Medicare vs. Medicaid

By Dick Morris on March 12, 2013

Only a small suffix separates the two major health care programs run by the federal and state governments, but their relative political, budgetary, and equity considerations are miles apart. When Obama lumps “entitlements” together, he inevitably means Medicare and Social Security. But the entitlements that need reining in are neither of these; they are Medicaid, food stamps, disability, subsidized housing, and welfare.

Republicans, from Congressman Paul Ryan on down, must take aim at the means tested entitlements and leave the Democrats to propose cuts in Social Security or Medicare.

Last year, Medicaid costs rose by 12.3%. Spending on food stamps has risen 135% over the past four years. Disability rolls are up by 50% since 2003. These are the programs that must be reined in. By contrast, the growth in Medicare and Social Security has been less than 10%.

The Republican Party has got to focus the debate over entitlement reform on Medicaid and other means tested entitlements. The Ryan Plan to block grant these programs to the states and to let them run them makes a great deal of sense and must be the prime Republican response to the need for entitlement reforms.

If the Republican Party becomes identified in the popular mind with cuts in Medicare or Social Security, it will not win another national election for a long, long time.

The likes of Paul Ryan will complain that we cannot balance the budget without cutting these two sacred cows. But the fact is: Who needs to get the deficit to zero? What difference would that make? True, we cannot run deficits in the trillion dollar range as we are now. But if we bring the deficit under control — to one or two percent of GDP ($100-$300 billion in current dollars) — we will have reversed the upward spiral in national debt as percentage of the economy and saved our nation from bankruptcy.

In coping with the deficit, perfection is the enemy of gradual improvement. If the Republican Party lets itself be dashed against the rocks by advocating cuts in Medicare and Social Security, it will lack the political clout for any deficit reduction or cuts in federal spending at all.

We must temper fiscal responsibility with political realism. Medicare and Social Security are the third rails of our politics and Republican must stay far, far away. It does no good to argue that a voucher system can work better for Medicare (renamed a “premium support program”). Voters and the elderly won’t believe it.

It does no good to say that those now over 55 — or 56 — won’t be impacted. Those over that age won’t believe it and those under it will look at the difficulty of amassing savings in a zero interest environment and will react harshly to any limitations in Social Security or Medicare. When the economy was doing well, they would look on the future with confidence and feel that they would amass savings which would make both programs optional. No more.

The Tea Party movement must not pressure Republicans into committing suicide. We don’t need to get to zero at the expense of cutting Medicare or Social Security. Close is good enough.

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