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The New York Times “Safety Net” Package Gets It Half Right

Posted: Feb 15, 2012

The New York Times front-page article Sunday showing how extensively Americans—including Tea Party supporters—rely on government programs successfully shatters some myths about who accesses the safety net. But despite its fine on-the-ground reporting, the article’s poor framing on policy solutions seems to perpetuate other myths about Medicare and Social Security.

First, the good news: In “Even Critics of Safety Net Depend on It Increasingly,” Binyamin Appelbaum and Robert Gebeloff examine recessionary life in Chisago County, Minnesota, northeast of the Twin Cities and somewhat farther north of Anoka, the real Lake Woebegone where Garrison Keillor grew up.

In 2010 voters there tossed out Democratic stalwart James L. Oberstar, who served in the House of Representatives for 36 years. They replaced him with Tea Party Republican Chip Cravaack—after Oberstar refused to meet with Cravaack and others to discuss the then-pending health care reform legislation. Last week, Rick Santorum, who won the Minnesota GOP caucus, took 57 percent of the Republican vote in Chisago County with his warnings against “the narcotic of government dependency.”

Recession Hit Middle Class Hard

The Times reporters show that although Chisago County has little outright poverty (under the outdated Federal Poverty Line), middle-class residents there have increasingly relied on government programs to get by. That reflects the national picture, they report: “The government now provides almost $1 in benefits for every $4 in other income.”

Yet while the Times article provides striking human context for understanding the deeply troubling effects of the economic crisis, it stumbles in its discussion of Medicare and, to a lesser extent, Social Security.

The Times survey revealed that, despite projections showing Medicare is the “fastest-growing benefit program,” only 22 percent of those polled think that’s true. Meanwhile, 27 percent believed -- incorrectly -- that “programs for the poor” (including Medicaid) is the fastest-growing area of government spending.

Appelbaum and Gebeloff quote a Congressional Budget Office (CBO) projection that government spending on medical benefits, even taking into account the cost-containment measures in the 2010 health care law, will rise 60 percent over the next decade.

But instead of noting the shortcomings of the health reform law, the reporters cite an Urban Institute analysis indicating that “Medicare’s situation is even more dire because a worker earning average wages still contributes only $1 in Medicare taxes for every $3 in benefits likely to be received in retirement. A woman who was 45 in 2010, earning $43,500 a year, will pay taxes that will reach a value of $87,000 by the time she retires . . . . But on average, the government will then spend $275,000 on her medical care.”

Then Appelbaum and Gebeloff include this telltale line: “Medicare is often described as an insurance program, but its premiums are not nearly high enough. In simple terms, Americans are getting more than they pay for.”

In fact, it is the rampant, overall health care inflation in the United States that has ballooned the cost of care beyond the ability of many Americans to afford treatment for illness, especially when it tends to come in old age. And, actually, inflation in Medicare spending is below that of private health insurance. Gentlemen, Medicare is a social insurance program, a matter of shared risk and health security for the nation--not a Christmas Club savings plan.

A Missed Opportunity

The Times article represents an important missed opportunity. By focusing its policy analysis almost entirely on Medicare, the article lost sight of larger national priorities for spending.

After all, Americans shouldn’t have to worry about untreated sickness and premature death for lack of help under the illusion that the United States can’t afford to aid people in their hour of need: Not when Wall Street sank the economy with a $7 trillion loss in American housing, not when the basic U.S. military budget will rise to $525 billion next year, recently expressed by the administration as a cut—but only in future projected growth. That’s the basic military budget – not counting war spending – more than the next five nations combined in military spending.

The reporters failed to follow their analysis through to the most important fact underlying the issue of growing (and wasteful and ineffective) government spending on Medicare: Nowhere did they query Americans on what they understand about why the United States spends twice as much on health care than any other advanced economy and with worse health and lower longevity than those other nations.
The U.S. now ranks 37th in the World Health Organization’s ranking of nation’s according to their health outcomes.

The Times reporters and pollsters gauged how willing people are either to cut Medicare or raise taxes to support it; their entire focus was within the federal budget. Yet cutting Medicare will merely slow inflation in U.S. health expenditures somewhat, unless the country begins to vigorously follow the example of the rest of the world and control costs.

Economist Dean Baker of the Center for Economic and Policy Research blogged about the Times article, noting, “If U.S. health care costs were in line with costs in other countries, then the country would be looking at long-term surpluses, not deficits.” Baker also notes that the Times reporters missed CBO calculations showing that if it weren’t for the recession, the U.S. would be facing “very small deficits” overall.

False Choices

That Medicare spending will rise--and rise again--despite the health care reform is not a sign that America can only afford so much care. It is a sign that any tradeoff between costs and care is a false choice.

Without fundamental changes, cuts to Medicare will not stop its costs from eventually rising beyond reason. And it won’t cease harming individuals and families deterred by costs from seeking needed care—at least until illness becomes acute and more expensive for everyone. This, simply and flatly, is the principal issue relating to why health care is draining away our nation’s strength, not the cost-benefit analysis of one or two federal programs.

In the end, the Times article merely reflects the federal-budget obsession of political leaders on both sides of the aisle.

On Monday, for instance, President Obama proposed a budget that, while purporting to offer a balance of cuts and taxes, will leave millions of Americans straining even more. The White House budget would not only reduce funding for the Centers for Disease Control and Prevention and eliminate $4 billion over the next decade from prevention programs under the Affordable Care Act; it would shift more Medicare costs to seniors through higher premiums and co-payments.

The president is recommending cuts in the federal share of Medicare spending in the guise of more “means testing,” charging more for seniors considered rich enough to pay more.

“The truth is,” said Max Richtman, president and CEO of the National Committee to Preserve Social Security and Medicare, “the middle-class will take this hit too. Medicare has already been means tested since 2007 and the number of beneficiaries subject to higher premiums is already increasing.”

Back in Chisago County these and other false economies—penny wise and billions foolish—will continue to devalue Garrison Keillor’s proud Minnesota. All women won’t be as strong; the men less good looking than haggard; and the children, not nearly above average.

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