Save our seniors: saving medicare

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CENK UYGUR, HOST: Good evening, everybody. I‘m Cenk Uygur.

Today, the Democrats have taken the fight to the Republicans. Hey, will you look at that? That‘s awesome. They‘re battling them on the GOP plan to destroy Medicare.

President Obama blasted Paul Ryan‘s budget this weekend.


BARACK OBAMA, PRESIDENT OF THE UNITED STATES: It‘s a vision that says in order to reduce the deficit, we have to end Medicare as we know it and make cuts to Medicaid that would leave millions of seniors, poor children, and Americans with disabilities without the care they need.


UYGUR: The president will be taking that exact message around the country this week in a hope to educate voters. Today he‘s giving local television interviews to stations in Denver; Raleigh, North Carolina; Dallas and Indianapolis. Tomorrow, he takes his message to a Republican state he won in 2008 with a town hall in Virginia. And on Wednesday, he‘ll hold an interactive town hall at Facebook headquarters in Palo Alto, California. And on Thursday, he heads to Reno, Nevada. He‘s going everywhere. He‘s not playing anymore.

Democratic lawmakers are also pushing the message that Ryan plan is a Medicare killer. All right. Apparently they are, but we don‘t have that video. Trust me that they definitely are. All right. Now, it‘s about time that Obama and the fellow Democrats counterattack.

Of course, the GOP is complaining that the Democrats aren‘t being nice to them. But wait a minute, those were the same guys who had this quote on the opening page of Ryan‘s budget plan: “Where the president has failed, House Republicans will lead.” What, you can accuse him of failing, but if he fights back, you cry over it? Well, there‘s another reason why the counterattack is so important.

Now, look, take a look at how people perceive Ryan‘s budget before and after they are told what‘s in it. Pollster Greenberg Quinlan Rosner found 48 percent supported Ryan‘s plan when just told that it trimmed spending and 33 percent opposed it. Now, those are really good numbers for the Republicans.

But when told what Ryan‘s plan really does, which is to cut taxes for corporations and the wealthy, and repeal part of health care reform, and make major cuts to Medicare, support plummeted. Then, only 36 percent backed the plan and 56 percent opposed it.

Now, look what happens when people find out what the plan actually does. That‘s a 23-point swing against the Ryan budget. In the end, when they knew all of the details of the plan, 66 percent—that‘s two-thirds of the country—have “serious doubts” about the plan.

Now, that‘s why President Obama and the Democrats have to hit the road and tell the country what this fight is actually about. This isn‘t just about politics, this is the only way they can actually save Medicare and Medicaid.

Joining me now, NBC News political analyst and form Pennsylvania governor Ed Rendell. Also with me, reporter for “The Washington Post” and MSNBC contributor, Ezra Klein.

Great to have you guys here.


UYGUR: All right. Great.

Well, my guess is, Governor Rendell, you‘re in favor of taking the fight to them.

RENDELL: Absolutely. It‘s long overdue.

I mean, you know, the Republicans always raise the specter of class warfare. This isn‘t class warfare, this is about sharing the pain, it‘s about fundamental fairness. And there is no fairness in the Ryan budget, none whatsoever. And there‘s no fairness in our current tax structure.

UYGUR: Ezra, let‘s talk about Medicare and what the Ryan plan would do.

It looks like the CBO, which is nonpartisan, says by 2030, that people would have to put in 68 percent of the costs of their Medicare, as opposed to if we left it alone, it would be 25 percent. So that‘s gigantic difference. I mean, can people even afford to put 68 percent of their health care costs in these things?

EZRA KLEIN, MSNBC CONTRIBUTOR: It‘s actually a bit worse than that. What CBO found is not just that you‘d have to pay about 70 percent of your Medicare under the Ryan plan, while under normal Medicaid, you pay between 25 to 30 percent, it‘s that the insurance offered by the Ryan plan, because it moves over to the private market where there are more middlemen, higher administrative costs, the insurance would actually be pricier. So you would be paying more for less insurance under the Ryan plan than you would under traditional Medicare.

And that‘s very important. And what the Ryan plan does is it shifts costs over to seniors. It doesn‘t control costs in the health care sector, which is ultimately the only thing that would be a sustainable solution to our deficit problem.

UYGUR: You know, one more quick follow-up on that, Ezra. I‘m also reading that insurance companies have no interest in it. They don‘t want to insure older people who are more likely to get sick. So, is there some chance that even if you got the voucher that Ryan is talking about, as little as it is, that they might not insure you anyway?

KLEIN: You can always pay an insurance company enough to insure somebody. In Medicare, we do it now. It‘s a program called Medicare Advantage, and private HMOs get to participate.

The idea of Medicare Advantage is it would be cheaper, and so it would cost the same as Medicare but give people vastly more benefits. That failed.

Medicare Advantage costs about 120 percent, as much as traditional Medicare. And one of the ways that we paid for health care reform and one of the health care reform savings that Ryan keeps in his budget is that it ratchets those savings back.

So the big experiment we did, trying to create a private market in Medicare, and seeing if that was cheaper, it failed. It turned out to be much more expensive.

UYGUR: Right. And I thought the free market would solve everything.

It turns out it doesn‘t. Wow. Shocking.

All right. Now, Governor Rendell, let‘s talk about the politics of this a little bit, because the Republicans are running for the hills here, at least some of the 2012 candidates. Let me show you a video of Tim Pawlenty when he‘s asked about this and I‘ll have you react.


TIM PAWLENTY ®, FMR. MINNESOTA GOVERNOR: I like Paul Ryan‘s plan directionally. I don‘t think it‘s fully filled out in terms of the fact that we still have to address Social Security. And when we issue our plan later in this process, it will have some differences.

UNIDENTIFIED MALE: He‘s put the Medicare cuts in his plan that he keeps from Obamacare?

Advertise | AdChoicesAdvertise | AdChoicesAdvertise | AdChoices.PAWLENTY: Anybody else have a question besides this guy?


UYGUR: Apparently they don‘t like Think Progress‘ questions, but it was a very important and fair question.

So, are the Republican candidates in some trouble here, stuck between Ryan‘s plan and what the American people actually want?

RENDELL: Yes, I think they‘re in big trouble. And I think a lot of congressmen who voted for the Ryan plan last Friday have got a lot of explaining to do in 2012.

And I think swing districts in Bucks County, in Delaware County, in suburban Philadelphia, and even Montgomery County, those congressmen are going to have a lot of explaining to do to senior citizens. I think they may have voted themselves out of office.

And, you know, it made no sense. It made no sense.

Now, you‘ll start seeing retreats, and “I didn‘t know the details,” and, “No, I‘m for the concept, but not really for all the details of the plan.” It‘s baloney.

The plan doesn‘t work because it changes what is a fundamental entitlement that makes this country different than all other countries in the globe, number one. And number two, it fails because it‘s unfair. It gives significant tax benefits to the rich and to wealthy corporations.

Do you know, Cenk, that right now, right now, 58 percent of corporations that are foreign-owned pay no income taxes in the U.S. when they do business here? And 34 percent of U.S. corporations pay no income tax doing business, of course, in the United States.

That‘s shocking. Shocking.

UYGUR: Yes. They always talk about shared sacrifice, but when it comes to shared sacrifice for the rich or for the corporations, all of a sudden, they‘re not interested in that. It‘s really strange.

But, Ezra, on the politics of Medicare, the Republicans might be even in more trouble than they suspect because in 2010, their base was actually senior citizens, right? I mean, they came out to really vote for them. If they jeopardize that, how much trouble are they in?

KLEIN: Right. So the Republican Party is more reliant on the senior vote than they have been in many, many decades.

It‘s actually interesting, I think. 2008 was the first election in decades where the average Republican was older than the average Democrat. And that‘s simply accelerating.

The Republicans got 58 percent of the senior vote in 2010. In 2008, seniors were the only age group that went for John McCain. So that has created a little bit of asymmetry of interest here.

The Republicans now have the senior vote, but they don‘t like entitlements. Previously, Democrats had the senior vote and they did like entitlements. That made life a little bit simpler for them.

So Republicans are going to have a lot of explaining to do to seniors, who they attracted in 2010 by attacking the Medicare cuts in the health care bill. They even have what they call the Seniors Health Care Bill of Rights protecting them from these Medicare cuts, but now they have brought all of those Medicare cuts into the Ryan plan and stacked on top of them more Medicare cuts and privatization, and that‘s going to create an interesting set of conversations around the country I think in 2012.

UYGUR: And finally, Governor Rendell, you know, as Ezra explained a little earlier, Medicare Advantage didn‘t work, it‘s inefficient. You want to get rid of that, get some savings, that makes perfect sense. But, otherwise, cutting Medicare, or agreeing to cut Medicare, as the Republicans want, would seem to let the Republicans off the hook here, right?

The Democrats aren‘t going to do that, are they?

RENDELL: No, but I think we need to reform some aspects of Medicare. One thing I‘d like the president to pursue, and he‘s starting to give signals that he will, is to use the federal government‘s leverage buying power, tremendous leverage buying power to reduce the cost of pharmaceuticals for Medicare and for every aspect of our health care system.

UYGUR: I would love that. Oh, I would love that. But I thought that that was—

RENDELL: We can ratchet down costs in Medicare by just doing that one thing.

UYGUR: No, no, absolutely. And I‘m 100 percent on board for that. But I thought that part of the deal that they struck in health care reform was that they could not negotiate with those drug companies.

RENDELL: Go ahead, Ezra. You want to take a shot at that?

KLEIN: If I could jump in, in the budget plan the president announced last week, there‘s actually a couple of things horning in on that deal. The big one, I think, is he announced in the plan that he would like to reduce the amount of time that biologic drugs can be exclusive, from 12 years to 7. This was part of one of these pharmaceutical deals, but it would save a ton of money if you get generics and this expensive new costs of drugs on to the market more quickly. And it‘s something that until now, we‘ve not seen any willingness from the White House to do. But in the face of more deficit concerns, they have become much more interested in it all of a sudden.

UYGUR: Right.

RENDELL: And Cenk, I think it‘s important that we realize, we Democrats realize, that, yes, we‘ve got to wring some savings out of Medicare and Medicaid without destroying the fundamental entitlement of those programs, and we can do it.

UYGUR: No, and I agree with you. Look, when it comes to Medicare Advantage, as Ezra pointed out, when it comes to negotiating for lower drug prices that you pointed out, Governor, absolutely. That makes all the sense in the world. I just don‘t want fundamental cuts to Medicare.

So, great to have this conversation with both of you. Thank you so much for joining us.

RENDELL: Thanks, Cenk.

KLEIN: Thank you.

UYGUR: All right.

That was of course Governor Rendell and Ezra Klein from “The Washington Post.”

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.
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