Thursday, September 30, 2021

Socialist Left Upset Moderate Democrats Won’t Let Them Raid Medicare

Among the many, many policy feuds currently engulfing Democrats in Congress as they try to ram through a $3.5 trillion spending blowout, one holds particular irony. The progressive left—which has nailed its mast to the principle of “Medicare for All”—appears outraged that “moderate” Democrats object to raiding Medicare.

These “moderate” Democrats object to drug pricing “negotiation”—in truth a mechanism to impose government-dictated price controls—because they believe, rightly, that those price controls will reduce innovation. But the left, not to mention Democratic leaders in the House, want to ride roughshod over those objections because they need to raid Medicare to pay for the rest of their spending spree.

Game of Chicken

A recent article explained why House Speaker Nancy Pelosi (D-CA) and other Democratic leaders want to “jam” the holdouts on the drug pricing strategy:

Democrats are counting on the drug policy proposal, which could generate budgetary savings of as much as $700 billion over a decade, to help pay for their other health policy priorities, including proposals to expand [Obamacare], Medicaid, and Medicare benefits….

While Nancy Pelosi warned Members…that the overall size of the bill may have to shrink…[Democratic leaders] are still counting on the drug policy to raise the money necessary to pay for other top priorities like covering dental, vision, and hearing benefits for seniors, expanding Medicaid for low-income people in red states, and making Obamacare subsidies permanent.

Of the three priorities listed in the last sentence above, only the dental, vision, and hearing benefits for seniors would keep Medicare money within the Medicare program. Ironically enough, the House’s draft reconciliation language wouldn’t fully implement the dental expansion until 2032, by which point many of today’s Medicare beneficiaries would have been long since deceased.

That long delay means that most of the $700 billion in supposed drug pricing savings would get directed towards the Medicaid expansion to the able-bodied and increasing subsidies to insurance companies. Or, to put it more bluntly, Democrats are raiding Medicare to pay for Obamacare—just as they did a dozen years ago.

Slush Fund for Big Government Programs

We’ve seen this movie before. For all their talk about supposedly protecting seniors and Medicare, the progressive left in particular views the program as a slush fund they can raid to pay for their big government scheme du jour. Here are several ways we’ve seen exactly that since Obamacare was enacted.

  • Over its first ten years, Obamacare raided Medicare to the tune of at least $716 billion—not to improve Medicare’s solvency in any meaningful way, but instead to fund new entitlements for the young and able-bodied.
  • Democratic lawmakers are currently fighting not over whether to raid Medicare, but instead how much to raid it—that is, how much of the drug pricing savings, the vast majority of which come from Medicare, should get redirected to programs like Obamacare coverage.
  • The single-payer proposal endorsed by more than half of House Democrats, and originally proposed by Sen. Bernie Sanders, I-Vermont, would actually abolish the current Medicare program, and liquidate the current Medicare trust funds. This move would effectively take money dedicated towards seniors, many of them poor, and siphon it away to help fund socialized medicine for all Americans—including young billionaires like Mark Zuckerberg. It also makes the proposal not “Medicare for All” but “Medicare for None.”

If those examples don’t provide enough proof, recall too that President Biden and his wife Jill over the past four years have used a questionable tax loophole to avoid paying nearly $517,000 in Medicare and Obamacare taxes. To illustrate the point visually, the Bidens thought renting this mansion more important than helping fund Medicare benefits for seniors.

As it is, the House’s prescription drug “negotiation” bill contains procedural flaws that should result in major changes—and lower budgetary savings. As I outlined earlier this summer, the 95 percent tax against drug companies that do not “negotiate” is so onerous that it likely does not comply with the procedural guardrails of budget reconciliation in the Senate.

Changing this structural flaw to bring the program into compliance could reduce the savings substantially from current levels, meaning Democrats may have to lower the scope of their health-care ambitions regardless. But even if the current House proposals have little chance of getting enacted into law, they demonstrate how little Democrats think of the Medicare program.

In that sense, these revealed preferences should echo in seniors’ minds as they head to the polls next November.

This post was originally published at The Federalist.