Biden vows to save Social Security and Medicare in face of shortfalls

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Angry Bear
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Dale Coberly; USA Today Report of Biden Speech not as bad as it might have been. It still amounts to a lie by Misdirection. On September 27, USA TODAY published an article which AB suggested I review.

“Biden vows to save Social Security and Medicare in face of shortfalls, but offers few details,” Maureen Groppe, USA Today

It has been said that looking at the face of the devil is one of the chief torments of hell. That is the way I feel when I look at the so many lying and ignorant articles about Social Security.

This is going to be my belated review of the USA TODAY article, much shortened for your reading pleasure and my sanity.  Easiest for me to use quotes from USA followed by my ( coberly ) comments.

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USA TODAY: “Biden vows to save Social Security and Medicare in face of shortfalls, but offers few details.”

President Joe Biden on Tuesday put the spotlight on Medicare and Social Security, hot button issues that could pack a political punch six weeks before the midterm elections.

His remarks at the White House were delivered days after the popular programs got little attention in House Republicans’ rollout of the agenda they promise to pursue if voters give them control in November.

Both Medicare and Social Security face long-run financing problems.

Coberly:  Note how quickly the article changes from “Biden’s speech” to “Social Security long run financing problems.” USA is just using the Biden speech as an excuse to publish the old lies (by misdirection) about Social Security

USA: Democrats’ proposed solutions have generally focused on increasing taxes on higher income earners while also promising to expand benefits.

Republicans accuse Democrats of further straining Medicare through recent efforts to lower prescription drug costs. Many Republicans have backed raising the eligibility age for Medicare and the retirement age for Social Security as part of a plan to keep the programs solvent without hiking taxes.

Coberly: “Democrats … increase taxes … Republicans keep program solvent without hiking taxes” [note I will put paraphrases in quotes.  the reader is expected to be smart enough to tell the difference between a direct quote and a paraphrase]. So, we have established that Dems want to tax and spend while Republicans what to save and strengthen.  But I am at a loss to understand how lowering prescription drug prices strains Medicare.

USA:  Because the government is paying out more in monthly Social Security benefits than it’s collecting in taxes, it’s projected to run out of reserves to fully fund benefits in 2035. At that point, it would have enough money to cover 80% of benefits. The Medicare trust fund, which covers inpatient hospital services, will only be able to pay 90% of scheduled benefits after 2028. 

Coberly: “run out of reserves …” but no discussion of what that means.  the reserves are not particularly important.  SS is paid for by employee contributions (aka payroll tax).  The “reserves” are just a prudent reserve to smooth out variations in payroll tax collections vs expenses (benefits paid out).  The Reserve has been significantly increased in recent years to ensure the baby boom generation pays its fair share, which would normally happen automatically under the pay as you go financing structure of Social Security. But, it would impose an unfair burden on “the young” because of the much larger size of the boomer generation.  That reserve is now being drawn down as it was intended to be while paying for the boomers (paying them back).

Meanwhile, the increasing life expectancy will mean the payroll tax needs to be increased slightly … more years in retirement takes more money. You would need to save more in any case, with or without Social Security.  Or work longer, which might not be as much fun as you think: living longer does not mean keeping your strength, abilities, health, or that you won’t want to retire to enjoy your longer life after working 40 or more years … and paying for that retirement yourself.

As for paying “only 90%”… gee, does that mean reducing costs 10% would keep Medicare solvent?

USA: Biden accused Republicans of wanting to cut the programs without detailing his own past promise to fix the funding shortfalls. Instead, he focused on recent steps to reduce prescription drug costs for Medicare patients.

Coberly: apparently not, according to USA reducing costs will not help fix funding shortfalls.      

USA: The “Commitment to America” House Republicans announced last week promises to “save and strengthen Social Security and Medicare” without specifying how.

Coberly: yep, save and strengthen, but not how. but hold on

USA: Democrats immediately pointed to a budget plan proposed by House conservatives earlier this year. The plan rejects as “fundamentally immoral” raising payroll taxes to cover Social Security’s shortfall. Instead, conservatives propose slowly increasing the eligibility age to reflect that life expectancy has increased since the program began. Benefits would also go up for lower-income workers and down for higher earners.

Coberly: immoral to raise the payroll “tax” [it’s not a tax. it’s “mandatory savings”, you get your money back with interest. it’s so the rest of us won’t have to pay welfare when you get old without having saved enough to retire.] but it’s not immoral to raise the retirement age so old ladies whose knees are giving out, or old cubicle workers whose minds are giving out, can’t retire even if they have paid for it themselves … because the rich are going to be living longer.

USA: For Medicare, the eligibility age would rise, and the program would be turned into income-based subsidies for specific health plans.

Coberly:  yep, raise the eligibility age.  I suppose that’s so the elderly poor won’t be able to get the medical care they need to live longer.  As for “subsidies for specific health plans,” that means government handing out more for Medicare Advantage while people are denied benefits.

USA: Democrats have also attacked a proposal by Florida Sen. Rick Scott, the head of the campaign arm of Senate Republicans. The proposal requires all federal legislation be renewed every five years. Democrats accuse Republicans of wanting to “sunset” Social Security and Medicare. Scott has said he wants to “fix and “preserve” those programs, without providing details. 

Coberly: yep “fix and preserve” by sunsetting the programs. that’ll fix ‘em.

USA: A bill sponsored by nearly all House Democrats would increase Social Security benefits in various ways and apply the payroll tax for the first time on wages above $400,000. But most of the new benefits would be temporary, and the increased taxes would buy only about four extra years of solvency for the trust fund, according to the Center on Budget and Policy Priorities, a liberal think tank in Washington, D.C.

Coberly: this is the “but wait for it” I mentioned: The Dems have their own plan to fix and preserve Social Security by destroying the key feature that has made it work for 85 years:  it is not welfare.  The rich do not pay for it … beyond what it is worth to them as insurance in case they suddenly stop being rich.

USA: On Medicare, an effort by Senate Democrats this summer to boost taxes on some high earners to shore up that program was not successful.

Coberly: And this is what will happen to the Democrat’s plan to raise taxes on the rich to pay for Social Security, unless the rich remember that turning SS into welfare was always their best bet to destroy it. They know how to destroy welfare.

USA: Biden did sign into law the Inflation Reduction Act, which included several provisions aimed at reducing prescription drug costs for Medicare patients. It requires the government to negotiate prices for some top-selling drugs and requires drug makers to pay rebates if their prices rise faster than inflation. It also limits out-of-pocket drug spending costs for Medicare patients to $2,000 a year.

“I can go to bed at night knowing that my out-of-pocket costs for all that I have is going to be affordable and predictable,” Bob Parant, a Medicare beneficiary from New York who is dependent on insulin, said when he introduced Biden at Tuesday’s event.

Coberly: This is what USA means when they say Biden has “no plan…”

USA: How Republicans have pushed back. Republicans have charged that Democrats’ efforts to control prescription drug prices – what they call “Democrats’ drug takeover scheme” – will reduce pharmaceutical companies’ spending on research and development, resulting in fewer new drugs.

Texas Rep. Kevin Brady, the top Republican on the House Ways and Means Committee, has said repealing the provisions is likely a top priority for Republicans if voters hand them control in the November elections, Axios has reported.

Coberly: This is what Republican always say: any government program always reduces big companies’ ability to innovate and reduce costs.  And we have seen how that always works out.

USA: Republicans have also attacked Democrats for not using the nearly $300 billion the government is projected to save by negotiating drug prices to shore up Medicare’s finances.

Coberly: Maybe because saving $300 billion in costs is how they are shoring up Medicare’s finances?

USA: What they are saying,