April 10, 2010

Fantasies: AP’s Crutsinger Promotes Many in Item About Delay of Social Security/Medicare Report

US-Social-Security-Admin-SealThe establishment press has for decades and almost without exception insisted that FDR’s sacrosanct legacy of Social Security can go on and on with only minor tweaks, and that if trouble looms, it’s way out there in 2040 or so when the “Trust Fund” is depleted. The problem is that during that time the federal government has raided the annual surpluses generated by “Trust Fund” which now consists almost entirely of IOUs from the rest of the government. Meanwhile, annual surpluses, where tax collections exceed benefits paid and which were well over $100 billion just a couple of years ago, have vanished, and aren’t coming back to any significant degree.

Another mythology is under development: That the just-passed ObamaCare legislation has “saved” Medicare. The Social Security/Medicare Trustees report is being delayed until June 30 to incorporate the effects of the recently passed ObamaCare on the health of Medicare. It will supposedly tell us that the life of the Medicare “Trust Fund” has been magically extended by about a decade. (Raise your hand if you think the Trustees are under immense political pressure to issue a favorable verdict regardless of the facts.)

In his Tuesday coverage of a government official’s leak to the Associated Press about the report’s delay in advance of the official administration announcement, the AP’s Martin Crutsinger spun these and other fairy tales in his stout defense for the fiscally destructive programs. But in doing so, he perhaps inadvertently revealed that Congress and the administration had no idea of the true future impact of ObamaCare.

Here are key paragraphs from Crutsinger’s report (footnotes are mine, and are explained later):

AP Source: Report on Social Security delayed

The Obama administration is delaying release of the annual report on the financial health of Social Security and Medicare so that the new report can reflect the impact of the recently passed health care overhaul.

An administration official told The Associated Press that this year’s trustees report will be delayed until June 30, three months later than it usually comes out.

… In January, Richard Foster, the chief actuary for Medicare, estimated that the Senate bill which passed on Christmas eve would extend the life of the Medicare hospital trust fund by 10 years. The legislation that finally passed Congress was the Senate bill but with revisions approved to win House support.

… The new health care law seeks to guarantee health insurance coverage for nearly all Americans while cracking down on insurance industry abuses. (1) It also promises to reduce federal deficits by an estimated $143 billion over a decade. (2)

… Last year’s report of the trustees for Social Security and Medicare, the government’s two biggest benefit programs, said that the Social Security trust fund would be depleted by 2041 and the Medicare trust fund would be depleted by 2019. (3)

The trustees warned that the financial pressures would begin much sooner when the programs begin paying out more in benefits each year than they collect in taxes. Officials with the Congressional Budget Office say that Social Security will start paying more in benefits than it collects in payroll taxes this year for the first time since the 1980s.

Supporters of the new health care overhaul believe it will have a favorable impact on both Medicare and Social Security, extending the life of both trust funds. (4)

The benefits would occur in large part through lowering health costs by expanding the pool of people buying insurance coverage. (5)

Comments:

(1) — One of the supposed “insurance industry abuses” is denial of medical claims. The trouble is that the health care provider with the highest percentage of claims denied is …. Medicare. What reason is there to expect that ObamaCare will be any different?

(2) — The deficit reduction claims, treated as “certified” by a compliant establishment media, assume no “doc fix.” The CBO’s blog post about its deficit-reduction conclusions says: “the sustainable growth rate mechanism governing Medicare’s payments to physicians has frequently been modified to avoid reductions in those payments, and legislation to do so again is currently under consideration by the Congress.” Here’s a plain-language numerical translation obtained from the Pacific Institute by Jeffrey H. Anderson in an Investors Business Daily op-ed piece:

Unless ObamaCare cuts doctors’ pay under Medicare by 21%, and never raises it back up, it will increase deficit spending by $58 billion from 2010 to 2019 — and by over $100 billion from 2015 to 2019 alone.

(3) — As noted, Social Security’s “Trust Fund” consists almost entirely of government “bonds,” i.e., IOUs from the rest of the government. The rest of the government is running annual trillion-dollar deficits on its own, and its ability to pay when those bonds are being redeemed — something that is just beginning to occur — is suspect.

(4) — Supporters “believe” the reports will show favorable impacts? These people just enacted a de facto a slow-motion government takeover of one-seventh of the economy, yet they don’t know, and apparently have no idea? The truth is, they don’t care. As John Dingell said, it’s all about how to “control the people.”

Even if ObamaCare were to have a favorable impact on Medicare (doubtful, as shown in item (2)), why Social Security might be better off is a bit of a mystery. Then again, maybe the curve that is being bent downward is the decades-long increase in life expectancy. This would be accomplished by incorporating criteria for who does and doesn’t deserve medical treatment developed by “Zeke the Bleak” Emanuel.

(5) — ObamaCare will supposedly repeal the law of supply and demand. Too bad that law originates in human nature and how the world really works, and not in Congress, where the mistaken belief is apparently that increased demand reduces prices. The number of covered patients seeking care will increase by at least 10% (far more if illegal immigrants are allowed in). Even if the supply of medical providers stays the same — a dubious proposition — either prices will go up, or rationing will occur.

That’s a lot of fantasy to put into one AP report. Expect much more in future weeks and months.

Cross-posted at NewsBusters.org on April 11.

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6 Comments

  1. One person’s fantasy is another person’s nightmare. In the run up to ObamaCare the number of people needing health insurance but couldn’t get it was just a fraction of the myths (47 million) propagandized by the MSM for the Democrats. The real issue has always been 13 million illegal aliens not paying their medical bills thus handing us the bills via higher medical charges and insurance rates. The whole point of ObamaCare is to legally make us pay for illegal aliens, the rest of the citizenry be damned. Like all liberal boondoggles, the desire for new gullible dependent voters has consequences. How could it not end any other way when you flood the country with poor people who obviously have greater unmet medical needs than the citizens of a wealthier country?????

    We, the People of the United States of America did not agree to these people coming here, and these liberals have the audacity to demand we pay for their false charity. Even if this were not a recession, the illegals must leave, every last one of them. We have a collective sovereign right to decide IF and WHOM we want to join us and that agreement must be of the majority who are expected to pay for it. This is taxation without representation. What good are Representatives IF they refuse to discuss the issue and do as they please????

    Comment by dscott — April 10, 2010 @ 2:36 pm

  2. Off-Topic: Newsbusters went down right when I really needed it to check on something. I keep hearing about a lefty claim going around that Fox News “lied” in some regard about Obamas ‘treaty’ with Russia. I wanted to look in on it, but can’t so can Tom or anyone else find out for me if there is some validity to it? (Probably not, but I do like to know about these things.) I’ve found nothing about it in the blogs I go to, and I’ll be darned before I go to some liberal blog to find out more.

    On topic: It’s amazing the logical leaps and mental gymnastics some people are going to to defend the idea that the government covering millions of people and to paying everyone’s medical costs is somehow a deficient reducer.

    Comment by zf — April 10, 2010 @ 3:24 pm

  3. #2, I found a Jon Stewart riff about it:

    http://www.thedailyshow.com/watch/thu-april-8-2010/the-big-bang-treaty

    Entertaining, not convincing.

    The acid test is in the ability to verify, which sadly no one is addressing.

    Comment by TBlumer — April 11, 2010 @ 9:30 am

  4. So, wait, this whole thing originated from a Jon Stewart riff? I thought it came from someone with some substance. Sorry to waste you and everyones time, Tom.

    Comment by zf — April 11, 2010 @ 10:57 am

  5. #4, not absolutely sure of that, but Stewart is what I found. No apologies necessary. Unfortunately, Stewart is a major news source for many young and uninformed folks.

    I suppose you might find something at Media Matters too, not that it would increase the credibility.

    The problem with juxtaposing Reagan with Obama is that he has promised to stop doing so many other things relevant to our defense that even a half-decent agreement with the Soviets that even slightly weakens our strategic advantage in nukes can have serious overall implications — which of course no one is covering either.

    Comment by TBlumer — April 11, 2010 @ 5:43 pm

  6. If they think they can compare Reagan and Obama, they are crazy. The differences in what Reagan did with Russia and what Obama did with the new treaty does are vast. For starters, Reagan negotiated from a position of strength instead of weakness, Gorbachev (while not the saint libs have tried to paint him as) was nowhere near as bellicose and strident as Putin is, and Reagan made sure the Soviets knew that any non-compliance would be met with strong action. Plus, Russia was on the downswing back then and today it is gathering strength. Not to mention the fact Reagan made sure our missile defenses kept up, while Obama has backed away from them. Weakening our defense AND our offense is truly insane. Oh, and Obama abandoned our ally Poland in the process to boot.

    And lets not forget, unlike yesteryear, today Russia is far from the only serious nuclear threat. There is Iran, North Korea and who knows how many rogue terrorists. The world is very different today than the 80′s.

    I could go on and on and on…

    Comment by zf — April 12, 2010 @ 10:49 am

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