According to a document produced by Democrats serving on the congressional deficit-reduction supercommittee, the Democrats are proposing to cut $350 billion from Medicare as part of a $2.3 trillion “grand bargain” to reduce the deficit. It’s time for the people to say “no” to this deal. So we’re asking people who haven’t done so to sign this petition today that says to Senate Majority Leader Harry Reid and House Democratic Leader Nancy Pelosi to reject a “devil’s bargain” that cuts retirement benefits.
This proposal by the Democrats, offered Wednesday, proposes unspecified “reforms” that would reduce physician payments by $250 billion and benefits by $100 billion over 10 years. The proposal also offers to cut Medicaid spending by $50 billion.
There are certainly lots of things we should do to reduce the burden of health care costs on taxpayers, but this proposal from the Democrats essentially apes the despicable posturing from the Republicans, which blames the health care needs of seniors and the poor for the federal deficit, and not the catastrophically flawed economic policies conservatives have pushed for decades and the unconscionable behavior of the financial sector.
In other words, we’re in this mess because of Wall Street, not because seniors need to go to the doctor.
We need to encourage Reid and Pelosi to reject this bargain, in the same manner that tea-party zealots pressured House Speaker John Boehner to stiff-arm President Obama months ago when it appeared that the two would agree to a middle-of-the-road budget deal that would include tax increases.
The direction in which the Democrats appear to be heading would be a policy and a political disaster.
The policy disaster is that there is very little in this proposal—and thus even less if it manages to be further compromised to win Republican support—that allows the federal government to do what it should do to create jobs and grow the economy, which is ultimately the key to reducing the federal deficit. Instead, it offers $1 trillion in cuts that include $200 billion in non-defense discretionary spending. The discretionary category includes spending on education, some health services, environmental protection, housing and community development, aid to state and local first responders and more.
These cuts would be matched by $200 billion in defense spending cuts, but, notwithstanding the whining of Defense Secretary Leon Panetta and the Joint Chiefs of Staff, the United States could cut its defense spending alone by as much as $1 trillion over 10 years and still have by far the world’s most powerful armed forces, as a panel commissioned by Rep. Barney Frank, D-Mass., concluded earlier this year.
Seeking $1 trillion in revenues is a good start, and pursuing tax reforms that require people who do well in this economy to pay their fair share in taxes is the right thing to do. But nothing in this proposal directly asks Wall Street to help pay for the damage they did to the economy and the resulting explosion of the deficit. A financial transaction tax that would be barely noticed by average investors—it would fall heaviest on high-velocity traders and might curb their stock-flipping, which would actually be a good thing—would raise $350 billion over nine years. That money could be put directly to use in rejuvenating the Main Street economy, keeping state and local teachers and first responders in their jobs; putting idle construction workers on the job rebuilding roads, bridges and transitways; putting young people to work on energy conservation projects.
The political disaster is this: If this proposal goes any further, Democrats would lose their reputation as defenders of Social Security and Medicare. The American Majority could hardly be more clear on this: They don’t want the budget balanced on the already fragile backs of the elderly and the working poor.
We’ve been arguing that it would be better for the supercommittee to fail than for it to lock the nation into a bargain that would keep the economy stagnated. The deal we need is a plan that puts people back to work immediately on such priorities as upgrading our infrastructure, stanches the bleeding of state and local public service jobs, continues our moral obligations to provide for the health and economic security of our seniors, and asks those who are doing well to pay their fair share—and specifically asks Wall Street to help pay for repairing the economic damage.
Fighting for and winning that deal would go a long way toward translating the emotions of the Occupy movement into change worth believing in. Sign the petition.