Obama has already suggested raising the retirement age for Medicare. Should that be the starting point for thinking about entitlement savings?
I wouldn’t want that to be the starting point, but as part of an overall package, that's balanced and fair. Given that we now have exchanges to purchase insurance because of the president’s health-care reform law, it makes it much more acceptable, much more reasonable, over a long period of time to gradually increase the age given that people are living so much longer.
Before the exchanges in the Affordable Care Act, it would really be unacceptable to raise the age. What would people do without insurance? Now that exchanges are going to be there, that’s going to be an alternative.
He wants to cut benefits on Medicare, in other words.
Paul Krugman addresses this bad idea of raising the eligibility age in Life, Death and DeficitsNew York Times 11/15/2012:
... it’s a cruel, foolish idea — cruel in the case of Social Security, foolish in the case of Medicare — and we shouldn’t let it eat our brains. ...
What would happen if we raised the Medicare eligibility age? The federal government would save only a small amount of money, because younger seniors are relatively healthy and hence low-cost. Meanwhile, however, those seniors would face sharply higher out-of-pocket costs. How could this trade-off be considered good policy?
The bottom line is that raising the age of eligibility for either Social Security benefits or Medicare would be destructive, making Americans' lives worse without contributing in any significant way to deficit reduction. Democrats, in particular, who even consider either alternative need to ask themselves what on earth they think they’re doing.
"There is no fiscal cliff," Trumka says in prepared remarks to the National Mediation Board Conference in Washington on Thursday. "What we’re facing is an obstacle course within a manufactured crisis that was hastily thrown together in response to inflated rhetoric about our federal deficit." ...
Trumka told HuffPost last week that the AFL-CIO, a federation of unions representing 11 million workers, will not support any deal including such cuts. "The voters yesterday rejected that notion soundly," he said the morning after the election. "The answer is, if it includes benefit cuts to Social Security, Medicare, or Medicaid, we'll oppose it." ...
But the AFL-CIO has said it's building a permanent political structure to hold progressive legislators accountable post-election, while large unions like the American Federation of State, County and Municipal Employees and the Service Employees International Union are launching campaigns aimed at preserving Medicare and Social Security. The labor coalition may see its political mettle tested soon when Democratic lawmakers open the door to trimming social insurance programs. [my emphasis]
Republicans and deficit hawks are raising unnecessary alarm over the so-called "fiscal cliff" to pressure President Barack Obama into a "grand bargain" he shouldn't make, progressive economists and scholars said Tuesday at a symposium.
"My professional and personal message at this moment is: Don’t panic," said James Galbraith, a University of Texas economist who organized the event. "This is not a moment for high drama. This is a moment for no drama." ...
Galbraith likened what Obama and the public are subjected to now to "a high-pressure sales job based on the exceedingly confident assertion of things that on further inspection you would find out are not true. "The right approach is to take a walk around the block, take a deep breath and have a cup of coffee," he said.
Michael Lind, author of Land of Promise: An Economic History of the United States, said he understood why conservatives are trying to put cuts to Social Security into the mix. "Their best chance is to create a completely artificial sense of urgency to bury the cuts in some grand comprehensive package," he said. "It's a brilliant political strategy. It's probably the only political strategy that can achieve what they want."
But the “cliff,” with its misleading metaphor of an imminent, irreversible fall, has been misconstrued by the media. These changes are not irrevocable; it’s not as if they can’t be fixed after January 1 (more on this later). But in true shock doctrine fashion, the ersatz crisis is being used to demand changes that would otherwise be politically impossible: cuts in Social Security, Medicare and Medicaid, along with deep cuts in basic government services, combined with tax increases. Wall Street billionaire Pete Peterson has enlisted bankers and CEOs in a multimillion-dollar campaign spearheaded by the hysterical Cassandras of debt, Alan Simpson and Erskine Bowles, former co-chairs of President Obama’s deficit commission, to demand action now. Editorial opinion and much of the punditry, along with a claque of supposedly bipartisan or nonpartisan lobbying groups, have dutifully echoed the call. Gaggles of senatorial aides have been meeting to explore what a deal might look like.
In an initially off-the-record campaign interview in late October with The Des Moines Register, Obama indicated that he intended to offer Republicans a deal similar to the one he offered House Speaker John Boehner in the summer of 2011: meeting the Simpson-Bowles target of $4 trillion in deficit reductions over ten years, with a ratio of $2.50 in spending cuts for every $1 in new revenue as well as “working to reduce the costs of our health care programs.” Since the election, Boehner and Senate Republicans have indicated they would support an agreement that reduces deficits by cutting Medicare and Social Security in exchange for tax reform that lowers rates but raises more revenue through closing loopholes. ...
The grand bargain being discussed in Washington reflects an elite consensus far removed from what voters want. Americans want action on jobs, and most support the president’s call to raise taxes on the rich. Overwhelmingly, they want basic family security programs protected. Any deal that cuts Medicare and Social Security, slows growth and increases unemployment will look a lot more like a grand betrayal than a grand bargain. And virtually the entire organized base of the Democratic Party, from unions to civil rights and women’s groups, is mobilizing in opposition.