ESPN politics

Found this gem inside an article on ESPN, though it was interesting and relevant to our class

There Is No Medicare Trust Fund! As election season reaches its peak, so does nonsense on both sides. Mitt Romney says he wants to lower tax rates while eliminating deductions, which is the same as saying "I will cut your taxes and raise your taxes." Barack Obama says he wants to control federal spending while vowing the January 2013 spending cuts "will not happen," which is the same as saying, "I will reduce spending and increase spending." Romney's "plan" to "create 12 million jobs" contains zero specifics, just assumes that the president can say, "I direct the nation to create 12 million jobs." Obama's "plan" to contain federal spending is light on specifics, too.

What's really driving your columnist crazy about this election is the rhetoric on Medicare. Romney and sidekick Paul Ryan say they want to cut federal spending but also want to increase Medicare spending by the strangely precise $716 billion. The ObamaCare legislation assumes a future $716 billion reduction in the rate of Medicare increases -- not an outright cut, just a slower rate of increase -- but contains no specifics on how the savings will be realized. ObamaCare has virtues, yet is all but certain to cause federal health care subsidies to rise -- see this analysis and see Table 2 of this Congressional Budget Office paper, which projects that the first decade of ObamaCare will add $1.2 trillion to the national debt. And Romney wants to add $716 billion more. But he also wants to cut spending!

Supposedly part of the $716 billion savings will be realized from lower Medicare physician fees. Late in the Clinton administration, Congress enacted a rule that mandated mildly lower Medicare physician fees. Every year since, Congress has voted out a "temporary" waiver of the rule. The last waiver was signed in February, adding $18 billion to federal health care costs.

Obama's projected $716 billion in future Medicare savings are supposed to stem from unspecified development of unspecified new programs to reduce hospital and doctor expenses. This CBO study shows there were 34 federal initiatives in the past two decades to cut hospital Medicare costs, and none did so; most resulted in higher costs.

Passing a rule and then waiving application is classic politics, allowing members of Congress to come down firmly on both sides. When speaking to young audiences, members can say, "I voted to reduce Medicare spending." When speaking to older audiences, members can say, "I voted to block that awful Medicare fee cut." If for 12 straight years, Washington has refused to enforce an $18 billion Medicare cut, how can anyone believe a far larger reduction will be enforced?

The icing on the cake is that both parties talk about a "Medicare trust fund" as if Medicare taxes were being invested, the way commercial insurance premiums are. A Romney campaign ad targeted to senior citizens declared that ObamaCare is raiding "the money you paid for your guaranteed health care." But Medicare is not guaranteed -- the Supreme Court has said Congress can change the program at any time -- while seniors never prepaid their Medicare. Current workers fund current retirees.

That's not what senior citizens want to believe, so both parties pander to the illusion that Medicare is a right and that taxes go into an investment fund that belongs to senior citizens. Romney's ad pandered to that belief, and here is liberal Democrat Chris Van Hollen pandering to it. Medicare solvency projections are based not on money in a bank account but on forecasts of how long Medicare tax revenues will exceed care outlays. There is no trust fund!