with no questions asked.) But as we mourn those who were lost and extend our sympathies to their grieving families, we shouldn’t forget that the suffering continues for many who survived the shooting. As Dashiell Bennett of The Atlantic Wire notes, “Most of the wounded are expected to have medical costs in the hundreds of thousands, if not millions, of dollars and many appear to have inadequate or non-existent coverage.” This burden could add more tragedy to the lives of those who have already experienced too much. But while we may wonder if more sensible gun laws or better mental health care could have prevented the shooter’s rampage, we know for sure that a stronger social safety net could have prevented the financial catastrophe that has followed in its wake.

As hospital bills pile up, uninsured and under-insured survivors of the shooting are being forced to rely on the kindness of strangers. The Associated Press reports that three of the five hospitals treating the Aurora victims are capping their fees or offering them free care. But that still leaves many to bear a heavy financial burden, including Caleb Medley, an uninsured man who was shot in the eye and placed in a medically induced coma. His family is raising private donations to cover what already amounts to over $2 million in medical bills.

The charity of those who have donated is certainly commendable, but while we wish Medley and his family all the best, we have to ask ourselves whether this is any way to run a country. If there’s a crime spree, we don’t pass the hat around to hire a private security firm to defend us. We have the police for that. If our homes catch on fire, we don’t just cross our fingers and hope one of neighbors will be nice enough to lend us their garden hose. We know firefighters will be there to help. So when it comes to medical emergencies, including random events like this one and also the kind that all of us will face at some point in our lives, why should the 50 million uninsured Americans be reduced to begging for help? If the Affordable Care Act is allowed to fully take effect, providing guaranteed coverage, expanded Medicaid coverage, and insurance subsidies for those who need them, that may no longer be the case. But that’s a big “if.”

There’s a story conservatives like to tell about our health care system, and as with so many of their stories, it involves their peculiar definition of personal responsibility. The story goes that if you’re a responsible person, as physically and mentally healthy as you are morally upright, you can obtain health insurance by working hard so that you can either be covered by your employer’s plan or purchase an individual plan. If you don’t have insurance, there are two likely explanations. The first is that you’re an irresponsible bum who wants everyone else to pick up the tab for your medical care. The other is that you’re a Galtian Übermensch who has planned ahead and saved up for your own private medical staff and organ-cloning lab in case of emergency. If you can’t obtain insurance because you’ve been denied due to a preexisting condition or because your employer doesn’t offer it and doesn’t pay you enough to buy it yourself, you don’t fit into this narrative, so please politely excuse yourself and go complain about it in a quiet room.

I last wrote about this argument and the problems with it when I discussed my own brush with death. That experience didn’t just deepen my appreciation for health insurance and my belief that everyone should be guaranteed coverage. It also made me aware of just how flimsy the GOP’s argument is. If I hadn’t had health insurance at the time of my accident, would I have been “responsible” for a driver blowing a red light and running me over as I was crossing the street? Should the firefighters and paramedics who saved me have instead patted me on the (broken) shoulder and said “Good luck with all that”? Are the uninsured victims of the Aurora shooting at fault because they didn’t set aside some rainy day money on the off-chance that a psychopath in SWAT gear would try to murder them while they were enjoying a night out at the movies?

Claims like these clash with common sense and basic human empathy, which is why they’re rarely made explicit. But it may take events like the Aurora shooting to highlight the extent to which they undergird the Republican approach to health care. To be fair, many conservatives would argue that they agree with the principle that everyone should have access to affordable health care but believe the best way to accomplish that is through the free market rather than government mandates. And many on the left would rightly point out that the Affordable Care Act is only a half-measure, a compromise with private insurers that won’t truly guarantee equal access to health care for all. But none of those criticisms are reflected in the policy agenda of the Republican Party, which has now repealed the Affordable Care Act 33 times and offered an alternative proposal zero times. Senate Minority Leader Mitch McConnell has explicitly said that covering the uninsured is “not the issue,” while Senator Orrin Hatch admits that the number of uninsured is disgraceful but maintains that “we cannot succumb to the pressure to argue on the left’s terms.” Indeed, why should the debate about health insurance focus on people who need health insurance? We should talk about something more fun, like our favorite vacation destinations or Mitt Romney’s dancing horse.

The Aurora victims may have been gathered to watch a movie about a benevolent billionaire who dedicates his life and fortune to righting society’s wrongs, but there’s a reason such stories are best left to fiction, and it’s not just that Warren Buffett wouldn’t look good in a bat costume. In the real world, we understand that there are vast and complex problems that we can’t solve through private charity alone, and for those problems we require strong public institutions and a reliable social safety net. People shouldn’t have to fear that they’ll be shot dead when they walk into a movie theater, but neither should they have to fear that they won’t be able to afford the cost of survival.

Tim Price is Deputy Editor of Next New Deal. Follow him on Twitter at @txprice.

Share This

The Republicans’ Medicaid Cruelty

Jul 30, 2012Jeff Madrick

This piece originally appeared in The New York Review of Books.

“The essential American soul,” claimed D.H. Lawrence, “is hard, isolate, stoic, and a killer.” While the rejection by five state governments of the Affordable Care Act’s Medicaid expansion may not precisely illustrate Lawrence’s heated observation, it does suggest a contemporary vein of cruelty in America that is deeply disturbing.

This piece originally appeared in The New York Review of Books.

“The essential American soul,” claimed D.H. Lawrence, “is hard, isolate, stoic, and a killer.” While the rejection by five state governments of the Affordable Care Act’s Medicaid expansion may not precisely illustrate Lawrence’s heated observation, it does suggest a contemporary vein of cruelty in America that is deeply disturbing.

A new study published in The New England Journal of Medicine shows that providing greater medical insurance coverage for the poor has saved lives. Moreover, the ACA’s expansion of Medicaid requires little state money, since the federal government will pick up more than 90 percent of the costs over time, and 100 percent of the costs for the first few years. Yet Texas, Florida, Louisiana, South Carolina, and Mississippi—which together account for more than a sixth of the overall US population—have already rejected the plan, and as many as twenty other states, including New Jersey, Missouri, Iowa, Nebraska, and Nevada, have indicated they may follow suit.

Furthermore, these states already have among the highest numbers of citizens with no health insurance. Twenty-five percent of non-elderly Texans have no health insurance, for example, compared to the national average of about 18 percent. If the Obama Medicaid reforms were fully implemented, 15 to 17 million of the nation’s 50 million without health insurance would be covered. In a report just issued in late July, however, the non-partisan Congressional Budget Office estimates that the Medicaid expansion will only cover some ten million more, or a full third fewer than anticipated, because of the rejection of the plan by large states like Florida and Texas and others who have not yet formally announced their intentions.

This is particularly troubling in view of how important the Medicaid expansion is to low-income Americans. The two Harvard economists who authored the NEJMstudy have found that there are 6 percent fewer deaths in several states that had expanded Medicaid in earlier years compared to nearly contiguous states that did not. Fortunately, according to the recent CBO report, three million of those who will not be covered in states that reject the Medicaid expansion will qualify for and probably buy insurance through another provision in the ACA—a program that provides subsidies to buy insurance for those who earn between 100 and 400 percent of the federal poverty level, which is $22,350 for a family of four.

What has enabled states to reject the expansion is the curveball thrown by the Supreme Court in its decision in June to uphold President Obama’s Affordable Care Act: not only did the court argue that the states need not participate in the new expansion, which the Obama administration had intended to be mandatory; it also said that the federal government could not withhold Medicaid payments for states that decide not to participate. Thus, the court created a way to undermine one of the most admirable achievements of the ACA, a sweeping expansion of a medical safety net for the neediest.

Read the full article here. 

Share This

New Deal Numerology: Broccoli Roberts

Jun 29, 2012Tim Price

This week's numbers: 80; 23%; 67%; 6%; 17 million

80... is an activist number. That’s how many years it’s been since the Supreme Court voted as conservatively as it does now, according to a recent study. But upholding Obamacare makes them liberals if you believe anything invented after electricity is unconstitutional.

This week's numbers: 80; 23%; 67%; 6%; 17 million

80... is an activist number. That’s how many years it’s been since the Supreme Court voted as conservatively as it does now, according to a recent study. But upholding Obamacare makes them liberals if you believe anything invented after electricity is unconstitutional.

23%... is a divided number. That’s how many of the Roberts Court’s rulings have split 5-4. It really helps make your decisions seem unbiased and binding when nearly a quarter of them could be changed by one guy flipping a coin.

67%... is an individualist number. That’s how many Americans support repealing the individual mandate. Large majorities favor the rest of the bill, but Americans are still uncomfortable with mandates despite growing support for gay marriage.

6%... is a mandatory number. That’s how many people will actually be affected by the individual mandate. And if they really don’t want health care, the IRS promises not to send agents to coat their medicine in peanut butter and feed it to them.

17 million... is an expansive number. That’s how many Americans the law’s Medicaid expansion will cover. But yesterday’s ruling makes it easier for Republican governors to reject those funds if they feel politics is literally more important than life itself.

Share This

The Start of Something Big: Obamacare May Renew Faith in Government

Jun 29, 2012Jeff Madrick

The Supreme Court ruling on the Affordable Care Act yesterday can be a pivotal point in the restoration of faith in government. 

With the affirmation of Obamacare, it is now up to the president to make clear to Americans how much help it will provide them. There are even bigger stakes than health care; this can be the pivot point around which faith in government can be restored. It is the main theme of our Rediscovering Government initiative.

The Supreme Court ruling on the Affordable Care Act yesterday can be a pivotal point in the restoration of faith in government. 

With the affirmation of Obamacare, it is now up to the president to make clear to Americans how much help it will provide them. There are even bigger stakes than health care; this can be the pivot point around which faith in government can be restored. It is the main theme of our Rediscovering Government initiative.

One can only hope the president won’t back off. Of course, the intense concern about the deficit can be hobbling, and it's a concern the president has too readily bought into. But it is now time to rejoice. Obamacare is full of what I’d call minimal decency, which is a big step up from the insensitive health care system the nation built—a cruel system because it left so many out. 

The law is complex but has so many good points, from closing the senior drug doughnut hole, to requiring insurance companies to take all comers regardless of pre-existing conditions, to ending lifetime caps on insurance payments, to providing understandable insurance plans for all managed by state exchanges, that it would take an hour or so if the president were to make a speech explaining them.

It also has faults, but not the ones the Republicans and extreme right are likely to point out, which will revolve around denying freedom in some way or other. Let's remind the anti-government right that healthy people are far freer than unhealthy ones.

Costs are an issue. Sadly, the Supreme Court majority voted to allow states to deny Medicaid coverage in the new bill. But perhaps this will be a rallying point for political activity in state capitals. Obamacare does have some mechanisms to reduce general costs, but we will need more effective ones to deal with rising health care costs in the 2020s. Let’s remember that an affordable public option—an alternative to private insurance—could eventually be added if the public starts to support Obamacare and elects congressional representatives willing to vote for such an option. This could do a lot to keep costs down.   

Here’s a link to a piece I did on Obamacare for the New York Review of Books that may be of some help. 

Again, however, Obama should use his health care victory as a message that government is necessary, can work, and will make America a far better place. The purpose of government is the issue of the age.

See the article from today’s New York Times, by Mark Landler, which repeats many of our own themes about government. Let’s try to make this a new beginning. As the economist Annette Bernhardt just said to me, “the president now has a second chance.”

Roosevelt Institute Senior Fellow Jeff Madrick is the Director of the Roosevelt Institute’s Rediscovering Government initiative and author of Age of Greed.

Share This

Mike Konczal on “Fireside Chats”: Tough Times make Liberal Reform Tougher

Jun 5, 2012Danielle Bella Ellison

In the latest episode of “Fireside Chats,” Roosevelt Institute Fellow Mike Konczal talks with David Frum, Daily Beast writer and author of the new novel Patriots. In the clip below, they take on why Democrats have had trouble gathering support for stimulus programs during the current recession. “We’ve gone from Speaker Pelosi and the new Obama presidency and the idea of this wave of progressive energy to really trying to fight between the center and the center right,” Konczal notes.

In the latest episode of “Fireside Chats,” Roosevelt Institute Fellow Mike Konczal talks with David Frum, Daily Beast writer and author of the new novel Patriots. In the clip below, they take on why Democrats have had trouble gathering support for stimulus programs during the current recession. “We’ve gone from Speaker Pelosi and the new Obama presidency and the idea of this wave of progressive energy to really trying to fight between the center and the center right,” Konczal notes.

As Konczal explains, “The real New Deal that we think of – the core economic security and managing the business cycle and so on – occurred in ’35,” when the economy was expanding. Meanwhile, “the conservative agenda to roll back the Great Society and the New Deal” unfortunately becomes more feasible in tough economic times like ours. The public becomes more risk averse and prefers austerity policies to big and potentially risky spending programs. Major liberal reforms, however necessary and beneficial they may be, are just very hard to pass during bad economic times.

The current grim economic condition, as well as the increase in media culture and accelerating ethnic change, have caused a transformation of American politics. Watch the full conversation below in which Konczal and Frum discuss this transition, what a Romney budget would look like, and the future of Obamacare.

Share This

Why the Unemployed Are the "Forgotten Man" of 2012

May 31, 2012Tim Price

Instead of finding a solution to the jobs crisis, today’s politicians are making life harder for the unemployed.

Instead of finding a solution to the jobs crisis, today’s politicians are making life harder for the unemployed.

The “Forgotten Man” may be most commonly associated with Amity Shlaes’s book of the same name, an alternate history in which the New Deal made the Great Depression worse. But back in the spring of 1932, while campaigning against incumbent President Herbert Hoover, FDR invoked the phrase in a now-famous radio address. In it, he called for a policy response to the Great Depression that would “rest upon the forgotten, the unorganized but indispensable units of economic power,” policies that would “build from the bottom up and not from the top down, that put their faith once more in the forgotten man at the bottom of the economic pyramid.” The un-Shlaesed among us will recognize that the programs he launched once elected did exactly this, lifting up millions of Americans who had fallen to the bottom of the economic ladder – much to the chagrin of those still clinging jealously to the top rungs. But it seems there’s no such help coming to today’s forgotten men and women, the millions of unemployed Americans who our policymakers alternately overlook or actively punish for their misfortune.

It probably sounds strange to say that the unemployed have been forgotten when the state of the economy is the centerpiece of this year’s elections. But while politicians on both sides of the aisle talk a lot about the economy and jobs in the abstract, they’re easily distracted by minutiae and rarely seem to give much thought to the unemployed as living, breathing people. President Obama’s current economic plan seems to consist of reminding voters that Bain Capital once bankrupted a steel mill in Kansas, while Mitt Romney uses 8 percent unemployment as a cudgel against the incumbent but offers no solutions of his own besides something something tax cuts blah blah confidence.

Meanwhile, as Shaila Dewan reported in the New York Times this week, “Hundreds of thousands of out-of-work Americans are receiving their final unemployment checks sooner than they expected, even though Congress renewed extended benefits until the end of the year.” Over 5 million Americans fall into the category of long-term unemployed, meaning they have been out of work for over six months. Yet by next month, Dewan notes that over half a million of them will have prematurely lost their unemployment benefits this year thanks to cutbacks at the federal level.

At the same time, state governments are forcing new applicants to jump through more and more hoops to get out of paying them the benefits they deserve. Though 27 percent of all unemployed Americans received state benefits last year, Florida Governor and Observer-lookalike Rick Scott cut the number in his state to 15 percent last year by imposing particularly onerous requirements. The most extreme of these efforts was his attempt to subject unemployment applicants to a mandatory drug test, which was blocked (for now) by a federal judge. Florida may not give you your unemployment benefits, but by God, you’re going to give the Sunshine State your urine.

Given how many Americans are out of work, they would seem to form a natural constituency for politicians eager to win over swing voters. (That sounds cynical, but let’s assume for the sake of argument that altruism isn’t a major factor here. I know, it’s a stretch.) Yet instead of courting their support, policymakers are treating them like misbehaving puppies who need to be whacked over the nose with a newspaper. What gives? In part, this is due to conservatives’ knee-jerk opposition to government intervention and their belief that UI benefits can prolong high unemployment by discouraging recipients from seeking work. Studies have shown that UI benefits may be responsible for a fraction of a percentage point of our current unemployment rate, but Mike Konczal has a good rundown of why extending them provides a net economic benefit anyway. Aside from these policy differences, politicians in general just aren’t responsive to the needs and desires of anyone except for their richest constituents and Super PAC funders, who aren’t very concerned about whether some laid off factory worker in Ohio can feed his kids this week.

But there’s more to this conservative opposition than ideology or apathy. Cutting back on benefits is one thing, but why should they go out of their way to denigrate and humiliate the jobless? Mark Schmitt argues that Republicans found themselves adrift after they succeeded in passing welfare reform, since the “specter of the non-working poor could no longer be reliably evoked, and nothing with a similar power to divide voters has emerged to take its place.” But the economic crisis has proven to be a goldmine, providing them with a new underclass of jobless Americans whom they can portray as modern-day welfare queens. Look at these lazy slobs buying flat screens and diamond necklaces with their lavish unemployment benefits while the rest of us slave away at our hedge funds to make ends meet! “Much like arguments blaming the financial crisis on ACORN, Fannie Mae, and the push for low-income homeownership,” Mark notes, this approach “shifts the responsibility for unemployment onto the unemployed themselves.” For many politicians, this is the perfect one-two punch: it gets them the votes they need to win office, and once they’re in office, it takes away their responsibility to actually do anything about the biggest problem facing the country.

Back in 1932, FDR told voters that the Hoover administration had either “forgotten or it does not want to remember the infantry of our economic army.” Today’s Republicans, heirs to the Hoover legacy, would also like to obfuscate the crisis and make us forget the real circumstances of its victims. They know that if Americans see it clearly, they’ll also recognize that the only moral and practical response is one that provides more and better government aid rather than less. If progressive policymakers stop playing dead and start fighting back hard against these cuts to unemployment benefits, they may be surprised by how many troops they can rally to their side.

Tim Price is Deputy Editor of Next New Deal. Follow him on Twitter @txprice.

 

Empty pocket image via Shutterstock.

Share This

The Insane Idea Hidden in the Debate Over Obama's Spending

May 24, 2012Mike Konczal

Instead of debating whether Obama is responsible for a spending surge, we should ask why anyone expects the ratio of spending to GDP to remain constant in a recession.

Instead of debating whether Obama is responsible for a spending surge, we should ask why anyone expects the ratio of spending to GDP to remain constant in a recession.

There's a recent debate about whether or not a federal government spending boom has happened on President Obama's watch. This was kicked off two days ago by Rex Nutting's post at MarketWatch, "Obama spending binge never happened." Nutting notes that "federal spending is rising at the slowest pace since Dwight Eisenhower brought the Korean War to an end in the 1950s." He argues that the 2009 fiscal year, outside the stimulus spending, belongs to President Bush, as it was four months into that budget when Obama entered the presidency. He draws on OMB's numbers, which you can access here.

As you can imagine, the right wing has gone into action. Here's "Actually, the Obama spending binge really did happen" by AEI's James Pethokoukis, which argues that you must look at the government spending as a percentage of GDP to see the increase. Now there's a technical debate about how to approach the numbers in the 2009 fiscal year, and there's a fair debate on how to understand the increase in automatic stabilizers, such as unemployment insurance. Do they "belong" to Obama, given that they were already starting up due to a recession that started in December 2007? And then there's the economic debate: shouldn't the proper response have been to run a much larger federal government spending program?

But underneath it is an insane debate about an insane idea -- that the government should keep a consistent ratio of government spending to GDP in a recession. The attack on Obama is focused on this number without acknowledging the crazy part of what this number actually does in a recession.

Let's run through a quick example to show why I think this is insane. Imagine a government spends 20 percent of GDP this year, there is no expected GDP growth in the next year, and the government will spend the same exact amount of money next year. And then imagine that GDP drops 2.7 percent for the year, as it did from 2008-2009, for this hypothetical economy.

Now even though there is no additional money spent, government spending as a share of GDP will go up. The number goes up if the numerator increases (governments spend more) or the denominator decreases (GDP falls in a recession). It goes up to 20.6 percent in this hypothetical example. If the government wanted to keep the 20 percent ratio consistent, it would have to cut spending. But in a weak economy, in the middle of a recession, the last thing you want to do is cut government spending -- that will make the recession worse, which will decrease GDP further. Then you have to cut government spending even further, which creates a nasty loop.

Federal government spending as a percentage of GDP went from 20.8 percent in 2008 to 25.2 percent in 2009. How much was GDP falling? If GDP had grown 3.4 percent as it had done the year before, instead of dropping 2.7 percent, spending as a percentage of GDP would have gone to 23.7 percent. That means a third of the rise in government spending as a percentage of GDP is a mechanical effect of GDP falling in the Great Recession. And if GDP didn't fall in the Great Recession, automatic stabilizers wouldn't have kicked in and there wouldn't have been the stimulus bill, meaning less spending.

It is worth noting that one reason why the Great Recession wasn't a Great Depression was likely because of the increased size of government spending in the economy compared to the 1920s.  Here's Josh Mason in a great post:

We always ask, why was the Great Recession so deep? But you could just as well turn the question around and ask why, despite initial appearances, did it turn out to be not nearly as deep as the Depression?
 
I can think of four families of answers....The second answer would be that the sheer size of government makes a Depression-scale collapse of demand impossible, regardless of policy. In 1929, with government final demand only a couple percent of GDP, autonomous spending basically was investment spending, especially if we think at the global level so exports wash out. Today, by contrast, G is significantly larger than I (about 20 vs 15 percent of GDP), so even if private investment had collapsed at the same scale as in 1929-1933, the percentage fall in autonomous demand would have been much less. (And of course that fact alone helped keep private investment from collapsing.) Interestingly, despite Hyman Minsky's association with stories about finance, this, and not anything to do with the financial system, was why his answer to the question Can "It" Happen Again was, No. Policy is secondary; big government itself is the ballast that stabilizes the economy.

And, for the record, it's a massive shame that government spending didn't go up more, reducing unemployment, getting the economy back on track, and ultimately really bringing down the debt-to-GDP ratio.

Mike Konczal is a Fellow at the Roosevelt Institute.

Follow or contact the Rortybomb blog:
  

 

Share This

Mark Schmitt: Are Romney and the GOP All Talk on Spending Cuts?

May 21, 2012

In the latest episode of our weekly Bloggingheads series, "Fireside Chats", Roosevelt Institute Senior Fellow Mark Schmitt and Jamelle Bouie, writing fellow at The American Prospect, discuss

In the latest episode of our weekly Bloggingheads series, "Fireside Chats", Roosevelt Institute Senior Fellow Mark Schmitt and Jamelle Bouie, writing fellow at The American Prospect, discuss whether Mitt Romney is conservative enough to actually go through with the cuts to social welfare programs that Republicans have long demanded. In the clip below, Mark points out that Republicans love talking about spending cuts, but they're not so big on implementing them. In the clip below, he notes, "We’ve all the seen the game where the Republicans talk of budgets and cuts, but in fact they don’t really want to pay the price of having those things becoming a reality" and that "actually making the cuts and particularly making the cuts that affect the middle class is a huge political risk."

While there are a lot of Tea Party conservatives who have been successful in moving the Republican Party farther to the right in the past few years, Mark and Jamelle argue that there is a difference between them and more mainstream conservatives, like John Boehner, who just want to have their tax cuts. Referring to the latter group, Mark says that "if they have the low taxes they don’t really care about the rest." However, he argues that there are now a significant number of conservatives in power who adamantly believe that there is a difference between Social Security and Medicare, which people have paid into, and other programs, which are "just giveaways."  If Romney is elected, Jamelle believes that these members of the GOP will seize the opportunity to push for cuts.

Mark also points out that the rhetoric from the Republican Party and Mitt Romney keeps changing, so it's hard to know exactly what they will ultimately do. Regardless, Mark notes that Republicans are focusing on a limited group of people. He says "we’ve never really seen a party that actually draws such a sharp generational line." Since older folks are more affected by Medicare and Social Security, "It also puts yourself on the side of people who are less likely to be around in the future." He concludes that "it’s a big gamble politically."

Check out the rest of the video to listen to Mark and Jamelle talk about the changing rhetoric of the Republican Party, the demise of Americans Elect, and a crazy new Republican Super PAC.

Share This

Mark Schmitt: Are Romney and the GOP All Talk on Spending Cuts?

May 21, 2012

In the latest episode of our weekly Bloggingheads series, "Fireside Chats", Roosevelt Institute Senior Fellow Mark Schmitt and Jamelle Bouie, writing fellow at The American Prospect, discuss whether Mitt Romney is conservative enough to actually go through with the cuts to social welfare programs that Republicans have long demanded. In the clip below, Mark points out that Republicans love talking about spending cuts, but they're not so big on implementing them.

In the latest episode of our weekly Bloggingheads series, "Fireside Chats", Roosevelt Institute Senior Fellow Mark Schmitt and Jamelle Bouie, writing fellow at The American Prospect, discuss whether Mitt Romney is conservative enough to actually go through with the cuts to social welfare programs that Republicans have long demanded. In the clip below, Mark points out that Republicans love talking about spending cuts, but they're not so big on implementing them. In the clip below, he notes, "We’ve all the seen the game where the Republicans talk of budgets and cuts, but in fact they don’t really want to pay the price of having those things becoming a reality" and that "actually making the cuts and particularly making the cuts that affect the middle class is a huge political risk."

While there are a lot of Tea Party conservatives who have been successful in moving the Republican Party farther to the right in the past few years, Mark and Jamelle argue that there is a difference between them and more mainstream conservatives, like John Boehner, who just want to have their tax cuts. Referring to the latter group, Mark says that "if they have the low taxes they don’t really care about the rest." However, he argues that there are now a significant number of conservatives in power who adamantly believe that there is a difference between Social Security and Medicare, which people have paid into, and other programs, which are "just giveaways."  If Romney is elected, Jamelle believes that these members of the GOP will seize the opportunity to push for cuts.

Mark also points out that the rhetoric from the Republican Party and Mitt Romney keeps changing, so it's hard to know exactly what they will ultimately do. Regardless, Mark notes that Republicans are focusing on a limited group of people. He says "we’ve never really seen a party that actually draws such a sharp generational line." Since older folks are more affected by Medicare and Social Security, "It also puts yourself on the side of people who are less likely to be around in the future." He concludes that "it’s a big gamble politically."

Check out the rest of the video to listen to Mark and Jamelle talk about the changing rhetoric of the Republican Party, the demise of Americans Elect, and a crazy new Republican Super PAC.

 

Romney image via Shutterstock.

Share This

Social Security: It’s for Young People, Too

May 9, 2012Elisa Walker

Social Security is not just for the elderly, it's an important investment for everyone. 

I’m a young American; I value Social Security; and this week in particular, I’m feeling reassured that Social Security is on solid footing and will be there for me when I need it. In fact, I see it as a great investment. 

Social Security is not just for the elderly, it's an important investment for everyone. 

I’m a young American; I value Social Security; and this week in particular, I’m feeling reassured that Social Security is on solid footing and will be there for me when I need it. In fact, I see it as a great investment. 

To some, these statements might seem unrealistic, especially given all the negative media coverage that followed the release of the 2012 Social Security Trustees Report last week. But despite the doomsday responses, the reality is actually reassuring–especially for today’s young people, who are used to hearing misleading accounts to the contrary.

Social Security is fully financed until 2033–in other words, its ongoing income plus accumulated savings can cover all of the benefits due until then. And over the next 75 years (through 2086, the end of the trustees’ estimates), it’s 85% solvent, or able to pay 85% of its obligations without any changes. That’s a pretty solid base to build on.

There’s much to celebrate: 

  • Social Security is one of the most successful government programs in history. Since 1935, it has collected $15.5 trillion and spent $12.8 trillion, leaving a balance of $2.7 trillion in its reserves.
  • The reserves will continue to grow to about $3.1 trillion by 2020. If Congress acts by then, there may be no need to spend them down.
  • Social Security has responded to the recession and the slow recovery by performing exactly as it was designed to do. In fact, Social Security is an unsung hero of the recession: by pumping out benefits on time and in full, it has helped keep the national economy–not to mention the personal finances of the 56 million people who receive benefits–in better shape. The Center for Rural Strategies has documented that Social Security benefits provide a crucial chunk of total personal income at the local level, especially in rural counties. This makes a real difference to the small businesses and local economies in America’s towns and cities.

Everyone knows that Social Security is critical to today’s seniors, but in fact it’s critical to all generations. It’s the largest federal benefit program for children, with nearly 7 million children receiving part of their family income from Social Security, mostly after the death or disability of a working parent. And if it weren’t for Social Security, how many more of the elderly would have to move in with their adult children? How many disabled workers or surviving widows would face even greater difficulties feeding their families?

Although it may come as a surprise to many of today’s young workers, Social Security is critical for us too. Besides supporting our parents when they retire, it will provide an essential foundation for our own retirement, as far down the road as that seems. Of course we all hope to do well, but think: today, to buy insurance paying a lifelong annuity (a fixed annual amount) at age 65 that would match the average Social Security retirement benefit ($1,230), plus partially keep up with inflation and continue to pay a widowed spouse, you’d have to pay about $430,000 up front in a lump sum. That’s an inconceivable amount for most people. Plus, other sources of retirement income, like pensions, savings, and housing values, are increasingly uncertain–so there’s a good chance that by the time today’s young adults are ready to retire, reliance on Social Security will be even greater than it is today.

For young workers and their families, Social Security also provides critical life and disability insurance. Consider a sample young family: a 30-year-old worker earning around $30,000 a year, with a spouse and two young children. For that family, Social Security disability and life insurance protection are each valued at close to $475,000. And it’s an unfortunate fact that a 20-year-old worker has a 3 in 10 chance of becoming disabled before reaching full retirement age. Again, Social Security is there, especially for those life-changing tragedies we can’t plan for.

That’s the crux of why Social Security is a worthy investment for young people, and indeed for everyone. It’s insurance, on a national scale: you pay in over your working career, in exchange for monthly income if you face work-ending retirement, disability, or death. Plus, it has everything you’d want from an ideal pension plan, including the fact that it pays benefits as long as you live, and those benefits keep up with inflation.

So let’s not let today’s young people, or workers of any age, be misled about this vital program. The truth is that we can be confident in Social Security’s future. Social Security is sound, facing only a fixable long-term revenue shortfall, not insolvency. And it will be there in the future for our generation, and for the generations that follow us. In the words of one blogger, “Social Security has had its ups and downs, but it’s in better financial shape now than it was a generation ago, and unless its enemies prevail, it will be there for you when you need it.”

Politicians who want to cut Social Security benefits always stress that current seniors should be held harmless, unaffected by any cuts. (They’re not dumb; they know seniors vote.) Instead, they talk about cutting benefits “out in the future.” While that may sound innocuous, it’s not. Young people, take note: it’s our benefits (not their own) that they propose to cut.

Instead of talking about benefit cuts, how about benefit improvements? Minor changes to Social Security–such as lifting the cap on taxable earnings, or gradually increasing the contribution rate–could more than cover the program’s long-term shortfall, with money left over to improve benefits (PDF). Now that’s the kind of future that we as young people should be investing in.

Elisa Walker is an Income Security Policy Associate at the National Academy of Social Insurance, where she has co-authored several briefs and fact sheets on Social Security policy.

This piece was originally posted in the National Academy of Social Insurance blog, on May 3, 2012.

Share This

Pages