Democrats Use Medicare as a Piggy Bank
Speaker Nancy Pelosi’s admission that the Biden administration may use drug-pricing legislation to help fund a $3 trillion infrastructure and welfare program may at first glance make little sense: What does one have to do with the other? But Democrats view Medicare less as a solemn commitment to seniors than as a slush fund for new programs.
In 2019 the House passed a bill that would require the federal government to “negotiate” down drug prices. The negotiation mechanism—government demanding lower prices, backed by the threat of taxes that could drive drug companies out of business—would decrease research-and-development spending and result in fewer innovations like the Covid-19 vaccines. Democrats, who may now try to pass the bill in the Senate, would ignore its problems because of the money it can save for use elsewhere.
In 2019 the Congressional Budget Office found that the House drug-pricing bill would reduce Medicare spending by $485.4 billion over a decade. Those savings would fund some of the Democrats’ green infrastructure agenda, extensions of the welfare programs created temporarily in the $1.9 trillion “Covid relief” measure, and much else.
In using Medicare as a piggy bank, the Biden administration would follow in the footsteps of its Democratic predecessor. ObamaCare used $716 billion in Medicare savings to fund its new entitlements. In a fiscal sleight-of-hand, government accounting standards allowed Democrats to count that $716 billion as both paying for ObamaCare and extending Medicare’s solvency—an illogical scenario. This trick allowed both parties to ignore Medicare’s unsustainable financing for years. Thus the Medicare Part A trust fund, projected before ObamaCare to become insolvent by 2017, lumbers on, largely unreformed.
The left wing of the Democratic Party would go even further, dispensing with the notion that seniors’ health coverage deserves pride of place by abolishing the current Medicare program outright. The single-payer legislation introduced by Vermont Sen. Bernie Sanders and Washington Rep. Pramila Jayapal would also liquidate the Medicare trust funds, making the bills not Medicare for All but Medicare for None. Liquidating funds reserved for poor seniors to finance coverage for often-affluent youngsters sounds like a political attack Democrats would hurl at Republicans. But the progressives’ single-payer system would do just that.
While he ran against single-payer health care in his party’s primary, President Biden has shown about as much interest in protecting Medicare as his Democratic colleagues: not much. His campaign proposed no reforms to ensure Medicare’s long-term solvency, and in 2017 and 2018 he and his wife, Jill, avoided nearly $400,000 in Medicare taxes themselves. Embracing the current proposals to raid Medicare again to expand the welfare state will make the program’s problems worse.
“Don’t tell me what you value,” Mr. Biden says regularly in his speeches. “Show me your budget and I will tell you what you value.” That’s what’s called revealed preferences. From Mr. Biden on to the left, Democrats’ actions reveal that they value Medicare less for what it means to seniors and more as a means to expand government.
This post was originally published at The Wall Street Journal.