GOP retreats on Ryan’s budget. Boy blunder, or kid thrown under the bus.

UYGUR: The Republicans are retreating and attacking at the same time today. The attacks we‘re used to. The retreat, we‘re not. So what is that about?

Well, it‘s about that Medicare plan. Man, they are running for the hills.

They are so far up that hill, they are out of breath. They‘re like, Jesus, Lord, mercy (INAUDIBLE).

Democrats got them on the run on this one. “The Hill” reports that Senate Republicans are dropping Ryan‘s Medicare voucher plan entirely. It‘s not included in their new budget unveiled today by Pennsylvania Senator Pat Toomey.

Wow. Run, run, run, run. Stay, stay, stay, stay.

They did not have that worked out for them, and they are saying, you
know what? The time to attack something new. And they‘ve always got to go on the attack, right?

So, what‘s new? Medicaid.

Toomey‘s plan follows the Ryan model of turning Medicaid into a Block Grant program. Now, you know how much that cut? The Ryan plan
cuts at least $1.3 trillion from Medicaid. And a new report out today
says that plan would add 44 million poor people to the ranks of the
uninsured.

Way to stay classy, guys. Of course, Washington will call this serious
and grown up. Yes, of course. When you attack people in lower-income brackets, that is very serious and grown up.

Going after rich people? Oh, no, no, no. We would never want to do that.

At least they learned their lesson on Medicare. Will they learn their
lesson on Medicaid? We‘ll find out.

Well, one of the guys they have to deal with is Democratic Senator from Ohio Sherrod Brown. And he‘s joining us right now.

Senator Brown, great to have you here.

SEN. SHERROD BROWN (D), OHIO: Cenk, how are you? Good to be
with you. Thanks.

UYGUR: All right.

So, first, on Medicare, is it done? Is it, as spike would say, ovah?
Ovah?

BROWN: No, I don‘t think they‘ve—I mean, you said they‘ve learned their lesson. I‘m not sure they have.

Every time they get a chance, from the invention of Medicare in the mid ‘60s, the passage where most Republican opposed it, to the first time Newt Gingrich had a Republican House and Republican Senate, they tried to privatize, fell short. The first time President Bush, there was a Republican president, two Republican houses, House and Senate, President Bush tried to privatize Social Security. Now that the Republicans at least think they are on the ascendancy in Washington, they are trying again.

They are going to keep trying because they don‘t—fundamentally, they don‘t believe in a government program like Medicare or Medicaid, for that matter, can work for the public. And they found out when they went home, and particularly the freshmen Republicans went home, and they unveiled to the sound of trumpets and ticker tape, or however they did it, this grand Medicare scheme under Paul Ryan‘s bill, they found out it wasn‘t so popular, because the voters believe in Medicare, they know it works.

They don‘t want some risky government—anti-government voucher
scheme that is basically just going to shift costs to seniors. It doesn‘t
save dollars like we‘re trying to do with Medicare as a whole to make it
more efficient. It just shifts the cost from the program, from taxpayers, on to seniors, and that just doesn‘t work for people.

UYGUR: Well, it doesn‘t, and that‘s probably why they didn‘t
include it in their new Senate proposal today. And here is a letter from 41 GOP House freshmen—and I love this.

This to President Obama, and they are complaining about “Mediscare
attacks against Republicans. We ask that you stand above partisanship, condemn the disingenuous attacks and work with this Congress.”

Look, I‘m going to be a little harsh, but it sounds like they are crying.

They‘re like, oh, no, Mr. President, please have your party stop attacking our terrible ideas.

BROWN: Yes, exactly.

UYGUR: Any chance you guys will listen?

BROWN: No. It‘s funny they do that. I mean, it‘s not funny, but it‘s
curious they do that, because a lot of them, last year, went after
Democratic House incumbents saying that Democrats were cutting
Medicare. What we were doing is taking away insurance company
subsidies that the insurance companies got when they were involved in the Medicare privatization program begun by—well, begun 10 or so
years — 10 or 11 or 12 years ago.

So the fact is, these guys, of course they are complaining about it,
because they know we are being straightforward and we are attacking
them for what they want to do to Medicare. But it‘s like when they
accuse Democrats of class warfare. They are the ones doing the class warfare, we are just pointing it out.

They‘re the ones that are trying to scare seniors and take away what
we know works, a very good Medicare program that‘s been around for
45 or 46 years now. And we are just pointing out that they are trying to undercut it and privatize it and shift cost to seniors.

We‘re going to keep pointing that out. They‘re going to keep trying it
because it‘s what they believe.

They don‘t believe in this government health program any more than they believe in the health bill we passed a year and a half ago. They don‘t like Medicare. They don‘t like to say it that way, but they really fundamentally don‘t like that program.

UYGUR: Well, there is one other issue here, of course, as we pointed
out, and that‘s Medicaid. I want to show you an NBC/”Wall Street
Journal” poll. Medicaid also polls well.

First of all, the most popular thing is raising taxes on millionaires for how to balance the budget. That‘s 81 percent saying they are in favor of that.

Don‘t cut Medicare is at 76.

But don‘t cut Medicaid is also at 67 percent. That‘s two-thirds of the country.

So will the Democrats have as much passion and fight in defending Medicaid as they did on Medicare?

BROWN: Yes. We went through that a decade and a half ago, too, in
the ‘90s, when Gingrich tried to Block Grant Medicaid. It‘s a nonstarter.

It hurts two groups of people. It hurts poor kids. They are—about
two-thirds of Medicaid beneficiaries are children. They are only
one-third of the cost, because kids don‘t get sick as much.

The other part of Medicaid is seniors, many of them in nursing homes,
low-income, moderate-income seniors who don‘t have a lot of assets.

That‘s about a third of the individuals in Medicaid but two-thirds of the
costs because they are obviously—it costs more to take care of a senior than a child.

So they are going after young—they‘re going after poor children and
low-income, moderate-income, low-asset, if you will, seniors. And that ain‘t going to work either because the public gets it.

The public is on to these guys, how they overreach. They overreached in Ohio in what they are doing in collective bargaining.

I mean, I have asked people to go on my Web site, SherrodBrown.com/Ohio, and sign up about—against what they are
trying to do when they overreached in Ohio in taking away bargaining
rights and going after women‘s rights. It‘s the same thing they are doing nationally, and it has got to stop.

UYGUR: Right.

Senator Sherrod Brown, taking the fight to them today.

BROWN: Thanks. All right.

UYGUR: I appreciate you being here.

BROWN: Good to be with you.

UYGUR: All right.

Now let‘s bring in Ezra Klein. He‘s an MSNBC contributor and a reporter for “The Washington Post.”

Ezra, let‘s concentrate on that Medicaid attack that‘s coming now—
$1.3 trillion, cutting 44 million people off of Medicaid. That is Draconian.

Are you as convinced as Senator Brown that the Democrats are going
to fight just as hard on that one, or maybe not?

EZRA KLEIN, MSNBC CONTRIBUTOR: I am convinced that many
Democrats will fight quite hard on Medicaid. Medicaid is very close to the heart of Democrats. It is a great society program. It protects truly the most vulnerable people in America.

One group that Senator Brown didn‘t bring up were disabled. The bulk
of Medicaid‘s costs come from the disabled, the people who really can‘t take care of themselves, and people who really can‘t go out and
purchase their own health care insurance. So I think, emotionally,
Democrats will be there. The problem for Medicaid is its constituents
aren‘t as powerful.

UYGUR: Exactly. That‘s exactly it.

KLEIN: More able-bodied, more able-minded seniors are stronger.

UYGUR: That‘s what I‘m worried about.

KLEIN: And so, even if Democrats are emotionally there to fight for
Medicaid, they are not going to have quite the same interest group
backup that Medicare does. And that could lead to an outcome where
they beat back most of the attacks on Medicaid, but it still does get
whacked in a way Medicare simply doesn‘t.

UYGUR: You know, I think it will, and I‘ll tell you why. And I
don‘t want to be pessimistic, and I hope they fight back and I hope they win. Right?

But they‘ve got to do the spending cuts, and the Republicans are coming, and unfortunately we‘re on Republican ground because we‘re talking about that debt commission which was so conservative, which the President has lauded over and over, for reasons that I cannot
comprehend. But Medicare affects us all. Right? Social Security
affects us all.

So, that‘s easy to protect because it‘s got a large constituency, as you said. Medicaid only helps the poor, the disabled, et cetera.

Well, you know, those guys are going to be easier to hit politically.
Aren‘t they?

KLEIN: They are easier to hit. I don‘t think anybody—I don‘t think
Democrats particularly want to hit them.

And one thing that will help Medicaid, one factor in this that isn‘t well
understood, the Affordable Care Act, which Democrats really do care
about protecting and which this administration really cares about
protecting—they really do see it as their entire legacy—the Affordable
Care Act expands Medicaid tremendously. About half of the 32 million
people who are going to be covered are going to be covered through
Medicaid.

So a sharp cut in Medicaid is essentially a direct attack on the Affordable Care Act. And a lot of Democrats are going to find that one to be a nonstarter, too. They‘ve been very united in repelling Republican attempts to repeal the bill, and they‘re not going to be much more impressed with Republican attempts to cut out the heart of the bill‘s coverage provisions —

UYGUR: Well, look—you know, Ezra—

KLEIN: — and then take 44 million people beyond that out of health care coverage.

UYGUR: Ezra, I hope to God you‘re right. But look, the president, when he made his speech a couple of weeks ago, and talked about how we‘re going to take three times as much from spending cults as we are from tax increases, well, you‘ve got to cut somewhere. And so that‘s what I‘m scared about.

But now, look, if they don‘t do this, they do something called a CAP Act.

Real quickly, can you explain to people what that is and why that might be even worse?

KLEIN: Are you talking the McCaskill//Corker CAP Act?

UYGUR: Yes.

KLEIN: So, the McCaskill/Corker CAP Act, what it does is it holds
spending down to 20.6 percent of GDP. And currently, spending is
around 23, 24 percent of GDP. And because we‘re going to have a big
retirement boom in the coming years—the baby boomers are leaving
work—we‘re going to have somewhat more spending, because they are
going to need Medicare, they‘re going to need Social Security. We‘ll have fewer working-age adults.

Essentially, what the CAP Act does is it institutes something like—it
forces something like the Ryan plan through the back door by saying that there is only one way to handle our problems. And that is sharply, sharply, sharply cutting spending and the federal programs.

You only allow one way to get out of this, which is a much smaller,
much more restrained, much less efficient government. And you do it at the exact moment that you have a really large number of seniors retiring and a very significant unemployment problem, such that you‘re going to have a state that is completely incapable of dealing with the very problems that are facing it.

UYGUR: Right.

KLEIN: For Democrats to be on this act is a shocking thing. And I have just been baffled by the fact that McCaskill and Manchin and Lieberman and a bunch of others are there. Any Democrat who believes that Medicare and Social Security and the military should exist really can‘t in good conscience support the CAP Act, because the numbers for those programs and that act simply don‘t add up.

UYGUR: Ezra, I couldn‘t agree more with you, but I‘m not—except for the part where you are shocked that Lieberman and Manchin are on board.

Well, of course they are. I mean, Lieberman, Democrat? Manchin?

OK. Look, some of the top economists in the world, 75 of them, got together and said what the CAP Act is—here, I‘ll just read it to you real quick. It says, “Such caps would require cutting or eliminating programs that are vital to the middle class like Social Security, Medicare and Medicaid. To put it bluntly, these plans would amount to nothing less than a Medicare kill switch.”

So this looks like a backdoor way of cutting all these programs without
saying you are cutting it.

So, all right, the last thing on this. I know some Democrats have signed on. That makes it even scarier.

Do they realize this at the end and go, wait a minute, we‘re not going to do this, or do they actually go in favor of this, what appears to be a terrible plan?

KLEIN: I think so. And I think the Obama administration really has their hair on fire about this.

They are getting really serious pushback on the Hill from the Obama
administration. And also, I mean, center-left groups, groups that tend to be thought of as centrists, like Third Way, are coming out and saying this is going to be like another Smoot-Hawley, which is the tariff act that was considered to be a contributor of the Great Depression. So there‘s going to be very, very broad agreement in the party against this act.

UYGUR: All right. Ezra Klein, thank you so much. A great discussion
tonight.

KLEIN: Thank you.

UYGUR: All right.

About William Brighenti

William Brighenti is a Certified Public Accountant, Certified QuickBooks ProAdvisor, and Certified Business Valuation Analyst. Bill began his career in public accounting in 1979. Since then he has worked at various public accounting firms throughout Connecticut. Bill received a Master of Science in Professional Accounting degree from the University of Hartford, after attending the University of Connecticut and Central Connecticut State University for his Bachelor of Arts and Master of Arts degrees. He subsequently attended Purdue University for doctoral studies in Accounting and Quantitative Methods in Business. Bill has instructed graduate and undergraduate courses in Accounting, Auditing, and other subjects at the University of Hartford, Central Connecticut State University, Hartford State Technical College, and Purdue University. He also taught GMAT and CPA Exam Review Classes at the Stanley H. Kaplan Educational Center and at Person-Wolinsky, and is certified to teach trade-related subjects at Connecticut Vocational Technical Schools. His articles on tax and accounting have been published in several professional journals throughout the country as well as on several accounting websites. William was born and raised in New Britain, Connecticut, and served on the City's Board of Finance and Taxation as well as its City Plan Commission. In addition to the blog, Accounting and Taxes Simplified, Bill writes a blog, "The Barefoot Accountant", for the Accounting Web, a Sift Media publication.
This entry was posted in Accountants CPA Hartford, Articles and tagged , , , , . Bookmark the permalink.

Leave a Reply

Your email address will not be published. Required fields are marked *

You may use these HTML tags and attributes: <a href="" title=""> <abbr title=""> <acronym title=""> <b> <blockquote cite=""> <cite> <code> <del datetime=""> <em> <i> <q cite=""> <strike> <strong>