The Hypocrisy of Republicans

When Paul Ryan's budget was released a couple of weeks ago, it included a proposal to change Medicare, to change it into a block grant that would radically change it, providing less for Seniors who have worked their entire life. Democrats seized on the movement, rightly denouncing it as a plan that would hurt seniors yet keep the Bush-era tax cuts for all levels, including reducing the corporate tax rate (which is already among the lowest in developed nations, and with tax breaks and loopholes, makes it even lower. Just look at GE.) Now, the Republicans are asking Democrats to "stop engaging in 'Mediscare' tactics", that is, to stop saying that the Ryan Plan, the Path to Prosperity, would end Medicare as we all know it, which all know. Hmm, that's interesting. Let me flash back to a year ago, when the Health Care Reform Act was being debated, the Republicans came out with true demagogy, by saying that Democrats were rationing Health Care, were creating Death Panels, and bunch of other bull. As Paul Krugman states in his Op-Ed piece in the Times,

Now, you may recall that the people who signed that letter got their current jobs largely by engaging in “Mediscare” tactics of their own. And bear in mind that what Democrats are saying now is entirely true, while what Republicans were saying last year was completely false. Death panels! Well, it’s time, said the signatories, to “wipe the slate clean.” How very convenient — and how very pathetic.          

Those 42 Republican freshmen were elected last year in part by using demagogy are now running scared, as they fear that Democrats were will give a taste of their own medicine, but instead of using lies and myths, they are using the cold, hard truth. As I said last year in this blog post, it was ironic that these were the same people who opposed Medicare when it was first proposed, said last year that the Health Care Reform Act would destroy it, and now want to turn it into block grant program that would change it as we know it. Quoting lastly from Mr. Krugman, it is those Republican freshmen who

Last year, older voters, who split their vote almost evenly between the parties in 2008, swung overwhelmingly to the G.O.P., as Republicans posed successfully as defenders of Medicare. Now Democrats are pointing out that the G.O.P., far from defending Medicare, is actually trying to dismantle the program. So you can see why those Republican freshmen are nervous.

But the Democrats aren’t engaging in scare tactics, they’re simply telling the truth...and that’s something voters ought to know.

Checkmate, Republicans.

How to reduce the deficit and balance the budget, from my point of view. (Part 3)

As you many know, we are locked in a fierce budget battle between Democrats and Republicans. Democrats went to raise taxes on top earners and mildly cut spending, while Republicans want to cut, no butcher spending and maintain and even reduce taxes on the top earners, claiming that if we raise taxes on the top earners, the economy will slow down because those are the people that produce jobs in this county. Thus, if any new regulation or taxes that is introduced, a minute will not pass before they label it as "job-killing."

To both parties, you are both wrong.

To balance the budget, you must raise taxes and cut spending at the same time. It's just common sense. Sure, it'll  involve make some tough choices, but when you have a growing deficit and debt, those choices are really necessary. Those who do make those tough choices and follow through with it display leadership, something we haven't seen from both Democrats and Republicans alike in a long time.

Heath Care and Social Security 

Here is where things get tougher and more darker. These are, besides taxes, some of the hardest parts to enact cuts or increases in the budget. Here, I choose to make several changes that help reduce the deficit, such as capping Medicare growth starting in 2013, increasing the eligibility age of Medicare to 70 years of age, and reducing tax breaks for employer-provided health insurance. Let us begin with the cap on Medicare growth. This proposal would cap the growth of Medicare, which is one of the most rapidly expanding programs in the Federal budget, and consumes much of it as well. The more time passes, the more urgent is it to reform it. The problem will only exacerbate when the first wave of the Baby Boomers retire. It would be capped at the rate of the GDP (Gross Domestic Product) plus 1%. Next up is raising the eligibility age of Medicaid to 70 years. This is simple- Americans are living longer, working harder and working longer. The current life expectancy for Americans today is roughly 78 years, much higher then it was in 1965 (70 years), when it was enacted as part of the Social Security Act of 1965. This would save $50 Billion more than raising the age to 68 would. The other thing that would be enacted is to reduce tax breaks for employer-provided health insurance by slowly adjusting the cap to match the rate of economic growth-not the growth of health care costs- which we all know that health care costs rise much faster than that of economic growth- yet another reason to reform Medicare. Over time, more employer spending on health insurance would be taxed. Lastly, Medicare is one most vulnerable programs when it comes to fraud and waste. Only 5% of Medicare claims is audited- a shockingly low number considering the number of claims that is made every year. Therefore, more and more claims, to the point of which at least 85%-90% of claims would be audited. Now up to Social Security. Here I would also raise the eligibility age to 70 years, again because people are living and working longer. This would help fix Social Security's shortfall, reduce benefits by encouraging people to work longer, thus paying payroll taxes longer that support Social Security. (For the record, I would also increase the payroll tax to it's earlier levels before it was cut in 2010.) Lastly, Social Security benefits would be reduced for those of higher incomes. Those who earn less would continue to see their benefits grow over time with average wage increases. Those who earn more would see their benefits grow slower with inflation, while those who earn less would see their benefits grow at a rate between inflation and wage growth. 


So far, together with the two previous posts in this series, $217 Billion of the 2015 projected shortfall of $418 Billion has been accounted for, and $1,293 Billion of the 2030 projected shortfall of $1,345 Billon has also been accounted for. Here is a breakdown-

• Domestic Programs and Foreign Aid- $59 Billion out of the $418 Billion shortfall in 2015, and $62 Billion out of the $1,345 Billion shortfall in 2030 has been sliced off.
• Military- $61 Billion out of the $418 Billion shortfall in 2015, and $107 Billion out of the $1,345 Billion shortfall in 2030 has been sliced off.
• Health Care- $78 Billion of the $418 Billion shortfall in 2015, and $823 Billion out of the $1,345 Billion shortfall in 2030 has been sliced off.
• Social Security- $19 Billion of the $418 Billion shortfall in 2015, and $301 Billion out of the $1,345 Billion shortfall in 2030 has been sliced off.             

Next up- Taxes.

Cutting & Taxing-This is the third in a series of articles that will examine how to balance the Federal Budget and in the long run, reduce the long term deficit.